TLJ News from August 1-5, 2011

FCC Releases NOI for 8th Section 706 Report

8/5. The Federal Communications Commission (FCC) adopted and released a notice of inquiry [19 pages in PDF] titled "Eighth Broadband Progress Notice and Inquiry".

The FCC has not previously issued any "Broadband Progress" NOIs. However, it has released seven Section 706 NOIs. It released its seventh Section 706 report on May 20, 2011. See, story titled "FCC Releases 7th Section 706 Report" in TLJ Daily E-Mail Alert No. 2,246, May 27, 2011.

Section 706 of the Telecommunications Act of 1996, which is codified at 47 U.S.C. § 157 notes, provides, in part, that the FCC shall regularly "initiate a notice of inquiry concerning the availability of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) ... In the inquiry, the Commission shall determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion. If the Commission's determination is negative, it shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market." (Parentheses in original.)

The 1996 Act requires the FCC to conduct an inquiry, then make a factual conclusion regarding availability, and if its conclusion is in the negative, then take action. During the tenure of Chairman Julius Genachowski, the FCC appears to have reversed the ordering. The starting point is policy objectives. Section 706 findings are then adjusted to support those objectives.

In particular, the FCC now seeks to impose and maintain a network neutrality, or open internet, regulatory regime. The FCC adopted rules for the regulation of broadband internet access service (BIAS) providers late last year. There is no statute that expressly directs of authorizes the FCC to write BIAS rules. The FCC's 6th Section 706 report, released in July of 2010, concluded for the first time that advanced telecommunications capability is not being deployed in a reasonable and timely fashion. See, story titled "FCC Releases 6th Section 706 Report" in TLJ Daily E-Mail Alert No. 2,114, July 29, 2010. The FCC's December 2010 BIAS order seized upon the finding of that 6th report as justification.

The just released NOI reiterates this. It states that "In light of our determination that broadband deployment in the United States is not reasonable and timely, as required by section 706, the Commission has taken numerous actions to accelerate broadband deployment. For example, the Commission adopted the Open Internet Order" in December of 2010.

The first five reports concluded that "advanced telecommunications capability" is being deployed to all Americans in a reasonable and timely fashion. The next two concluded in the negative. They also substituted the clause "broadband deployment" for "advanced telecommunications capability".

The 6th and 7th reports also proceeded as if the statute addresses "subscription", whereas the statute actually addresses "availability".

Also, Genachowski wrote in his statement that "almost one third of Americans -- 100 million of us -- haven't adopted broadband. Some find this acceptable; I do not."

The just released NOI states that the FCC has used Form 477 to determine deployment. This is subscription data, not availability data. The NOI asks if it should continue to do this.

This NOI also asks for comments on an appropriate benchmark for advanced telecommunications capability, and whether the FCC should set technology specific speed thresholds.

The latest NOI uses the phrase "broadband progress" in place of "broadband deployment" and "advanced telecommunications capability". It also refers to previous Section 706 reports as "broadband progress" reports.

The just released NOI also asserts that these reports are "annual". The statute uses the word "regularly", not "annual". Also, the FCC has issued 7 reports in the 14 years since enactment of Section 706, without any fixed schedule.

This NOI is FCC 11-124 in GN Docket No. 11-121. The deadline to submit initial comments is September 6, 2011. The deadline to submit reply comments is October 4, 2011.

Representatives Reintroduce Bill to Allow Web and Broadcasting of Most Federal Trial and Appellate Proceedings

8/5. Rep. Steve Chabot (R-OH), Rep. Dan Lungren (R-CA), Rep. Zoe Lofgren (D-CA), and Rep. Ted Deutch (D-FL) introduced HR 2802 [LOC | WW], the "Sunshine in the Courtroom Act of 2011".

This bill provides, subject to certain enumerated exceptions, that "the presiding judge of an appellate court of the United States" and "the presiding judge of a district court of the United States may, at the discretion of that judge, permit the photographing, electronic recording, broadcasting, or televising to the public of any court proceeding over which that judge presides".

The bill provides exceptions to prevent violation of due process rights.

It also provides the exception for trial courts that "upon the request of any witness (other than a party) in a trial proceeding, the court shall order the face and voice of the witness to be disguised or otherwise obscured in such manner as to render the witness unrecognizable to the broadcast audience of the trial proceeding". (Parentheses in original.)

It also provides that "The presiding judge shall not permit the photographing, electronic recording, broadcasting, or televising of any juror in a trial proceeding, or of the jury selection process."

It was referred to the House Judiciary Committee (HJC).

The companion bill in the Senate is S 410 [LOC | WW], also titled the "Sunshine in the Courtroom Act". Sen. Charles Grassley (R-IA) and others introduced that bill on February 17, 2011. The Senate Judiciary Committee (SJC) amended and approved it on April 7, 2011. See, story titled "Senate Judiciary Committee Continues to Consider Cameras and Mics in Courtrooms" in TLJ Daily E-Mail Alert No. 2,207, March 23, 2011.

HR 2802 is also a reintroduction of HR 3054 [LOC | WW], the "Sunshine in the Courtroom Act of 2009", from the 111th Congress. That bill was introduced by former Rep. William Delahunt (D-MA) and Rep. Lungren. Its other sponsors were Rep. Lofgren, Rep. Deutch, Rep. Jared Polis (D-CO), and Rep. Steve Cohen (D-TN).

The companion bill in the Senate in the 111th Congress was S 657 [LOC | WW], also titled the "Sunshine in the Courtroom Act of 2009". Sen. Grassley was the sponsor. The SJC, but not the full Senate, approved that bill.

There were similar bills and in the 110th Congress. See, S 352 and HR 2128. Also, there were similar bills in the 109th Congress. See, S 829 and HR 2422.

Rule 53, Federal Rules of Criminal Procedure, provides that "Except as otherwise provided by a statute or these rules, the court must not permit the taking of photographs in the courtroom during judicial proceedings or the broadcasting of judicial proceedings from the courtroom."

The Judicial Conference and the Administrative Office of the U.S. Courts have also been hostile to cameras in courtrooms, and the legislative proposals of Sen. Grassley and others.

See also, story titled "1st Circuit Rejects Webcasting of Civil Motions Hearings in District Court" in TLJ Daily E-Mail Alert No. 1,930, April 21, 2009.

More News

David Kappos8/5. David Kappos (at right), head of the U.S. Patent and Trademark Office (USPTO) announced that the USPTO's Patents Ombudsman Pilot Program will be made permanent. Kappos wrote in a short piece that stakeholders "use it for a wide-range of reasons, from status inquiries to complicated petitions issues. Sometimes, applicants use the pilot program when they just don’t know who to contact. All good, and all exactly why the Ombudsman program was created -- to provide a channel for resolving issues that may not fit into existing channels."

8/5. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) published a notice in the Federal Register that announces, describes and sets the comment deadline for, a Notice of Inquiry regarding its Export Control Reform Initiative. See, Federal Register, Vol. 76, No. 151, Friday, August 5, 2011, at Pages 47527-47529. The deadline to submit comments is February 1, 2012.

8/5. Rep. Karen Bass (D-CA), Rep. Carolyn Maloney (D-NY), Rep. Steve Chabot (R-OH), Rep. Frank Wolf (R-VA), and Rep. Jim Moran (D-VA) introduced HR 2801 [LOC | WW], a bill to establish a task force to study and make recommendations regarding internet facilitated human trafficking.

8/5. The Electronic Privacy Information Center (EPIC) and other groups filed a comment [19 page in PDF] with the Department of Homeland Security (DHS) regarding its proposal to introduce a new system of records containing names, dates of birth, places of birth, biometrics and photographic data, passport information, driver's license information, and other available identifying particulars, and to exempt this system of records from various Privacy Act requirements. The EPIC argues that the "DHS should suspend the proposal pending a full review of the privacy, security, and legal implications of the program, including compliance with the federal Privacy Act." Also, if the DHS proceeds with this watch list system (WLS) program, it must, among other things, "adhere to Congress's intent to maintain transparent and secure government recordkeeping systems", "provide individuals judicially enforceable rights of notice, access, and correction", and "respect individuals’ rights to control their information in possession of federal agencies".

