Source: http://www.techlawjournal.com/alert/2007/05/10.asp
Timestamp: 2019-04-20 13:08:47+00:00

Document:
TLJ Daily E-Mail Alert No. 1,579, May 10, 2007.
May 10, 2007, Alert No. 1,579.
5/9. The U.S. Court of Appeals (3rdCir) issued its opinion [29 pages in PDF] in Core Communications v. Verizon, a case regarding the proper procedure of adjudicating disputes regarding interconnection agreements between carriers. The Court of Appeals held that the state public utility commissions that approve these interconnection agreements "are given the first crack at interpreting and enforcing" these agreements.
Verizon Pennsylvania is an incumbent local exchange carrier (ILEC) in the state of Pennsylvania. Core Communications is a competitive local exchange carrier (CLEC).
The interconnection provisions of the Telecommunications Act of 1996 are codified at 47 U.S.C. § 251 and 47 U.S.C. § 252.
Subsection 251(a) provides that "Each telecommunications carrier has the duty ... to interconnect directly or indirectly with the facilities and equipment of other telecommunications carriers".
Moreover, subsection 251(c)(1) provides that "each incumbent local exchange carrier has ... The duty to negotiate in good faith in accordance with section 252 of this title the particular terms and conditions of agreements ..." In addition, "The requesting telecommunications carrier also has the duty to negotiate in good faith the terms and conditions of such agreements".
Subsection 252(a) provides that "Upon receiving a request for interconnection, services, or network elements pursuant to section 251 of this title, an incumbent local exchange carrier may negotiate and enter into a binding agreement with the requesting telecommunications carrier or carriers". Also, Subsection 252(b) provides that any "party to the negotiation may petition a State commission to arbitrate any open issues".
Subsection 252(i) provides that "A local exchange carrier shall make available any interconnection, service, or network element provided under an agreement approved under this section to which it is a party to any other requesting telecommunications carrier upon the same terms and conditions as those provided in the agreement."
Core entered into an interconnection agreement with Verizon (actually, its predecessor in interest, Bell Atlantic Pennsylvania) by opting into an existing interconnection agreement between MCI and Verizon (Bell Atlantic).
The Court of Appeals wrote that Core asserts that when it requested interconnection to various markets in Pennsylvania, "Verizon deliberately and unjustifiably refused to interconnect with Core at technically feasible points in a timely manner. Rather than using existing facilities with spare capacity to interconnect, Verizon cited its internal policy of requiring the construction of new, dedicated facilities to interconnect with Core. No technical or business justification was given explaining the need for this requirement. Core claims that Verizon intentionally took these steps in order to maintain its competitive advantage in Pennsylvania markets and to intimidate and financially harm Core."
Without first exhausting remedies before the Pennsylvania Public Utility Commission (PPUC), Core filed a complaint in U.S. District Court (EDPa) against Verizon. Count I alleged violation of 47 U.S.C. §§ 201 and 202. Count II alleged violation of 47 U.S.C. § 251. Count III alleged a material breach of an interconnection agreement. Count IV alleged intentional non-disclosure and fraudulent concealment under Pennsylvania common law.
The District Court dismissed all four counts of Core's complaint without prejudice. It held that interconnection related claims must first be brought in the relevant state PUC, before bringing an action in U.S. District Court.
The District Court relied upon the Federal Communications Commission's (FCC) 2000 ruling in In re Starpower Communications, LLC, for the principle that the complaining carrier must first go to the state PUC. The District Court relied upon the Supreme Court of the U.S.'s 1984 opinion in Chevron U.S.A., Inc. v. Natural Resources Defense Council for the appropriate degree of deference to accord to the FCC.
Core brought the present appeal.
The Court of Appeals, reviewed the statute and FCC rulings, applied Chevron deference, and concluded that "the most sensible harmonization of the Act's structure and the FCC's declarations is a solution under which the bodies that are responsible for overseeing the formation of interconnection agreements are given the first crack at interpreting and enforcing them."
