Source: http://www.techlawjournal.com/alert/2005/11/04.asp
Timestamp: 2019-04-23 11:00:48+00:00

Document:
TLJ Daily E-Mail Alert No. 1,247, November 4, 2005.
November 4, 2005, 8:00 AM ET, Alert No. 1,247.
11/3. The Federal Communications Commission (FCC) adopted, but did not release, a "Notice of Proposed Rulemaking" (NPRM) regarding Section 621(a)(1)'s directive that local franchising authorities (LFAs) not unreasonably refuse to award competitive franchises. This NPRM also includes numerous tentative conclusions.
The FCC issued only a short news release [PDF] describing this NPRM. Also, the four Commissions released statements. This NPRM is FCC 05-189 in MB Docket 05-311.
The vote was unanimous, but the four Commissioners made clear in their statements that they possess varying degrees of enthusiasm for this proceeding.
FCC Release. The FCC release states that the NPRM asks for comments on whether LFAs "are unreasonably refusing to grant competitive franchises" and "what problems cable incumbents have encountered with LFAs, including how best the Commission can ensure that the local franchising process is not inhibiting the ability of incumbent cable operators to invest in broadband services."
The FCC release states that the NPRM asks "whether the Commission has authority to implement the procompetitive mandate of Section 621(a)(1)."
The release also describes several tentative conclusions contained in the NPRM. The release states that it "tentatively concludes that the Commission is empowered by provisions of both Title I and Title VI of the Communications Act to take steps appropriate to ensure that the local franchising process does not serve as an unreasonable barrier to entry for competitive cable operators. The Notice also tentatively concludes that the Commission may deem to be preempted and superseded any law or regulation of a State or LFA that causes an unreasonable refusal to award a competitive franchise in contravention of Section 621(a)."
Title VI pertains to cable regulation, and includes Section 621. Title I is merely a short passage that contains a general statement regarding protecting against public interest harms. However, the FCC is engaged in the process of classifying and reclassifying services as Title I services, rather than as Title II communications or Title VI cable services, and creating a new regulatory framework, unguided by statute, under the principle of ancillary jurisdiction.
The FCC release also states that the NPRM tentatively concludes that "it is not unreasonable for an LFA, in awarding a franchise, to ``assure that access to cable service is not denied to any group of potential residential cable subscribers because of the income of the residents of the local area in which such group resides´´; ``allow [a] cable system a reasonable period of time to become capable of providing cable service to all households in the franchise area´´; and ``require adequate assurance that the cable operator will provide adequate public, educational and governmental access channel capacity, facilities, or financial support.´´"
The FCC release also states that "Assuming there is both the need and the authority for Commission intervention, the Notice asks how the Commission should interpret the mandate of Section 621(a)(1). The item tentatively concludes that the Commission should interpret the relevant language of Section 621(a)(1) broadly in order to prohibit not only unreasonable refusals to award competitive franchises, but also the establishment of procedures and other requirements that unreasonably interfere with the ability of would-be new entrants to introduce quickly their competitive offerings."
The FCC release also states that the NPRM asks "what specific steps should the Commission take to implement Section 621(a)(1)."
The FCC release also states that the NPRM asks whether the FCC has authority "to establish a minimum amount of time for potential competitors with existing facilities to build out their networks beyond their current service territories", and "what would constitute a reasonable minimum timeframe".
The FCC release also states that the NPRM asks whether the FCC "should address actions at the state level, to the extent we find such actions create unreasonable barriers to entry for potential competitors."
The release also states that the FCC will hold a hearing. It does not set a date.
Commissioners' Spin. FCC Chairman Kevin Martin wrote in his statement [PDF] that "Telephone companies and other facilities-based new entrants to the multichannel video programming distribution (MVPD) market have the potential to provide strong competition to incumbent cable operators. These new entrants are making significant investments in the infrastructure that enables them to offer video service along with telephone and broadband services to consumers. We are hearing from some providers that local authorities may be making the process of getting franchises unreasonably difficult. New video entrants, regardless of the technology they employ, should be encouraged -- not impeded from entry."