8/5. The Government Accountability Office (GAO) released a report [31 pages in PDF] titled "Green Information Technology: Agencies Have Taken Steps to Implement Requirements, but Additional Guidance on Measuring Performance Needed".

8/5. AT&T announced in a release regarding voicemail security that its "customers have the option and are strongly encouraged to password-protect access to their wireless voicemail. Beginning August 5, voicemail accounts for new customers, those who change phone numbers, upgrade to Visual Voice Mail, or create a new voicemail box will default to a password required setting to check voicemail from their wireless or any other device." Also, "AT&T strongly recommends using a password". AT&T's Bob Quinn explained in another piece that AT&T has allowed "wireless subscribers to get access to their cell phone voicemail boxes without having to use their password when they were calling the mailbox from their mobile device". He explained that AT&T is now responding to "the wide availability of sophisticated telephone number spoofing technology that allows people to ``fake´´ the telephone number they are calling from". Quinn added that "Some privacy advocates have called on companies like AT&T to go further and actually prohibit our customers from accessing voicemail unless they use a password.  We are not going to go that far."

Sen. Franken Writes FCC Regarding Bloomberg's Complaint Against Comcast NBCU

8/4. Sen. Al Franken (D-MN) sent a letter to the Department of Justice's (DOJ) Antitrust Division and the Federal Communications Commission (FCC) regarding Bloomberg's complaint to the FCC about Comcast's compliance with merger conditions imposed by the FCC when it approved the Comcast NBCU transaction in January.

Sen. Al FrankenSen. Franken (at right) wrote that "It is now six months since this deal was approved, and a complaint has already been filed by Bloomberg, L.P. regarding Comcast's refusal to place Bloomberg's financial news channel in the same ``neighborhood´´ as other cable news networks, including Comcast's CNBC and MSNBC."

He wrote that "At the time the Commission adopted this condition, it recognized that Bloomberg was a close competitor of CNBC and that Comcast would have an incentive to disadvantage this network to gain advertising revenue and subscribers."

The FCC issued its Memorandum Opinion & Order (MOO) [279 pages in PDF] approving the merger, subject to conditions, on January 20, 2011. It is FCC 11-4 in MB Docket No. 10-56.

That MOO, in Appendix A, at page 121, sets forth the following condition: "If Comcast now or in the future carries news and/or business news channels in a neighborhood, defined as placing a significant number or percentage of news and/or business news channels substantially adjacent to one another in a system's channel lineup, Comcast must carry all independent news and business news channels in that neighborhood."

Bloomberg filed a complaint with the FCC on June 13, 2011, in which it wrote that "Despite a clear requirement in the FCC Order that Comcast include independent news channels, such as Bloomberg Television ("BTV"), in Comcast's existing news neighborhoods, Comcast refuses to implement the Commission's express direction."

Bloomberg continued that it "has asked Comcast to place BTV in Comcast's existing news neighborhoods on all Comcast systems in the 35 most populous DMAs. Comcast, however, has refused, claiming that it does not currently have any news neighborhoods and, in any event, that the Commission's news neighborhooding condition applies only to neighborhoods that will be created in the future. Neither of these assertions has any merit."

Comcast filed an answer [206 pages in PDF] with the FCC on July 27, 2011. It wrote that Bloomberg is attempting to "extract preferential channel placement on Comcast's cable systems through regulatory gamesmanship", that it has not violated the MOO, and that the complaint should be denied.

On August 3 the FCC granted Bloomberg's request that the deadline for its reply be extended to August 30. The FCC's proceeding on this complaint is MM Docket No. 11-104.

Sen. Franken, who opposed the merger, wrote in his letter that "I fear that Comcast's alleged attempt to maneuver around the neighborhooding condition in the merger order is only the beginning of a series of lengthy and expensive battles over conditions, and I urge the Commission to act promptly if Comcast is in violation of this or any other conditions in its merger order."

He added that "I am concerned that small online video distributors and independent channels may not have the resources to file a relevant complaint, and there may be no known constituencies or public interest groups with sufficient resources to police Comcast's efforts to wiggle around the Commission and DOl's carefully crafted conditions".

He concluded that "We have seen a trend over the last two decades of FCC and DOJ acquiescence to large media/telecommunications mergers. Many of these mergers have been sold to the public based on the strength and number of conditions that are imposed on the transaction. But conditions mean absolutely nothing if the corporation cannot be trusted to implement them in a full and transparent manner and if there is minimal enforcement of the corporation's efforts to skirt the requirements of the deal."

Spam King Wallace Indicted

8/4. The U.S. District Court (NDCal) unsealed an indictment that charges Sanford Wallace with violation of the CAN SPAM Act and the Computer Fraud and Abuse Act (CFAA) in connection with his spamming Facebook users. The indictment, which was returned on July 6, also identifies Wallace as "The Spam King".

A grand jury of the District Court returned an indictment that charges Wallace with numerous counts of fraud and related action in connection with electronic mail in violation of the CAN SPAM Act (18 U.S.C. § 1037), intentional damage to a protected computer in violation of in violation of the CFAA (18 U.S.C. §§ 1030(a)(5)(A) and (c)(4)(B)(i)), and one count of criminal contempt (18 U.S.C. § 401(c)).

In a previous civil action brought by Facebook against Wallace, the judgment included a provision barring Wallace from accessing Facebook's computer network. The criminal contempt charge stems from violation of this.

The U.S. Attorneys Office for the Northern District of California stated in a release that "from approximately November 2008 through March 2009, Wallace executed a scheme to send spam messages to Facebook users.  Those messages compromised approximately 500,000 legitimate Facebook accounts, and resulted in more than 27 million spam messages being sent through Facebook’s servers."

This case is U.S. v. Sanford Wallace, U.S. District Court for the Northern District of California, San Jose Division, D.C. No. CR 11-00456 EJD.

Biden to Visit PRC and Japan

8/4. The White House news office stated in a release that Vice President Joe Biden will travel to the People's Republic of China (PRC), Mongolia and Japan.

Joe BidenIt states that in the PRC Biden (at left) "will meet with Vice President Xi and other Chinese leaders, including President Hu and Premier Wen Jiabao, to consult on a broad range of bilateral, regional, and global issues."

This release adds that VP Biden will visit the southwestern city of Chengdu. It is a major center of information and communications technology manufacturing, services and research. Many U.S. companies have operations there.

See, Microsoft's web page titled "Chengdu Cloud Computing Center", IBM's web page titled "IBM to Build Chengdu into a Smart City", Intel's web page regarding its assembly testing facility in Chengdu, and Cisco's release titled "Cisco Collaborates with Chengdu to Support the Development of Local Information Society and Sustainability Initiatives".

The release states that "In Japan, the Vice President will express steadfast U.S. support for its close ally in the wake of the recent earthquake, tsunami, and nuclear emergency. The Vice President will thank U.S. civilian and military personnel for their assistance in responding to the disaster, as well as highlight Japan's resilience during the recovery and rebuilding process."

9th Circuit Rules on Availability of Injunctive Relief for Copyright Infringement

8/4. The U.S. Court of Appeals (9thCir) issued its opinion [11 pages in PDF] in Perfect 10 v. Google, a copyright infringement case in which the Court of Appeals affirmed the District Court's denial of the copyright holder's motion for preliminary injunction.

Perfect 10 has been in litigation against Google for years. This case has been up to the 9th Circuit before. See, December 3, 2007, amended opinion. Also, the District Court made numerous holding which are the subject of this interlocutory appeal. However, the Court of Appeals opinion contains one very important component. The Court of Appeals held that a request for injunctive relief, whether preliminary or permanent, in a copyright infringement case must be evaluated on a case by case basis in accord with traditional equitable principles, and without any presumption of irreparable harm.