It concluded that "we will affirm the judgment of the District Court dismissing Count III of Core’s complaint without prejudice, vacate the dismissal of the remaining counts, and remand for further proceedings consistent with this opinion."
This case is Core Communications, Inc. v. Verizon Pennsylvania, Inc., U.S. Court of Appeals for the 3rd Circuit, App. Ct. No. 06-2419, an appeal from the U.S. District Court for the Eastern District of Pennsylvania, D.C. No. 04-cv-04513, Judge Timothy Savage presiding. Judge Fisher wrote the opinion of the Court of Appeals, in which Judges Smith and Gustave Diamond joined.
5/9. The White House press office released a statement of President Bush. He said that "We will work aggressively to conclude the World Trade Organization's Doha Development Agenda negotiations and to secure congressional approval of the free trade agreements with Colombia, Panama, Peru, and South Korea."
He also said that "The United States unequivocally supports international investment in this country and is equally committed to securing fair, equitable, and nondiscriminatory treatment for U.S. investors abroad. Both inbound and outbound investment benefit our country by stimulating growth, creating jobs, enhancing productivity, and fostering competitiveness that allows our companies and their workers to prosper at home and in international markets."
Bush said that "open economies that empower individuals, generate economic opportunity and prosperity for all, and provide the foundation for a free society".
See also, second statement titled "Open Economies Policy Statement". Neither statement references intellectual property related trade issues.
On May 8, 2007, U.S. Trade Representative Susan Schwab gave a speech [14 pages in PDF] in Washington DC to the Business Council regarding trade and Doha negotiations.
She said that "President Bush has made it clear the United States is ready to do its part -- whether on market access or on trade-distorting subsidies." She added that "market access is the key to success".
She also said that "we have a perception problem. Demagogues and protectionists can take isolated points of data and selected anecdotes about job losses to stoke fear and anxiety. Three centuries ago Thomas Hobbes proclaimed life ``nasty, brutish and short.´´ Today, we have Lou Dobbs presenting life as unfair, isolationist, and doomed." She said that "The protectionists are wrong."
5/8. Federal Communications Commission (FCC) Chairman Kevin Martin gave a speech [PDF] at the National Cable & Telecommunications Association (NCTA) convention in Las Vegas, Nevada, on May 7, 2007.
He joked about recent criticism of him in the cable industry, and praised the cable industry's infrastructure investment, and expansion into broadband and voice services. He then discussed voice competition, video competition, a la carte, multicasting, the DTV transition, the set top box integration ban, and network neutrality regulation.
Martin (at right) said that "your entry into the phone market benefits consumers, and I will support regulatory action to promote that entry and the competition it enables."
He continued that "cable operators are not always the new entrants. So consistent with my commitment to fostering a competitive marketplace and consumer choice, I have and will continue to side with the new entrants trying to break into the market where you are the traditional incumbent. My push to streamline the franchise reform process for new entrants was not intended as an attack on cable. Rather, it was promoting new entry in the video market in the same manner as I supported your entry into the phone market."
He also said that he is in agreement with the cable industry on "net neutrality". He said that "Lots of people would like the Commission to impose regulation in this area. I have consistently resisted." He said that "regulation in this area would be premature", "network providers need to be able to recoup the costs for upgrading their infrastructure", and that net neutrality regulation could slow down broadband deployment and adoption.
Martin discussed the July 1, 2007, deadline of the set top box integration ban.
He also reiterated his support for a la carte regime for cable. And, he argued that there is no First Amendment violation in mandating an a la carte regime.
He then defended the FCC's multicasting rules. He said that "Broadcasters said they could not sustain a business based on advertiser-supported multicasted channels unless they knew the channels would be carried on the cable and satellite systems. Your industry opposed mandatory carriage, saying consumers should be able to pick and choose the channels they want, not have programming forced upon them. But if that is really your belief, then it should hold true whether we are talking about broadcast channels or your own cable programming channels. You can't have it both ways."