Commissioner Kathleen Abernathy wrote in her statement [PDF] that "With the issuance of this Notice we begin the process of answering a complex question: when, if ever, do cable franchising requirements become unreasonable barriers to entry by competing cable service providers, and how should “unreasonable” barriers be defined and dealt with?"
Commissioner Jonathan Adelstein voted for the NPRM, but wrote in his statement [PDF] that "it remains far from clear whether Congress specifically intended any role for the Commission in preempting and superseding the practices of local governments in the local franchising process"
Adelstein (at left) continued that the FCC "needs to tread with caution and care before it asserts any authority to interpose itself with LFAs to the extent Congress specifically delegated power to local officials. We are going out on limb already by creating a ``de facto´´ refusal theory and tentatively concluding that the Commission has the ability to determine whether an LFA is ``unreasonably refus[ing] to award a competitive franchise.´´"
He added that "I would not have been willing to support this NPRM if we had not also made clear that we will consider it reasonable for local officials to carry out their basic responsibilities as Congress intended. Specifically, we tentatively conclude that it is ``not unreasonable´´ for an LFA to carry out its statutory mandate to prevent economic redlining, to establish reasonable build-out requirements to ``all households in the franchise area,´´ and to ``provide adequate public, educational and governmental access channel capacity, facilities or financial support.´´ We should not and indeed cannot usurp for ourselves the authority granted by Congress to local governments. This tentative conclusion makes clear we respect the powers specifically enumerated by Congress for the LFAs."
Commissioner Michael Copps stated that "more competition in the delivery of video services would bring significant benefits to consumers". He wrote in his statement [PDF] that "Cable and telephone companies are beginning to compete to offer consumers the much-heralded triple play -- bundles of telephone, video and Internet services. Cable companies have already jumped into the voice service market, and telephone companies are entering the video fray. This crossover is exciting, and it means that old industry boundaries are eroding, giving way to a new and hopefully more consumer-friendly future."
He also praised the local franchising authorities (LFAs) and franchising process, but conceded that "it may be that some changes are called for".
Industry Reaction. Kyle McSlarrow (at right), P/CEO of the National Cable Telecommunications Association (NCTA), stated in a release that "We are pleased that the FCC’s examination of local cable franchising will include existing operators as well as new entrants, which is consistent with our philosophy that communications regulation should treat like services alike. We welcome the opportunity that this notice provides to comment on issues regarding the franchising process that are important to cable operators."
Walter McCormick, P/CEO of USTelecom (aka USTA), stated in a release that "The local franchising process is seriously flawed and has significantly delayed the deployment of video services to consumers. With new entrants eager to enter the video market, the Commission’s action today can help bring more video competition to consumers and eliminate the unnecessary barriers to entry that limit video choice. As we have seen from recent positive action in the states and legislation making its way through Congress, this is an important issue that must be resolved quickly. We applaud Chairman Martin’s leadership on this proceeding and will continue to pursue all avenues to bring more competition to the video market."
BellSouth's Jonathan Banks stated in a release that "We welcome the FCC's effort to examine the interplay between local franchising requirements and the entry of new competitors into the video marketplace. Streamlining the local franchising process and eliminating unreasonable conditions on entering local video markets will help pave the way to increased investment in fiber networks and new technologies." He added that "This FCC effort to ensure that local franchising requirements do not stand in the way of broadband innovation should run on a parallel track with federal and state legislative efforts to move away from a patchwork of entry obligations set by local authorities towards a simplified and uniform set of obligations that will ensure that consumers benefit from new video competition as soon as possible."
11/3. The Federal Communications Commission (FCC) adopted, but did not release, a "First Report and Order and Further Notice of Proposed Rulemaking" regarding expanding the categories of service providers that are subject to the FCC's Emergency Alert System (EAS) mandates.
The FCC issued only a short news release [PDF] describing this item. Also, the four Commissioners released statements. This item is FCC 05-191 in EB Docket No. 04-296.