The Court of Appeals relied heavily on the Supreme Court's 2006 holding in eBay v. MercExchange.

Proceeding Below. Perfect 10 operates a pay for access web site that displays pictures a young women wearing little or no clothing that appeal to the prurient interest of men. It holds copyrights in these photographs. Nevertheless, people copy these pictures and publish them online, without authorization, in free access web sites, which are then indexed and cached by Google's search engine, which involves copying by Google.

Google removes infringing works pursuant to the DMCA's notice and take down procedure. However, it also forwards the takedown notices to the EFF's website, This provides the URL of web pages with infringing photos.

Perfect 10 filed a complaint in the U.S. District Court (CDCal) against Google alleging copyright infringement. Perfect 10 also sought a preliminary injunction. The District Court denied the motion for a preliminary injunction. Perfect 10 brought the present interlocutory appeal.

Legal Background. 17 U.S.C. § 502(a) provides that "Any court having jurisdiction of a civil action arising under this title may, subject to the provisions of section 1498 of title 28, grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright."

Section 502(b) addresses service and enforceability of an injunction granted pursuant to Section 502(a). However, Section 502 does not address when the court should grant preliminary or permanent injunctive relief.

The U.S. Court of Appeals (3rdCir) held in its landmark 1983 opinion in Apple Computer v. Franklin Computer, reported at 714 F.2d 1240, that "the prevailing view" is "that a showing of a prima facie case of copyright infringement or reasonable likelihood of success on the merits raises a presumption of irreparable harm". The 3rd Circuit added that "A copyright plaintiff who makes out a prima facie case of infringement is entitled to a preliminary injunction without a detailed showing of irreparable harm".

It also wrote that "the public interest underlying the copyright law requires a presumption of irreparable harm, as long as there is, as here, adequate evidence of the expenditure of significant time, effort and money directed to the production of the copyrighted material. Otherwise, the rationale for protecting copyright, that of encouraging creativity, would be undermined."

Other circuits, including the 9th Circuit, have reached a similar conclusion. The Supreme Court has not ruled on this issue.

However, the Supreme ruled on the availability of injunctive relief in patent cases in 2006 in eBay v. MercExchange, 547 U.S. 388. See, opinion and story titled "Supreme Court Rules on Availability of Injunctive Relief in Patent Cases" in TLJ Daily E-Mail Alert No. 1,371, May 16, 2006.

The Supreme Court held that the traditional four factor framework that guides a court's decision whether to grant a permanent injunction applies in patent cases. An injunction should not follow from proof of infringement. The Court wrote "a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction."

The Supreme Court also wrote in dicta in eBay that "Like the Patent Act, the Copyright Act provides that courts ``may´´ grant injunctive relief ``on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.´´ 17 U. S. C. §502(a). And as in our decision today, this Court has consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed."

In 2010, the U.S. Court of Appeals (2ndCir) issued its opinion in Salinger v. Colting, which is also reported at 607 F.3d 68. The Court wrote that eBay "dealt only with the presumption of irreparable harm in the patent law context, and thus is not controlling in the absence of Second Circuit precedent applying it in the copyright context".

It noted that the 2nd Circuit "has nearly always issued injunctions in copyright cases as a matter of course upon a finding of likelihood of success on the merits". But, "We hold today that eBay applies with equal force (a) to preliminary injunctions (b) that are issued for alleged copyright infringement. First, nothing in the text or the logic of eBay suggests that its rule is limited to patent cases. On the contrary, eBay strongly indicates that the traditional principles of equity it employed are the presumptive standard for injunctions in any context." (Footnote omitted.)

Court of Appeals Opinion. The Court of Appeals affirmed the judgment of the District Court.

It wrote that for three decades the 9th Circuit has repeated and relied on the rule stated in Apple Computer. "These cases, however, all predate" eBay v. MercExchange.

The Court of Appeals wrote that "the language of § 502(a) is permissive and evokes traditional equitable principles".

Moreover, quoting from eBay, it added that "Nothing in the statute indicates congressional intent to authorize a “major departure” from “the traditional four-factor framework that governs the award of injunctive relief,” ..."

"We therefore conclude that the propriety of injunctive relief in cases arising under the Copyright Act must be evaluated on a case-by-case basis in accord with traditional equitable principles and without the aid of presumptions or a “thumb on the scale” in favor of issuing such relief."

The Court concluded that "Perfect 10 has not shown a sufficient causal connection between irreparable harm to Perfect 10's business and Google’s operation of its search engine. Because Perfect 10 has failed to satisfy this necessary requirement for obtaining preliminary injunctive relief, the district court’s ruling was not an abuse of discretion."

Hence, two circuits, the 2nd and 9th, have held that the traditional equitable principals apply in granting injunctive relief in copyright cases, and that there is no presumption of irreparable harm.

These opinions (eBay, Salinger and Perfect 10) are all a matter of statutory interpretation. The statute is silent on application of the four factor test for granting injunctive relief. The Congress could amendment Section 502 of the Copyright Act, or the Patent Act, to provide that injunctive relief is available as a remedy for copyright infringement without satisfying the four factor test. This would have the effect of undoing these holding.

Although, it is very hard to enact a bill, particularly when there is organized opposition. Google and other companies would lobby intensively against passage of such a bill.

This case is Perfect 10, Inc. v. Google, Inc., U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 10-56316, an appeal from the U.S. District Court for the Central District of California, D.C. No. 2:04-cv-09484-AHM-SH, Judge Howard Matz presiding. Judge Sandra Ikuta wrote the opinion of the Court of Appeals, in which Judges Alex Kozinski and Michael Hawkins joined.

Rep. Chabot Writes DOJ and FCC Regarding AT&T and T-Mobile USA

8/4. Rep. Steve Chabot (R-OH) sent a letter to the Department of Justice (DOJ) and the Federal Communications Commission (FCC) regarding AT&T's proposed acquisition of T-Mobile USA.

He wrote that "When assessing the effects this merger will have on wireless services and consumers, I urge you to carefully consider the capabilities for the regional and rural wireless carriers to continue providing consumers with competitive alternatives to the national providers' service offerings."

Rep. Steve ChabotRep. Chabot (at right) continued that "it is especially important to examine the impact of this proposed merger on regional and rural wireless service providers' opportunities to secure the vital inputs including spectrum, roaming and handsets, necessary for their operation."

But, he added, "I do not take a position on the merger".

Rep. Chabot represents a House district in the southwestern corner of Ohio. His district includes much of Cincinnati, and the territory served by Cincinnati Bell, a regional provider of voice, wireless and broadband services.

It states in its web site that "Cincinnati Bell Telephone Company LLC provides traditional, ILEC, local telecommunications products and services in the Cincinnati, Ohio metropolitan area, including portions of Ohio, Kentucky and Indiana and covering more than 2,400 square miles. Cincinnati Bell Extended Territories LLC provides CLEC services in parts of Ohio ... . Cincinnati Bell Any Distance Inc. provides long distance services in 48 states and is certified to provide CLEC services in Ohio, Kentucky, Indiana and Illinois."

Cincinnati Bell Wireless filed a petition to deny merger approval with the FCC on May 31, 2011. It wrote that "The merger of AT&T and T-Mobile will turn back the clock back thirty years, to a time of minimal competition, limited choices for consumers, higher retail prices, and slow innovation. With the elimination of T-Mobile as a viable national wireless carrier, this country will see the re-establishment of a wireless duopoly in AT&T and Verizon, which will hold great market power and will have no competitors able to provide competitive checks on their pricing or drive them to innovate and improve."