Martin concluded that "if you advocate subjecting broadcast channels to consumer choice then why shouldn't cable channels be similarly subject to free market choices as well."
Kyle McSlarrow (at left), head of the NCTA, responded in a speech on May 8. He said that "If one assumes that the video marketplace is one of intense competition, then the only sensible policy outcome is one where the government gets out of the way and let’s the free market flourish. I think that marketplace is competitive ... and every cable operator knows that they are in a competitive fire fight with satellite distributors and now telephone companies."
"So", said McSlarrow, "it is puzzling that Chairman Martin does not take the same approach to the video marketplace. I was struck by his discussion of mandated a la carte and mandated multicast carriage. There are many reasons why neither of those ideas benefits consumers."
He continued, "But just as a matter of logical consistency, think about what those ideas represent: A la carte is a form of government enforced unbundling of what is known as the expanded basic tier. Mandated multicast carriage produces exactly the opposite result. It forces the bundling of broadcast programming that apparently couldn't gain carriage in a free market."
"You can't have it both ways. You can’t insist that every channel must be sold separately, and then require that other programming must be added to the expanded basic tier", said McSlarrow.
5/9. The U.S. Court of Appeals (4thCir) issued its opinion [PDF] in Expert Business Systems v. BI4CE, a civil action brought under the Electronic Communications Privacy Act (ECPA), which is codified at 18 U.S.C. §§ 2510-2521, and the Computer Fraud and Abuse Act (CFAA), which is codified at 18 U.S.C. § 1030.
However, this appeal involves no significant ECPA or CFAA issues. The District Court ruled against the plaintiffs on summary judgment, and the Court of Appeals affirmed.
Expert Business Systems, Inc. (EBS) and BI4CE, Inc., are two small information technology businesses. They entered into an agreement to develop a web enabled version of EBS's proprietary software. The business relationship later deteriorated, and EBS filed a complaint against BI4CE in U.S. District Court (DMd) alleging violation of the ECPA and CFAA and various state law claims.
EBS alleged that BI4CE intercepted and disclosed two e-mail communications of EBS in violation of the ECPA, and remotely accessed EBS's computers without authorization, and caused damage, in violation of the CFAA. The Court of Appeals concluded that there were no genuine issues of material fact with respect to either federal claim. The evidence showed that a program was installed, at EBS's request, that enabled EBS to remotely access BI4CE's server, and not vice versa. It similarly found no interception of e-mail.
The Court of Appeals opinion does not state whether or not the plaintiffs added the federal ECPA and CFAA claims to what was essentially a state law commercial dispute in order to obtain federal jurisdiction over the state law claims. The tactic exists. Whatever the case, after ruling for BI4CE on the federal claims, the District Court declined to exercise jurisdiction over the remaining state law claims, which it dismissed.
EBS brought the present appeal. The Court of Appeals affirmed in full in an "unpublished per curiam opinion" of Judges Michael, Motz, and King.
This case is Expert Business Systems LLC and David Esau v. BI4CE, Inc. and Christopher Chodnicki, U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 06-1265, an appeal from the U.S. District Court for the District of Maryland, at Baltimore, D.C. No. 1:04-cv-00600-AMD, Judge Andre Davis presiding.
5/9. The Senate confirmed Debra Ann Livingston to be a Judge of the U.S. Court of Appeals for the 2nd Circuit by a vote of 90-0. See, Roll Call No. 158.
5/8. The Senate confirmed Frederick Kapala to be a Judge of the U.S. District Court for the Northern District of Illinois by a vote of 91-0. See, Roll Call No. 153.
The House will meet at 9:00 AM and recess immediately for the Former Members' Association annual meeting. It will meet again at 10:00 AM for legislative business. The House may consider HR 2082, the intelligence authorization bill, subject to a rule. See, House Majority Leader Hoyer's weekly calendar [PDF].
The Senate will meet at 10:00 AM. It will resume consideration of HR 1495, the "Water Resources Development Act of 2007".