The FCC initiated this proceeding with an NPRM adopted on August 4, 2004. See, story titled "FCC Adopts NPRM Regarding Emergency Alert System" in TLJ Daily E-Mail Alert No. 954, August 6, 2004. That NPRM is FCC 04-189 in EB Docket No. 04-296.
The order portion of this item amends the FCC's EAS rules to cover providers of digital broadcast and cable TV, digital audio broadcasting, satellite radio, and direct broadcast satellite services.
Chairman Kevin Martin wrote in his statement [PDF] that in addition the EAS "should incorporate the internet".
Commissioner Jonathan Adelstein wrote in his statement [PDF] that the EAS was not used at the time of Hurricane Katrina, Hurricane Rita, the east coast blackout, or the terrorist attacks of September 11, 2001. Nevertheless, he argued that the FCC must mandate that more services providers modify their facilities to become capable of distributing AES communications. Moreover, he stated that he wants multilingual EAS communications.
The FCC's release states that the Report and Order will set a compliance deadline of December 31, 2006, except for digital broadcast satellite (DBS), for which the compliance deadline will be May 31, 2007.
The FCC's release then states that the NPRM portion of this item asks for comments regarding the rules for these newly affected service provides. The FCC seeks comment on how to "develop a next-generation alert and warning system" and the "type of system architecture and common protocols that would be required in such a system".
The release also states that the FCC seeks comments regarding how the FCC "could facilitate the effective integration of wireless technologies into a next generation alert and warning system, and whether traditional telephone companies that plan to provide high definition digital content to customers' homes through fiber optic connections should have public alert and warning responsibilities. In addition, the Further Notice seeks comment on issues relating to the participation of state and local authorities in the EAS system."
See also, statement [PDF] by Commissioner Kathleen Abernathy, and statement [PDF] by Commission Michael Copps.
Also, on October 20, 2005, the Senate Commerce Committee amended and approved S 1753, the "Warning, Alert, and Response Network Act", a bill that would create a new government program titled the "National Alert System". Administrative and rule making authority would be given to a new National Alert Office within the National Oceanic and Atmospheric Administration (NOAA), and the FCC. See, story titled "Senate Commerce Committee Approves WARN Act" in TLJ Daily E-Mail Alert No. 1,238, October 24, 2005.
11/2. The U.S. Court of Appeals (2ndCir) issued its divided opinion [100 pages in PDF] in In Re: Tamoxifen Citrate Antitrust Litigation, a case involving new drug applications (NDAs), the Hatch Waxman Act, and antitrust law. The Court of Appeals affirmed the District Court's summary judgment for defendants.
This is a class action lawsuit brought on behalf of consumers of the drug tamoxifen citrate, and others, alleging that a settlement between Barr Laboratories, Inc., Zeneca, Inc., and AstraZeneca Pharmaceuticals LP violates antitrust law.
The class representatives filed their complaint in the U.S. District Court (EDNY) against Barr, Zeneca, and AstraZeneca, alleging violation of the Sherman Act. The District Court granted summary judgment to the defendants. The plaintiffs appealed.
This case is In Re: Tamoxifen Citrate Antitrust Litigation, U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. No. 03-7641, an appeal from the U.S. District Court for the Eastern District of New York, Judge Leo Glasser presiding. Judge Sack wrote the opinion of the Court of Appeals, in which Judge Raggi joined. Judge Poole wrote a dissenting opinion (at pages 73-100).
This article provides a brief and inadequate summary of the opinion and dissent. This case involves drug patents, not patents information technology patents. Nevertheless, persons interested in technology related law may wish to read this opinion for its discussion of the purposes of, and interaction between, patent law and antitrust law.
Also, the Supreme Court has a pending petition for writ of certiorari in FTC v. Schering-Plough Corp., another case that involves the application of antitrust law and the Hatch Waxman Act. See, story titled "Supreme Court Seeks Views of SG in FTC v. Schering-Plough" in TLJ Daily E-Mail Alert No. 1,244, November 1, 2005.