It also asserted that "The multiple acquisitions of smaller and regional carriers by national carriers in recent years has set us on this path and allowed the national wireless carriers to dominate the market through the use of (1) anti-competitive roaming agreements, (2) exclusive handset arrangements and (3) massive spectrum holdings. If granted, the merger of AT&T and T-Mobile, the second and fourth largest national carriers, will decimate competition, innovation, and efficiency, and the market will revert to the bygone days of high prices and reduced consumer choices."

Rep. Chabot is also a member of the House Judiciary Committee (HJC) and its Subcommittee on Intellectual Property, Competition, and the Internet. The HJC oversees the DOJ, and its antitrust activities, but not the FCC.

The FCC's proceeding for this merger review is WT Docket No. 11-65.

People and Appointments

8/4. President Obama announced his intent to appoint Steve VanRoekel to be Federal Chief Information Officer and Administrator, Office of Electronic Government, in the Office of Management and Budget (OMB). He will replace Vivek Kundra. See, White House news office release. He has worked briefly as Executive Director of Citizen and Organizational Engagement at the U.S. Agency for International Development (USAID). Before that, he worked for the Federal Communications Commission (FCC). He worked for Microsoft from 1994 through 2009.

8/4. The Business Software Alliance (BSA) announced that it has named Thomas Boué Director, Government Affairs, for Europe, Middle East and Africa region. See, BSA release.

More News

8/4. The Federal Communications Commission (FCC) filed its brief [92 pages in PDF] with the U.S. Court of Appeals (DCCir) in ICO Global Communications, et al. v. FCC and USA, App. Ct. No. 10-1322. This is a petition for review of the FCC's 2010 BAS order [42 pages in PDF], in which the FCC completed its reorganization of the 2 GHz band. The FCC adopted and released this order on September 29, 2010. It is FCC 10-179 in WT Docket No. 02-55. Oral argument is scheduled for October 14, 2011.

8/4.  The Federal Communications Commission (FCC) published a notice in the Federal Register that announces, describes, and sets comment deadlines for, its Second Further Notice of Proposed Rule Making (2ndFNPRM) and NPRM regarding extending the FCC's location surveillance mandate to outbound only interconnected VOIP services, and revising the definition of interconnected VOIP. The FCC adopted this item on July 12, 2011, and released the text on July 13. This NPRM is FCC 11-107 in PS Docket No. 07-114, GN Docket No. 11-117, and WC Docket No. 05-196. See, Federal Register, Vol. 76, No. 150, Thursday, August 4, 2011, at Pages 47114-47123. the deadline to submit initial comments is October 3, 2011. The deadline to submit reply comments is November 2, 2011.

8/4. The U.S. Court of Appeals (3rdCir) issued its opinion [31 pages in PDF] in Pernod Ricard v. Bacardi USA, a false advertising claim, involved bottled rum, brought under Section 43(a)(1)(B) of the Lanham Act, which is codified at 15 U.S.C. § 1125(a)(1)(B). The Court of Appeals affirmed the judgment of the District Court, which held that Barcardi's advertising is not deceptive. This case is Pernod Ricard, LLC v. Bacardi USA, Inc., U.S. Court of Appeals for the 3rd Circuit, App. Ct. No. 10-2354, an appeal from the U.S. District Court for the District of Delaware, D.C. No. 06-cv-505.

Google Says Patents Attack Android

8/3. Google's Chief Legal Officer David Drummond wrote a short piece in the Google web site titled "When Patents Attack Android". He argued that there is "a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents".

He offered this explanation. "They're doing this by banding together to acquire Novell’s old patents (the “CPTN” group including Microsoft and Apple) and Nortel's old patents (the ``Rockstar´´ group including Microsoft and Apple), to make sure Google didn’t get them; seeking $15 licensing fees for every Android device; attempting to make it more expensive for phone manufacturers to license Android (which we provide free of charge) than Windows Phone 7; and even suing Barnes & Noble, HTC, Motorola, and Samsung. Patents were meant to encourage innovation, but lately they are being used as a weapon to stop it."

He wrote that "A smartphone might involve as many as 250,000 (largely questionable) patent claims, and our competitors want to impose a ``tax´´ for these dubious patents that makes Android devices more expensive for consumers. They want to make it harder for manufacturers to sell Android devices. Instead of competing by building new features or devices, they are fighting through litigation."

This is "anti-competitive" and "likely to draw regulatory scrutiny", Drummond asserted.

He added that "We're encouraged that the Department of Justice forced the group I mentioned earlier to license the former Novell patents on fair terms, and that it’s looking into whether Microsoft and Apple acquired the Nortel patents for anti-competitive means. We're also looking at other ways to reduce the anti-competitive threats against Android by strengthening our own patent portfolio."

See also, stories titled "Update on Apple Microsoft RIM Sony Ericsson Acquisition of Nortel Patents" in TLJ Daily E-Mail Alert No. 2,260, July 16, 2011, and "AAI Urges DOJ to Investigate Acquisition of Nortel Patent Portfolio" in TLJ Daily E-Mail Alert No. 2,255, July 11, 2011.

New York Amends Its Unauthorized Recordings Statute

8/3. New York Governor Andrew Cuomo signed into law A7811B-2011, a bill that amends the New York penal law pertaining to unauthorized recordings.

Article 275 of the New York penal law pertains to "Offenses Related to Unauthorized Recording". Section 275.00 provides definitions. As amended by A7811, the definition of "recording" is as follows, with new language shown in red:

Article 275 criminalizes the manufacture, sale or advertisement of unauthorized recordings. It also criminalizes the unauthorized operation of a recording device in a motion picture or live theater.

Section 60.27 of the New York penal law pertains to "restitution or reparation to the victim of the crime".

A7811 amends this section by adding the following sentence:

Groups Urge Reform of Section 1030

8/3. The Center for Democracy and Technology (CDT) and other groups and individuals sent a letter to Sen. Patrick Leahy (D-VT) and Sen. Charles Grassley (R-IA), the Chairman and ranking Republican of the Senate Judiciary Committee (SJC) urging revision of the Computer Fraud and Abuse Act, which is codified at 18 U.S.C. § 1030.

They write that it is "both overbroad and vague" and "increasingly outdated". Most importantly, "The CFAA imposes civil and criminal liability for accessing a protected computer ``without´´ or ``in excess of´´ authorization, but fails to define ``authorization.´´"

"As a result of this lack of clarity, several courts have used companies' network terms of use, which lay out contractual constraints on users' use of those networks, to also define what constitutes criminal behavior on those networks. The consequence is that private corporations can in effect establish what conduct violates federal criminal law when they draft such policies."

They add that "At least one federal prosecutor has brought criminal charges against a user of a social network who signed up under a pseudonym in violation of terms of service."

See, stories titled "Lori Drew Pleads Not Guilty in Section 1030 Case" in TLJ Daily E-Mail Alert No. 1,794, June 23, 2008, "Law Professors Argue for Dismissal of MySpace Section 1030 Prosecution" in TLJ Daily E-Mail Alert No. 1,810, August 11, 2008, and "Jury Returns Guilty Verdict in Lori Drew Case" in TLJ Daily E-Mail Alert No. 1,865, December 2, 2008.

"The CFAA should focus on malicious hacking and identity theft and not on criminalizing any behavior that happens to take place online in violation of terms of service or an acceptable use policy", they conclude.

The signers of the letter include representatives of the CDT, American Civil Liberties Union (ACLU), Tech Freedom, Competitive Enterprise Institute (CEI), and others.

The SJC is scheduled to hold a hearing titled "Cybercrime: Updating the Computer Fraud and Abuse Act to Protect Cyberspace and Combat Emerging Threats" on September 7, 2011. This hearing had been scheduled for August 3. The witnesses will be James Baker (DOJ's Associate Deputy Attorney General) and Pablo Martinez (U.S. Secret Service). See, notice.