8:00 AM - 5:30 PM. The Information Technology Association of America (ITAA) will host a conference titled "The New New Internet: IPv6 conference". See, notice. For more information, contact Trey Hodgkins at thodgkins at itaa dot org. Location: Hyatt Regency, Arlington, VA.
9:00 AM. The House Financial Services Committee's (HFSC) Subcommittee on Oversight and Investigations will hold a hearing: titled "Suspicious Activity and Currency Transaction Reports: Balancing Law Enforcement Utility and Regulatory Requirements". The witnesses will be Charles Frahm (Deputy Assistant Director, FBI Counterrorism Division), William Baity (Deputy Director of the Financial Crimes Enforcement Network), Steve Bartlett (Financial Services Roundtable), Megan Davis Hodge (Director, Anti-Money Laundering, RBC Centura Bank), Carolyn Mroz (P/CEO of the Bay-Vanguard Savings Bank), and Scott McClain (Winne Banta Hetherington Basralian & Kahn). See, notice. Location: Room 2128, Rayburn Building.
9:15 AM. The Information Technology and Innovation Foundation (ITIF) will host a briefing to release a report titled "Internet Radio and Copyright Royalties: Reforming a Broken System". The speakers will be Rob Atkinson and Daniel Castro of the ITIF. For more information, contact the ITIF at 202-449-1351 or at mail at itif dot org Location: Room 2226, Rayburn Building.
9:30 AM. The House Commerce Committee's (HCC) Subcommittee on Telecommunications and the Internet will hold a hearing titled "Digital Future of the United States: Part V: The Future of Video". The witnesses will be Thomas Rogers (P/CEO of TiVo), Chad Hurley (CEO of YouTube), Benjamin Pyne (Disney and ESPN Networks), Gina Lombardi (MediaFLO USA), Phil Rosenthal (Writers Guild of America West and the Screen Actors Guild), Blake Krikorian (Ch/CEO of Sling Media), Mark Cuban (Co-Founder of HDNet). Press contact: Jodi Seth or Carrie Annand at 202-225-5735. Location: Room 2123, Rayburn Building.
9:30 AM. The House Judiciary Committee (HJC) will hold a hearing titled "Oversight Hearing on the Department of Justice". The witness will be Attorney General Alberto Gonzales. See, notice. Location: Room 2141, Rayburn Building.
10:00 AM. The Senate Judiciary Committee (SJC) may hold a hearing titled "Judicial Nominations". This hearing pertains to the nominations of Leslie Southwick (to be a Judge of the U.S. Court of Appeals for the 5th Circuit), Janet Neff (U.S. District Court for the Western District of Michigan), and Liam O’Grady (U.S.D.C., Eastern District of Virginia). See, notice. Press contact: Tracy Schmaler (Leahy) at Tracy_Schmaler at judiciary dot senate dot gov or 202-224-2154. Location: Room 226, Dirksen Building.
10:00 AM. The House Homeland Security Committee's (HHSC) Subcommittee on Intelligence, Information Sharing and Terrorism Risk Assessment will hold a hearing titled "Fixing the Homeland Security Information Network: Finding the Way Forward For Better Information Sharing". See, notice. This hearing will not be webcast by the HHSC. For more information, contact Dena Graziano or Adam Comis at 202-225-9978. Location: Room 311, Canon Building.
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Furnace Brook v. Overstock.com, a patent infringement case, in which the District Court granted summary judgment of non-infringement of U.S. Patent No. 5,721,832, titled "Method and apparatus for an interactive computerized catalog system", to Overstock. This case is App. Ct. No. 2007-1064, an appeal from the U.S. District Court for the Southern District of New York. Location: Courtroom 203, 717 Madison Place, NW.
2:00 - 4:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will hold the second of a series of three meeting to prepare advice for the next meetings of the Organization for Economic Co-operation and Development Working Parties on the Information Economy (WPIE) and Communications and Infrastructure Services Policy (CISP). See, notice in the Federal Register, April 5, 2007, Vol. 72, No. 65, at Page 16868. Location: Room 2533a, Harry Truman Building, 2201 C St., NW.