11/3. The U.S. Court of Appeals (7thCir) issued an opinion [18 pages in PDF] in Kemper v. Cingular, a long running dispute between competitors in the cellular phone market. The Court of Appeals held that "the district court’s denial of Cingular's motion for judgment as a matter of law on Kempner’s claim of tortious interference with prospective business is REVERSED, and judgment as a matter of law on Kempner's claim of tortious interference is GRANTED in favor of Cingular. The remaining rulings of the district court are AFFIRMED." This case is Kemper Mobile Electronics, Inc. v. Southwestern Bell Mobile Services, dba Cingular Wireless, U.S. Court of Appeals for the 7th Circuit, App. Ct. Nos. 04-3411 and 04-3561, appeals from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 02 C 5403, Judge Sidney Schenkier presiding.
11/1. The U.S. Court of Appeals (10thCir) issued its opinion in Western Diversified Services v. Hyundai, a trademark infringement case. The Court of Appeals reversed the District Court's partial summary judgment for the alleged infringer, Hyundai. This case is Western Diversified Services, Inc. v. Hundai Motor America, Inc., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 03-4248, an appeal from the U.S. District Court for the District of Utah, D.C. No. 2:99-CV-84-B.
11/3. The House Commerce Committee's (HCC) Subcommittee on Commerce, Trade, and Consumer Protection approved HR 4127, the "Data Accountability and Trust Act" or DATA, by a vote of 13-8. The Subcommittee rejected several proposed amendments.
11/3. The House amended and approved HR 4128, the "Private Property Rights Protection Act of 2005", by a vote of 376-38. See, Roll Call No. 568. 36 of the 38 votes against the bill were cast by Democrats. The bill was introduced by Rep. James Sensenbrenner (R-WI) and others in response to the March 23, 2005 opinion [58 pages in PDF] of the Supreme Court in Kelo v. New London. Rep. Sensenbrenner stated during House debate that this bill would "restore the property rights of all Americans by establishing a penalty for states and localities that abuse their eminent domain power by denying states or localities that commit such abuse all federal economic development funds for a period of two years. Under this legislation, there is a clear connection between the federal funds that would be denied and the abuse Congress is intending to prevent -- if states or localities abuse their eminent domain power by using ``economic development´´ as a rationale for a taking, they shall not receive federal ``economic development´´ funds that could contribute to similarly abusive land grabs."
11/3. The Senate approved S 1932, the "Deficit Reduction Omnibus Reconciliation Act of 2005", by a vote of 52-47. See, Roll Call No. 303. It was a largely party line vote, with Republican voting yes, and Democrats voting no. This contains technology related components. It will be the subject of further coverage in the TLJ Daily E-Mail Alert.
The Senate will meet at 9:00 AM. It will resume consideration of S 1042, the "National Defense Authorization Act for Fiscal Year 2006".
12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a panel discussion titled "Interconnection Without Regulation: Lessons for Telecommunications Reform from Four Network Industries". The speakers will be Richard Levine (PFF), Bill Hunt (Level 3 Communications), Lyman Chapin (Interisle Consulting Group), and Donald Baker (a former AAG for the Antitrust Division). Randolph May (PFF) will moderate. Lunch will be served. See, notice. Press contact: Patrick Ross at 202 289-8928 or pross at pff dot org or Amy Smorodin at 202 289-8928 or asmorodin at pff dot org. Location: Room B369, Rayburn Building, Capitol Hill.
12:00 NOON. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Practice Committee will host a luncheon titled "Wireless Telecom Practice Committee Luncheon on Mobile Content". The speakers will include Mark Desautels (VP Wireless Internet Development, CTIA), and Jim Healy (T-Mobile USA). The price to attend is $15.00. Registrations and cancellations due by 12:00 NOON on Tuesday, November 1, 2005. See, registration form [MS Word]. Location: Sidley Austin, 1501 K Street, NW, 6th Floor.
Day two of a two day event sponsored by the American Bar Association's (ABA) Standing Committee on Law and National Security titled "15th Annual Review of the Field of National Security Law". Location: Crystal City Marriott, Arlington, VA.