See also, story titled "7th Circuit Applies Computer Hacking Statute to Use of Trace Removers on Employee Laptops" in TLJ Daily E-Mail Alert No. 1,326, March 9, 2006, and story titled "9th Circuit Construes Meaning of Without Authorization in Section 1030" in TLJ Daily E-Mail Alert No. 1,983, March 15, 2009.

More News

8/3. On August 3, 2011, the Department of Justice (DOJ) issued a release, Attorney General Eric Holder speech, and the Department of Homeland Security (DHS) issued a release, that update progress in prosecuting users of an child pornography internet bulletin board. The DOJ and DHS call this "Operation Delego". The DOJ release state that this operation is targeting "a private, members-only, online bulletin board that was created and operated to promote pedophilia and encourage the sexual abuse of very young children, in an environment designed to avoid law enforcement detection". The release adds that "Members communicated using aliases or ``screen names,´´ rather than their actual names. Links to child pornography posted on Dreamboard were required to be encrypted with a password that was shared only with other members. Members accessed the board via proxy servers, which routed Internet traffic through other computers so as to disguise a user’s actual location and prevent law enforcement from tracing Internet activity." Indictments have charged 72 persons, 20 only by online aliases. The 52 named defendants have been arrested. 13 have been arrested abroad. 13 have pled guilty. 4 have been sentenced.

8/3. The American Civil Liberties Union (ACLU) announced in a release that its 34 affiliates "are sending 379 requests to local law enforcement agencies large and small demanding to know when, why and how they are using cell phone location data to track Americans." (Emphasis added.) Theaw requests rely upon state freedom of information acts (FOIA). The ACLU's release states these these FOIA requests ask for records that relate to "whether law enforcement agents demonstrate probable cause and obtain a warrant to access cell phone location data", "statistics on how frequently law enforcement agencies obtain cell phone location data", "how much money law enforcement agencies spend tracking cell phones", and "other policies and procedures used for acquiring location data".

8/3. The Public Knowledge (PK) released a paper [16 pages in PDF] titled "4G + Data Caps = Magic Beans". The author is the PK's Michael Weinberg. This paper states that "4G, the next generation of wireless data technology, promises higher speeds and better wireless internet experiences" and "is a performance upgrade by almost any metric". However, it states that "The 4G offered by major wireless carriers (with the notable exception of Sprint) is a waste of money because it comes with strict data caps. These data caps actively discourage the types of activities that 4G enables." (Parentheses in original.) This paper states that the 2GB caps in the 4G data plans offered by AT&T and Verizon do "not completely eliminate the usefulness of having a wireless data connection. It is possible to download emails or browse the internet without hitting the limit. However, it is hard to do the types of activities that 4G is advertised as enabling without quickly flirting with the caps."

8/3. The Federal Communications Commission (FCC) issued a Public Notice that requests comments regarding certain universal service and intercarrier compensation reform issues. The FCC released this item on August 3, 2011. It is DA 11-1348 in WC Docket Nos. 10-90, 07-135, 05-337, and 03-109, CC Docket Nos. 01-92 and 96-45, and GN Docket No. 09-51. See also, notice in the Federal Register, Vol. 76, No. 154, Wednesday, August 10, 2011, at Pages 49401-49408. The deadline to submit initial comments is August 24, 2011. The deadline to submit reply comments is August 31, 2011.

Senators Gillibrand and Hatch Introduce International Cybercrime Reporting and Cooperation Act

8/2. Sen. Kirsten Gillibrand (D-NY) and Sen. Orrin Hatch (R-UT) introduced S 1469 [LOC | WW], the "International Cybercrime Reporting and Cooperation Act".

It provides that a federal agency designated by the President shall research and write annual reports that identify the bad actor nations that have weak laws and/or enforcement regimes with respect to cyber criminals, develop an action plan, and then use various foreign policy tools to attempt to prod those nations into becoming better actors.

The tools available to prod bad actors would include (1) "Suspend, restrict, or withdraw the provision of foreign assistance", (2) "Instruct the United States Executive Director of each multilateral development bank ... to restrict or oppose the approval of any new financing", and (3) "Suspend, limit, or withdraw any preferential treatment for which the country qualifies under the Caribbean Basin Economic Recovery Act ..., the African Growth and Opportunity Act ..., or any other trade preference program".

The bill focuses on cybercrime abroad, but also addresses foreign based threats to US intellectual property rights (IPR) and electronic commerce.

The bill was referred to the Senate Foreign Relations Committee (SFRC).

Similar legislation was introduced, but not enacted, in the 111th Congress. S 1469 is a revised version of S 3155 [LOC | WW], also titled the "International Cybercrime Reporting and Cooperation Act", from the 111th Congress. Sen. Gillibrand introduced that bill on March 23, 2010. Rep. Yvette Clarke (D-NY) introduced the companion bill in the House, HR 4962 [LOC | WW], on March 25, 2010. See, story titled "International Cyber Crime Bills Introduced in Senate and House" in TLJ Daily E-Mail Alert No. 2,067, March 30, 2010.

Sen. Kirsten GillibranSen. Gillibrand (at right) stated in a release that "If we're going to protect our networks, our infrastructure, our economy and our families, we have to go after cyber criminals wherever they may be -- and it must be an international effort. Our legislation requires the president to provide a global assessment, identify threats from abroad, work with other countries to crack down on their own cyber criminals, and urge the president to cut off U.S. assistance and resources for countries that refuse to take responsibility for cybersecurity. Our legislation will make America safer by getting tough on cybercrime globally, and coordinating with our partners in the international community."

Intellectual Property Rights. The process that would be created by this bill is similar to the existing Special 301 process for protecting US IPR abroad.

Section 301 is a statutory means by which the U.S. asserts its rights, including its rights under World Trade Organization (WTO) agreements. In particular, under the "Special 301" provisions of the Trade Act of 1974, the Office of the U.S. Trade Representative (OUSTR) identifies other countries that deny adequate and effective protection of IP or deny fair and equitable market access to U.S. artists and industries that rely upon IP protection. The Special 301 provisions are codified at 19 U.S.C. § 2411, et seq.

The OUSTR conducts periodic reviews, and places certain nations on its "watch list" or "priority watch list". The statute then provides that if the OUSTR determines that "the rights of the United States under any trade agreement are being denied", then the OUSTR "shall take action". For example, it may "impose duties or other import restrictions", or "suspend, withdraw, or prevent the application of, benefits of trade agreement concessions to carry out a trade agreement with the foreign country".

This bill also provides that the annual reports examine any country that is "significant with respect to efforts to combat cybercrime" against the US or US persons, and any country "that disrupts United States electronic commerce or otherwise negatively impacts the trade or intellectual property interests of the United States".

Sen. Orrin HatchSen. Hatch (at left), is a keen advocate of intellectual property rights, and the sole original cosponsor of the just introduced bill. He stated in the Senate that this bill would "establish a framework for global cooperation on the fight against cybercrime." See, Congressional Record, August 2, 2011, at Page S5254.

He elaborated that "The countries to be reviewed are those with a significant role in efforts to combat cybercrime impacting U.S. Government, entities and persons, or disrupting U.S. electronic commerce or intellectual property interests."

He added that "Cyberspace remains borderless, with no single proprietor. Accordingly, the United States must take the lead on maintaining the openness of the Internet, while securing accountability. If a country is a haven for cybercrime, or simply has demonstrated a pattern of uncooperative behavior with efforts to combat cybercrime, that nation must be held accountable."

Senate to Take Up House Patent Bill in September

8/2. Sen. Harry Reid (D-NV), the Senate Majority Leader, announced in a release that on August 2, 2011, he filed cloture on the motion to proceed to HR 1249 [LOC | WW], the "American Invents Act", the House version of the patent reform bill.

This release states that "By unanimous consent, this cloture vote will occur on Tuesday, September 6th following the roll call vote on confirmation of Executive Calendar #109, Bernice Bouie Donald to be US Circuit Judge for the 6th Circuit, which will be at approximately 5:30pm."