? 2:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will hold the second of a series of three teleconferences to prepare advice for the next meeting of the International Telecommunication Union's Study Group 9 (Integrated broadband cable networks and television and sound transmission). See, notice in the Federal Register, April 5, 2007, Vol. 72, No. 65, at Page 16868.
2:30 PM. The House Commerce Committee will meet to mark up HR 964, the "Securely Protect Yourself Against Cyber Trespass Act" or "SPY ACT", and HR 948, the "Social Security Number Protection Act of 2007". See also, stories titled "House Subcommittee Approves SPY ACT" and "Summary of HR 964, the SPY ACT" in TLJ Daily E-Mail Alert No. 1,568, April 23, 2007.
Location: Room 2123, Rayburn Building.
2:30 PM. The Senate Homeland Security and Governmental Affairs Committee (SHSGAC) will hold a hearing titled "Violent Islamist Extremism: Government Efforts to Defeat It". Sen. Joe Lieberman (D-CT), the Chairman of the SHSGAC, has advocated disrupting terrorist web sites. See, story titled "Sen. Lieberman Advocates Disrupting Terrorist Web Sites" in TLJ Daily E-Mail Alert No. 1,575, May 4, 2007. See, notice. Location: Room 342, Dirksen Building.
3:00 PM. The Senate Banking Committee (SBC) will hold a hearing on numerous nominees, including Mario Mancuso (to Under Secretary of Commerce for Export Administration). Location: Room 538, Dirksen Building.
6:00 - 8:30 PM. The Federal Communications Bar Association's (FCBA) Enforcement Committee will host a continuing legal education (CLE) seminar titled "What to do When the FCC Comes a' Calling: A Practitioner's Guide to FCC Enforcement". The price to attend ranges from $50 to $125. See, registration form [PDF]. Location: Arnold & Porter, 10th floor, 555 12th Street, NW.
The House will meet at 10:00 AM for legislative business. The House may consider HR 1684, the "Department of Homeland Security Authorization Act for Fiscal Year 2008", subject to a rule, and HR 2082, the intelligence authorization bill, subject to a rule. See, House Majority Leader Hoyer's weekly calendar [PDF].
The Information Technology Association of America (ITAA) will host a seminar titled "Overview of Final Section 409A Rules". See, notice.
Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [53 pages in PDF] in its proceeding titled "In the Matter of Assessment and Collection of Regulatory Fees for Fiscal Year 2007". This NPRM is FCC 07-55 in MD Docket No. 07-81.
11:00 AM. The U.S. Chamber of Commerce will host an event titled "Intellectual Property Enforcement: An Update from the Administration". The speakers will be Carlos Gutierrez (Secretary of Commerce) and Alberto Gonzales (Attorney General). For more information, contact Katie Wilson at 202-463-5500 or email ncfevents at uschamber dot com. See, notice and registration page. Location: U.S. Chamber, 1615 H St., NW.
TIME? The Federal Communications Commission (FCC) will hold a mock auction for Auction 71, the broadband PCS spectrum auction to be held on May 16, 2007. See, DA 07-30 [69 pages in PDF].
8:30 AM - 3:00 PM. The American Enterprise Institute (AEI) will host an event titled "The Role of Competition Analysis in Regulatory Decisions". See, notice. Location: AEI, 12th floor, 1150 17th St., NW.
8:30 AM - 3:00 PM. The National Institute of Standards and Technology (NIST) Advanced Technology Program Advisory Committee will hold a partially closed meeting. See, notice in the Federal Register, April 13, 2007, Vol. 72, No. 71, at Page 18632. Location: NIST, Administration Building, Employees' Lounge, Gaithersburg, MD.
10:00 AM - 12:00 NOON. The House Science Committee's (HSC) Subcommittee on Research & Science Education will hold a hearing titled "Federal STEM Education Programs: Educators' Perspectives". The witnesses will be Linda Froschauer (National Science Teachers Association), Michael Lach (Chicago Public Schools), George Nelson (Western Washington University), Van Reiner (Maryland Science Center), and Iris Weiss (Horizon Research, Inc.). Location: Room 2318, Rayburn Building.