Day five of a five day conference sponsored by the Office of the Secretary of Defense Networks and Information Integration (OSD NII) and the Joint Chiefs of Staff titled "DoD Spectrum Summit 2005". See, notice.For more information, contact Patty dot Hopkins at osd dot mil or 703 607-0613. Location: Radisson Hotel, Annapolis, MD.
9:30 AM. The Senate Judiciary Committee (SJC) may hold a hearing on pending nominations. The SJC frequently cancels of postpones hearings without notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.
9:00 AM. Day one of a two day partially closed meeting of the Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Information Systems Technical Advisory Committee. The agenda of the public portion of the meeting includes "1. Microprocessor Roadmap Update. 2. Update on BIS programs and activities. 3. Quantum Computing. 4. First Annual HPC Review. 5. InfiniBand Technology and the EAR. 6. Industry proposal to change 4A3g. 7. Network Performance discussions. 8. China ``catch all´´ August 9, 2005 Regulation." See, notice in the Federal Register, October 25, 2005, Vol. 70, No. 205, at Page 61601. The BIS did not disclose the agenda of the closed portion of the meeting. Location: DOC, Room 3884, 14th Street between Constitution and Pennsylvania Aves., NW.
9:30 AM. The Senate Judiciary Committee (SJC) may hold a hearing on the use of cameras in courtrooms. The SJC frequently cancels of postpones meetings without notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.
12:15 PM. The Federal Communications Bar Association's (FCBA) Enforcement Committee will host a brown bag lunch titled "Meet the Enforcement Bureau Chief, Kris Monteith". RSVP to Margaret Davis at margaret dot davis at wilmerhale dot com Location: Wilmer Hale, 1801 Pennsylvania Ave., NW.
9:00 AM. The U.S. Chamber of Commerce will host an event titled "Anti-Counterfeiting and Piracy Summit: STOPing the Fakes". See, notice. For more information, contact Scott Eisner at 202 463-5500 or ncfevents at uschamber dot com. The price to attend ranges from free to $195. Location: __.
9:00 AM. Day two of a two day partially closed meeting of the Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Information Systems Technical Advisory Committee. The agenda of the public portion of the meeting includes "1. Microprocessor Roadmap Update. 2. Update on BIS programs and activities. 3. Quantum Computing. 4. First Annual HPC Review. 5. InfiniBand Technology and the EAR. 6. Industry proposal to change 4A3g. 7. Network Performance discussions. 8. China ``catch all´´ August 9, 2005 Regulation." See, notice in the Federal Register, October 25, 2005, Vol. 70, No. 205, at Page 61601. The BIS did not disclose the agenda of the closed portion of the meeting. Location: DOC, Room 3884, 14th Street between Constitution and Pennsylvania Aves., NW.
11/2. The Supreme Court issued another order [PDF] in Laboratory Corp. of America v. Metabolite Laboratories, a patent infringement case that the Supreme Court might use to revise the law of patentable subject matter. On October 31, 2005, the Supreme Court granted certiorari. See, Order List [16 pages in PDF] at page 2.
See also, story titled "Supreme Court Grants Certiorari in LabCorp v. Metabolite" in TLJ Daily E-Mail Alert No. 1,244, November 1, 2005.
The just released order states a follows: "Having been advised by the Chief Justice that he now realizes that he should have recused himself from participation in this case, and does now recuse himself, the Court vacates its order of Monday, October 31, 2005. The Court has reconsidered the petition for certiorari, which is granted but limited to question three as presented in the petition. The Chief Justice has not participated in the vote to withdraw the order of October 31, 2005 or in the instant reconsideration of the petition for certiorari."
The previous order granting certiorari also limited review to question three.
The Supreme Court did no disclose the reason for the recusal. However, the petitioner, LabCorp, is represented by Jonathan Saul Franklin of the Washington DC office of the law firm of Hogan & Hartson. He was, until recently, a partner of the new Chief Justice, John Roberts.
The Court of Appeals number is 03-1120. The Supreme Court number is 04-607. See also, Supreme Court docket.

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