The Senate passed its version of this bill, S 23 [LOC | WW], also titled the "America Invents Act", on March 8, 2011. The House passed its bill on June 23, 2011.

Sen. Patrick Leahy (D-VT), the sponsor of S 23, stated in a release that "Congress is closer than ever to enacting meaningful reforms to give American inventors and innovators the 21st century patent system they need to compete in an evolving global marketplace. The product of six years of debate, the America Invents Act will help the Patent and Trademark Office address a crippling backlog of patent applications by providing the tools and resources it needs to issue high quality patents more quickly and efficiently."

He added that "When the Senate passed the America Invents Act in March, I said the bill was not what every Senator may want, or what every stakeholder sought in the debate. But the bill the House has passed is an important and comprehensive step forward to help unleash American innovation, create jobs, and bolster our economy. The time has come to send the America Invents Act to the President’s desk to be signed into law. I hope all Senators will join me, again, in passing this important bill after the August recess."

FCC Releases Performance Report on the 13 Largest Wireline BIAS Providers

8/2. Federal Communications Commission (FCC) released a report titled "Measuring Broadband America: A Report on Consumer Wireline Broadband Performance in the U.S."

This report, prepared by the FCC's Office of Engineering and Technology (OET) and Consumer and Governmental Affairs Bureau, finds that the largest wireline (cable, DSL and fiber) based broadband internet access service (BIAS) providers are for the most part providing service at or near advertised speeds.

Verizon FIOS and Comcast exceed advertised download speeds for peak hours (7-11 PM Monday through Friday) and for 24 hour average, while some providers, notably Cablevision, fall below advertised download speeds.

8 of the 14 services covered by this report exceeded advertised upload speeds for both peak and 24 hour periods.

This report states that it presents the results of a "performance study of residential wireline ... broadband service in the United States using measurement technology deployed in the consumer’s home, focusing on three technologies -- digital subscriber line (DSL), cable, and fiber-to-the-home." The FCC "examined service offerings from 13 of the largest broadband providers". The report treats Verizon DSL and FIOS separately.

It finds that "For most participating broadband providers, actual download speeds are substantially closer to advertised speeds than was found in data from early 2009". See, report [30 pages in PDF] titled "Broadband Performance".

It states that "On average, during peak periods DSL-based services delivered download speeds that were 82 percent of advertised speeds, cable-based services delivered 93 percent of advertised speeds, and fiber-to-the-home services delivered 114 percent of advertised speeds."

Also, "On average, DSL-based services delivered 95 percent of advertised upload speeds, cable-based services delivered 108 percent, and fiber-to-the-home services delivered 112 percent."

Moreover, it finds, "Some cable-based services offer burst speed techniques, marketed under names such as ``PowerBoost,´´ which temporarily allocate more bandwidth to a consumer's service. The effect of PowerBoost is temporary -- it usually lasts less than 15 to 20 seconds ... Burst speed techniques increased short-term download performance by as much as 52 percent during peak periods for some offerings, and as little as 6 percent for other offerings".

Comcast's Cathy Avgiris wrote in a short piece that "the FCC has not only found that ISPs in America largely deliver on their advertised speeds, but that on average Comcast's Xfinity Internet service exceeds our advertised speeds". She added that "reinforces our claim that Comcast delivers the fastest speeds to more homes than anyone and provides the best online experience for all of the Internet-connected devices consumers now have in the home".

AT&T's Bob Quinn wrote in a short piece that this report shows that "American consumers are getting the broadband speeds they’re paying for". He added that "consumers are getting high-quality broadband services from their ISPs. Perhaps now we can get past the rhetoric about advertised vs. actual speeds".

Dan O'Connell, head of the FTTH Council, stated in a release that "This FCC report, which is firmly grounded in the experience of broadband consumers across the country, provides further evidence of what we have been saying for some time -- that FTTH networks are superior to other access technologies with regard to delivering fast broadband consistently and reliably ... In the years ahead, only fiber to the home will be able to deliver the level of performance that will be needed for consumers to keep pace with emerging applications and services and the bandwidth they will require."

Derek Turner of the Free Press, a constant critic of phone and broadband companies, stated in a release that "No matter how industry tries to put a positive spin on these results, the report shows conclusively that many Americans are simply not getting what they pay for. This study indicates Comcast, Cox and Verizon FiOS largely perform well, but other companies like Cablevision, AT&T, MediaCom and Frontier all fail to deliver their customers the quality of service promised."

Genachowski Addresses BIAS Providers' Performance

8/2. Federal Communications Commission (FCC) Chairman Julius Genachowski gave a speech at an event at a Best Buy store in Washington DC for the release of the FCC's report on performance by the largest wireline broadband internet access service (BIAS) providers.

He stated that "there are questions about whether or not consumers get what they pay for. During the FCC’s development of the National Broadband Plan, we reported evidence from 2009 that actual broadband speeds significantly lagged advertised speeds." See, report [30 pages in PDF] titled "Broadband Performance".

That report found that "actual download speeds experienced by U.S. consumers lag advertised speeds by roughly 50%" and that "This gap is similar across technologies".

Julius GenachowskiGenachowski (at left) said on August 2 that the FCC has just completed the "most comprehensive and rigorous assessment ever of broadband performance in the United States", and the finding is that "most major ISPs are providing service close to what they're advertising".

He stated that "I expect broadband providers will look closely at the data we’re releasing today and ensure they’re providing accurate, relevant, and easily understandable information to consumers about their services. Providers should be aware that this survey isn’t intended as a one-time thing."

He also discussed policy. First, he said that it is "so important that we free up more spectrum ... for wireless broadband."

He continued that "One of the most effective ways to do that is a market-based solution known as voluntary incentive auctions. This solution, which I’m optimistic about -- and which has broad, bipartisan support on the Hill, throughout the broadband economy, and from a cross-section of the nation's leading economists -- will bring new spectrum to the market, money to the Treasury, and will help solve growing challenges like data congestion and dropped connections."

He also asserted that the FCC "is now in the home stretch of a major overhaul of our Universal Service policies".

Agenda for FCC's August 9 Meeting

8/2. The Federal Communications Commission (FCC) released an agenda for its event on August 9, 2011, titled "open meeting".

It contains three of the four items that the FCC listed in the tentative agenda released on July 19, 2011. See, story titled "FCC Releases Tentative Agenda for August 9 Meeting" in TLJ Daily E-Mail Alert No. 2,264, July 20, 2011.

First, the FCC is scheduled to adopt a Report and Order (R&O), Further Notice of Proposed Rulemaking (FNPRM), and Memorandum Opinion and Order (MOO) regarding use of spectrum bands for wireless backhaul. This is WT Docket No. 10-153.

Second, the FCC is scheduled to adopt a NPRM regarding foreign ownership of wireless phone companies and certain aeronautical licensees, but not foreign ownership of broadcast licensees.

Third, the FCC is scheduled to adopt an Order on Reconsideration "addressing two section 310(b)(4) foreign ownership rulings granted to Verizon Wireless in two proceedings approving its acquisitions of Rural Cellular Corporation (RCC) and Alltel Corporation (Alltel)." This is WT Docket Nos. 07-208 and 08-95.

This meeting is scheduled to take place on Tuesday, August 9, 2011, at 10:30 AM, in the FCC's Commission Meeting Room., TW-C305, 445 12th St., SW. The FCC will webcast this event.

People and Appointments

8/2. The Senate confirmed Sara Darrow to be a Judge of the U.S. District Court for the Central District of Illinois.

8/2. The Senate confirmed Richard Jackson to be a Judge of the U.S. District Court for the District of Colorado.

8/2. The Senate confirmed Kathleen Williams to be a Judge of the U.S. District Court for the Southern District of Florida.

8/2. The Senate confirmed Nelva Ramos to be a Judge of the U.S. District Court for the Southern District of Texas.