The Federal Communications Commission (FCC) will begin Auction 71, the broadband PCS spectrum auction. See, DA 07-30 [69 pages in PDF].
10:00 AM. The Senate Judiciary Committee (SJC) may hold a hearing titled "Rogue Online Pharmacies: The Growing Problem of Internet Drug Trafficking". The witnesses will be Francine Haight (founder of Ryan's Cause), Joseph Rannazzisi (Office of Diversion Control, Drug Enforcement Administration), Joseph Califano (National Center on Addiction and Substance Abuse at Columbia University), Philip Heymann (Harvard Law School), and Thomas McClellan (Treatment Research Institute). Press contact: Tracy Schmaler (Leahy) at Tracy_Schmaler at judiciary dot senate dot gov or 202-224-2154. Location: Room 226, Dirksen Building.
10:00 AM. The Senate Finance Committee (SFC) will hold a hearing titled "U.S. Preference Programs: How well do they work?". The witnesses will include Meredith Broadbent (Assistant U.S. Trade Representative for Industry, Market Access and Telecommunications). See, notice. Location: Room 215, Dirksen Building.
12:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch to elect Co-Chairs and plan. Send nominations and self-nominations to Natalie Roisman at nroisman at akingump dot com and Chris Fedeli chrisfedeli at dwt dot com by May 9. Location: Davis Wright Tremaine, 1919 Pennsylvania Ave., 2nd Floor.
3:15 - 5:00 PM. The American Enterprise Institute (AEI) will host a book forum on the book "Antitrust Consent Decrees in Theory and Practice" by Richard Epstein (University of Chicago law school). The book examines the 1982 consent decree that broke up the Bell system, the 1994 Microsoft consent decree, and the 2002 Microsoft final judgment. The speakers will be Epstein, Douglas Melamed (Wilmer Hale) and Michael Greve (AEI). See, notice. Location: AEI, 12th floor, 1150 17th St., NW.
6:00 - 8:15 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Practice Committee will host a continuing legal education (CLE) seminar titled "Regulating for Innovation". See, registration form [PDF]. The price to attend ranges from $50-$125. The deadline to register is 5:00 PM on May 14. Location: Skadden Arps, 700 14th St., NW.
10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Media Violence". See, notice. Location: Room 253, Russell Building.
2:00 - 4:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will hold the third of a series of three meeting to prepare advice for the next meetings of the Organization for Economic Co-operation and Development Working Parties on the Information Economy (WPIE) and Communications and Infrastructure Services Policy (CISP). See, notice in the Federal Register, April 5, 2007, Vol. 72, No. 65, at Page 16868. Location: Room 2533a, Harry Truman Building, 2201 C St., NW.
? 2:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will hold the third of a series of three teleconferences to prepare advice for the next meeting of the International Telecommunication Union's Study Group 9 (Integrated broadband cable networks and television and sound transmission). See, notice in the Federal Register, April 5, 2007, Vol. 72, No. 65, at Page 16868.
2:00 PM. The House Commerce Committee's (HCC) Subcommittee on Telecommunications and the Internet will hold a hearing on a discussion draft of a yet to be introduced bill that addresses broadband mapping and data collection. Location: Room 2322, Rayburn Building.
6:00 - 8:00 PM. The law firm of Tobin O'Connor and Alteritech will host a seminar titled "Technology for Law Firms: Electronic Document Management". See, notice. RSVP by May 7, 2007 to RSVP at alteritech dot com. The event is open to attorneys. Location: Maggiano's Little Italy, 5333 Wisconsin Ave., NW.
Deadline to submit comments to the Copyright Royalty Board in response to its proposed rules setting certain royalty rates. See, notice in the Federal Register, April 17, 2007, Vol. 72, No. 73, at Pages 19138-19144.

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