8/2. President Obama announced his intent to nominate Charles McCullough to be Inspector General of the Intelligence Community in the Office of the Director of National Intelligence. See, White House news office release. He is currently the Deputy Inspector General.

8/2. President Obama announced his intent to nominate Ashton Carter to be Deputy Secretary of Defense in the Department of Defense (DOD). See, White House news office release. He is currently Under Secretary of Defense for Acquisition, Technology & Logistics.

More News

8/2. The National District Attorneys Association (NDAA) sent a letter to Senate leaders, and a letter to House leaders, urging passage of S 968 [LOC | WW], the "Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011", or the PROTECT IP Act. The NDAA wrote that "Criminals have turned to the Internet, abusing its virtually unlimited distribution opportunities to expand their illicit activities and fatten their profits." It continues that "A growing number of these rogue sites are based overseas, presenting law enforcement with unique enforcement challenges." It concludes that "To effectively disrupt the rogue sites' business model, law enforcement needs the authority to enlist the help of other players in the Internet ecosystem, including infrastructure providers like ISPs and financial service providers like payment processors, to cut these sites off from the American marketplace."

Rep. Honda Reintroduces Nanotechnology Funding Wish List

8/1. Rep. Mike Honda (D-CA) introduced HR 2749 [LOC | WW], the "Nanotechnology Advancement and New Opportunities Act", or "NANO Act". This bill is a long wish list of new grant funding for numerous federal agencies, and new tax credits. The total annual spending would be $170 Million per year beginning in FY 2012. He introduced a very similar bill in 2009.

This bill would add a new Section 54I to the Internal Revenue Code (IRC) that creates a tax credit for "the purchase of qualified nanotechnology developer stock". Such stock would be "common stock in a C corporation or any membership unit in a State-registered limited liability company if ... such corporation or company is a qualified nanotechnology developer ..."

This bill would also add a new Section 30E to the IRC that creates a tax credit for "nanotechnology education and training".

This bill would also establish a grant program at the Department of Commerce (DOC) to "support the establishment and development of incubators". Such "incubators" would be entities "affiliated with or housed in a degree-granting institution that provides space and coordinated and specialized services to entrepreneurial businesses that work in the field of nanotechnology commercialization ..." The bill would authorize $25 Million per year for three years.

This bill would also authorize the appropriation of more money ($10 Million per year indefinitely) for the National Science Foundation (NSF) for the "development of computer aided design tools for nanotechnology applications".

It would also authorize the appropriation of more money ($15 Million per year for four years) for the NSF for "development of curriculum materials for interdisciplinary nanotechnology courses at institutions of higher education".

This bill would also authorize the appropriation of more money for the Department of Energy (DOE), Department of Health and Human Services (DHHS), Environmental Protection Agency (EPA), and Department of Homeland Security (DHS) to be spent on nanotechnology related projects. The bill would authorize $30 Million per year per agency indefinitely.

The bill was referred to the House Science Committee (HSC), House Commerce Committee (HCC), House Ways and Means Committee (HWMC), and House Homeland Security Committee (HHSC). There are no original cosponsors.

This is a revision and reintroduction of HR 820 [LOC | WW], a bill with the same title that Rep. Honda introduced in the 111th Congress.

Rep. Honda stated in a release that "The NANO Act is a comprehensive bill to promote the development and responsible stewardship of nanotechnology in the United States. The legislation draws upon the work of the Blue Ribbon Task Force on Nanotechnology that I convened. The Blue Ribbon Task Force included nanotechnology experts with backgrounds in established industry, startup companies, consulting groups, non-profits, academia, government, medical research, and venture capital from around my home state of California, which is a leader in the field of nanotechnology."

FCC Program Carriage Order Includes Standstill Provision

8/1. The Federal Communications Commission (FCC) released an order [120 pages in PDF] that amends its rules governing its MVPD program carriage complaint process. The new rules provide for the issuance of a preliminary standstill order. Cable companies oppose this.

This item contains a Second Report and Order in MB Docket No. 07-42 and another Notice of Proposed Rulemaking (NPRM) in a new proceeding, MB Docket No. 11-131.

In 1992 the Congress enacted the "Cable Television Consumer Protection and Competition Act of 1992", Public Law No. 102-385. It directs the FCC to write program carriage rules. The FCC first enacted program carriage rules in 1993.

47 U.S.C. § 536, which was enacted as part of the 1992 Act, provides, among other things, that the FCC shall write rules that are designed to prevent a multichannel video programming distributor (MVPD), which includes cable companies, from "engaging in conduct the effect of which is to unreasonably restrain the ability of an unaffiliated video programming vendor to compete fairly".

It also requires the FCC to write rules tht prohibit "coercing a video programming vendor to provide, and from retaliating against such a vendor for failing to provide, exclusive rights against other multichannel video programming distributors as a condition of carriage on a system".

Section 536 also requires the FCC write procedural rules for an administrative complaint process. "Such regulations shall ...provide for expedited review of any complaints made by a video programming vendor pursuant to this section" and "provide for appropriate penalties and remedies for violations of this subsection, including carriage".

The statute does not provide for preliminary relief, or temporary injunctive relief prior to the issuance of a final order on a complaint.

Also, 47 U.S.C. § 544 provides that "Any Federal agency, State, or franchising authority may not impose requirements regarding the provision or content of cable services, except as expressly provided in this subchapter."

One key component of the just adopted rules changes is the inclusion of a standstill provision. The actual rules are in Appendix B, beginning at page 58.

The new rules provide, among other things, that "A program carriage complainant seeking renewal of an existing programming contract may file a petition along with its complaint requesting a temporary standstill of the price, terms, and other conditions of the existing programming contract pending resolution of the complaint."

The new rules also set out the findings that the FCC's Media Bureau (MB) or FCC administrative law judge (ALJ) must make before granting such an order. It mirrors the equitable principles that are prerequisite for the issuance of a pre-trial injunction.

FCC Commissioner Michael Copps wrote in his statement that "Video distributors are now more likely to be producers themselves, often with far greater leverage and new incentives to favor their own content over that of independent producers. Modernizing these rules is essential to ensure that consumers have the ability to view a variety of diverse programming at the lowest possible cost and hopefully to foster more independent production."

He added that the standstill procedure responds to "programming vendors' concerns of retaliatory action by an MVPD".

Over four years ago the FCC released a NPRM. (This FCC adopted this item on March 2, 2007, but did not release it until June 15, 2007. It is FCC 07-18 in MB Docket No. 07-42.) The just released order asserts Section 536 and that NPRM as the legal basis for issuing these new rules. However, the just released order contains new rules that were not proposed in that NPRM. Hence, Commissioner Robert McDowell and cable companies have cried foul.

McDowell wrote in his separate statement that "Regrettably, the majority has adopted rules requiring multichannel video programming distributors (``MVPDs´´) to continue to carry programming on pre-existing terms and conditions, also known as ``standstill´´ arrangements. Pursuant to these rules, an agreement will be extended until a program carriage dispute is resolved. The Commission, however, did not provide adequate notice and opportunity for comment under the Administrative Procedure Act (``APA´´). An analysis of a possible standstill framework would benefit significantly from further debate. Accordingly, I respectfully dissent from this portion of the Order."

He continued that "The APA requires that a notice contain ``either the terms or substance of the proposed rule or a description of the subjects and issues involved.´´ Here, as evidence of notice, the majority points to one sentence in a 2007 notice requesting comment on whether to adopt rules ``to protect programmers from potential retaliation if they file a complaint.´´ The majority asserts that the standstill rules are a ``logical outgrowth´´ of this proposal. I disagree." (Footnotes omitted.)

Michael PowellMichael Powell (at left), head of the National Cable and Telecommunications Association (NCTA), stated in a release that "The FCC's program carriage decision represents an unfortunate trifecta: a flawed process that the FCC stubbornly refused to correct, substantive policy discussions that show little regard for the limits of agency authority or constitutional rights, and a disturbing lack of appreciation of the potential impact of government intervention on consumers or the marketplace. In other words, we are profoundly disappointed not only in what the FCC did but how they did it. Regrettably, we must now explore other avenues for redress."

For more detailed statements of the legal objections to the FCC's standstill procedure, see Comcast's letter to the FCC of July 25, 2011, and Rick Chessen's (NCTA) letter to FCC of July 6, 2011.

District Court Enjoins Zediva

8/1. The U.S. District Court (CDCal) issued an order [12 pages in PDF] in Warner Bros. v. WTV Systems, titled "Order Granting Motion of Motion Picture Studio Plaintiffs for Preliminary Injunction".

The District Court concluded that the Zediva service provides an unauthorized public performance of copyrighted movies, rather that a permissible DVD rental service, and issued a preliminary injunction.

The plaintiffs (Warner Bros., Columbia, Disney, Paramount, Twentieth Century Fox, and Universal) filed a complaint on April 5, 2011, in the District Court alleging that WTV Systems' Zediva web site "streams Plaintiffs' movies on demand to paying customers over the Internet" without plaintiffs' authorization.

They alleged copyright infringement in violation of 17 U.S.C. § 501. They alleged that Zediva provides a public performance in violation of their exclusive rights of copyright, under 17 U.S.C. § 106(4).

See, stories titled "Movie Companies Sue Zediva for Copyright Infringement" and "Commentary: Zediva, Movie Streaming, and the First Sale Doctrine" in TLJ Daily E-Mail Alert No. 2,217, April 5, 2011.

The District Court opinion lists many ways that consumers can view copyrighted movies with authorization: "by going to a movie theater; by buying a copy of the Copyrighted Work on DVD or Blu-ray Disc; by renting a copy of the Copyrighted Work on DVD or Blu-ray Disc at a bricks-and-mortar store or through a mail subscription service, such as Netflix; by downloading and licensing a permanent copy of the Copyrighted Work through a service, such as; by accessing the Copyrighted Work ``on demand´´ for a fixed period of time through a cable, satellite, or internet delivered video on demand platform, such as Comcast, DirecTV, or Vudo; by viewing the Copyrighted Work through a subscription video on demand streaming service, such as Netflix; by watching the Copyrighted Work on a scheduled subscription cable television channel, such as HBO; or by watching the Copyrighted Work for free on network television."

However, the movie company plaintiffs do not authorize all distribution channels at once. Different distribution channels have different windows. In particular, the Court wrote that they "may not make that Copyrighted Work available through rental DVD mail subscription services, such as Netflix, or rental kiosks, such at Redbox, until 28 days after the initial home video release date." Also, they "may also have granted exclusive rights to a cable television channel to distribute the Copyrighted Work after the initial home video release, and, during that time, the Copyrighted Work is often not available through video on demand."

The Court explained that "Defendants provide their customers with access to DVDs purchased by Defendants containing the Copyrighted Works. To operate their service, Defendants have purchased hundreds of DVD players and installed them in cabinets at a data center they lease in Santa Clara, California. Defendants also have purchased copies of Plaintiffs’ Copyrighted Works on DVD, and place those DVDs in their DVD players, with each DVD remaining in its respective DVD player while it is transmitted to Defendants’ customers on multiple occasions. ... Defendants stream the content of the DVD to a customer ..."

As a consequence of their unauthorized streaming, the Zediva defendants "are able to offer performances of Plaintiffs' Copyrighted Works at below-market prices. While most licensed internet video on demand services currently charge between $3.99 and $5.99 to watch new releases of Plaintiffs' Copyrighted Works, Defendants charge only $1.99 per movie, or 10 movies for $10. Defendants also have an availability advantage over licensed internet video on demand services because, unlike Defendants, those services must take certain Copyrighted Works off the market during exclusivity periods that certain Plaintiffs may have granted to subscription cable television channels while Defendants can continue to offer those Copyrighted Works during the exclusivity period." (Footnote omitted.)

The District Court then listed the showings that a plaintiff must make for a preliminary injunction: "(1) a likelihood of success on the merits; (2) a likelihood that the moving party will suffer irreparable harm absent a preliminary injunction; (3) that the balance of equities tips in the moving party’s favor; and (4) that an injunction is in the public's interest."

First, as to the merits of the claim, the District Court began with the statute, 17 U.S.C. § 106(4), which provides that "the owner of copyright under this title has the exclusive rights to do and to authorize any of the following ... (4) in the case of ... motion pictures and other audiovisual works, to perform the copyrighted work publicly".

The key legal issue in this case is whether what Zediva does constitutes performing the copyrighted work publicly -- that is, a public performance. The Court applied the definitions from Section 101 of the Copyright Act, and examined the legislative history of the relevant definitions, and concluded that Zediva provides public performances. Hence, the plaintiffs are likely to prevail on the merits.

Second, as to irreparable harm, the District Court concluded that the Zediva defendants are interfering with the movie company plaintiffs' ability to negotiate contracts, "because potential licensees will not be willing to pay a premium for a non-exclusive period". In addition, the plaintiffs are not receiving normal licensing fees, the continued existence of the authorized licensees is threatened, and "the development of a successful and lawful video on demand market" is threatened.

The District Court concluded also, with little discussion, that the third and fourth elements, balance of equities or hardships, and public interest, weigh in favor of the plaintiffs. Therefore, it granted the motion for preliminary injunction.

The Motion Picture Association of America's (MPAA) Dan Robbins stated in release that this "decision is a great victory for the more than two million American men and women whose livelihoods depend on a thriving film and television industry. Judge Walter rejected Zediva's argument that it was `renting´ movies to its users, and ruled, by contrast, that Zediva violated the studios' exclusive rights to publicly perform their movies, such as through authorized video-on-demand services."

"Movie fans today have more on-demand options than ever for watching films at home, from iTunes to Netflix to Amazon to Vudu to Hulu to the VOD offerings from cable and satellite operators. All these legitimate companies have obtained licenses from the copyright owners. The court found Zediva's service threatened the development of these lawful VOD and Internet-based services."

This case is Warner Bros. Entertainment Inc., et al. v. WTV Systems, Inc., U.S. District Court for the Central District of California, D.C. No. CV 11-2817-JFW (Ex), Judge John Walter presiding.

People and Appointments

8/1. A group of former Paul Hastings attorneys announced the formation of the Telecommunications Law Professionals in Washington DC: Carl Northrup, Michael Lazarus, Andrew Morentz, John Griffith Johnson, Vance Schuemann, and Jessica DeSimone.

8/1. Gary Locke took the oath of office to become the U.S. Ambassador to the People's Republic of China. He resigned from his previous position of Secretary of Commerce. See, Department of Commerce release. Rebecca Blank, the acting Deputy Secretary, is now the acting Secretary of Commerce.

More News

8/1. The Metropolitan Police in London, United Kingdom, announced in a release the arrest of Anonymous hacker Jake Davis. This release states that he is charged with unauthorised access to a computer system in violation of Section 3 of the U.K. Computer Misuse Act 1990, conspiracy to carry out a distributed denial of service (DDOS) attack on the website of the Serious and Organised Crime Agency in violation of Section 1 Criminal Law Act 1977, and other offenses.

8/1. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) released its draft SP 800-133 [24 pages in PDF] titled "Recommendation for Cryptographic Key Generation". The deadline to submit comments to September 30, 2011.

8/1. The Copyright Royalty Judges published a notice in the Federal Register announces, describes, recites, and sets the effective date (August 31, 2011) for, it rules changes regarding authorizing the use of proxy reports of use to permit distribution of royalties collected for the period April 1, 2004, through December 31, 2009, for the public performance of sound recordings by means of digital audio transmissions pursuant to statutory license. See, Federal Register, Vol. 76, No. 147, Monday, August 1, 2011, at Pages 45695-45696.

Go to News from July 26-31, 2011.