Source: http://techlawjournal.com/home/newsbriefs/2007/08f.asp
Timestamp: 2019-04-22 08:20:39+00:00

Document:
TLJ News from August 26-31, 2007.
8/31. Federal Reserve Board (FRB) Governor Ben Bernanke gave a speech in Jackson Hole, Wyoming, titled "Housing, Housing Finance, and Monetary Policy" in which he touched on the role of information technology in housing finance. He said that "the new mortgage market came to look more like a textbook financial market, with fewer institutional ``frictions´´ to impede trading and pricing of event-contingent securities. Securitization and the development of deep and liquid derivatives markets eased the spreading and trading of risk. New types of mortgage products were created. Recent developments notwithstanding, mortgages became more liquid instruments, for both lenders and borrowers. Technological advances facilitated these changes; for example, computerization and innovations such as credit scores reduced the costs of making loans and led to a "commoditization" of mortgages. Access to mortgage credit also widened".
8/30. The Department of Justice's (DOJ) Antitrust Division and some state Attorneys General filed a pleading titled "Review of the Final Judgments by the United States and New York Group" with the U.S. District Court (DC) in U.S. v. Microsoft.
The DOJ and several state AGs stated that the purpose of the final judgments was to "eliminate Microsoft's illegal practices, to prevent recurrence of the same or similar practices and to restore the competitive threat that middleware products posed prior to Microsoft's unlawful conduct", and that "the Final Judgments have achieved these goals".
They added that "the Final Judgments have safeguarded the ability of software developers to develop, distribute, and promote competing middleware products".
Thomas Barnett (at left), the Assistant Attorney General in charge of the Antitrust Division, stated in a release that "The Antitrust Division has made enforcement of the final judgments an important priority and will continue to vigorously enforce the antitrust laws in computer software markets".
The DOJ's filing elaborated that "Since the entry of the Final Judgments, there have been a number of developments in the competitive landscape relating to middleware and to PC operating systems generally that suggest that the Final Judgments are accomplishing their stated goal of fostering competitive conditions among middleware products, unimpeded by anticompetitive exclusionary obstacles erected by Microsoft."
It continued that "Microsoft's Internet Explorer web browser faces renewed competition, primarily from Firefox but also from a range of other products including Opera and Apple's Safari browser. All of these competing browsers are cross-platform and therefore allow applications delivered over the Internet, either directly via the browser or as browser ``plugins,´´ to work on multiple operating systems."
The DOJ filed its action against Microsoft in 1998. It is D.C. No. 98-98-1232. There is also a parallel action brought by numerous states. It is D.C. No. 98-1233.
Some, but not all, of the states that are a party to the states' antitrust action against Microsoft joined in the DOJ's report.
The state of California and several other states filed a pleading [21 pages in PDF] in which they argued that "Microsoft's market power remains undiminished and that key provisions of the Final Judgment -- those relating to middleware -- have had little or no competitively significant impact."
They added that "The other product of principal focus at the liability trial was web browsers. Largely due to the success of Mozilla's Firefox web browser, Microsoft’s usage share has slipped from 95% in 2002 to 85% in 2006 -- still well above monopoly levels."
Microsoft submitted a pleading [12 pages in PDF] titled "Microsoft's Report Concerning Final Judgments" that responds to the California group of state AGs.
Microsoft countered that diminishing Microsoft's market share "was not the objective of the Final Judgments and should not be the standard by which the effectiveness of the Final Judgments is assessed."
Microsoft elaborated that it "did not achieve its position in the PC operating systems market unlawfully; rather, the Court found that Microsoft maintained that position by specific anticompetitive means. Having prohibited Microsoft from further employing those or similar means, and having created mechanisms to facilitate competition with Microsoft, the Final Judgments created an environment in which market forces can determine the relative success and thus the market shares of participants. Measured by that standard, the Final Judgments have been a success."
See also, Microsoft's exhibit [44 pages in PDF] and exhibit [45 pages in PDF].
Most of the provisions of the final judgments in these actions expire in November of this year. Although, the protocol licensing provisions of the final judgments have been extended through November of 2009.
The U.S. District Court, Judge Colleen Kotelly presiding, is scheduled to hold a status conference on September 11, 2007.
8/30. The Federal Communications Commission (FCC) fined three wireless carriers for not meeting the FCC's handset location identification requirements. The FCC mandated that 95% of subscribers' handsets be location capable by December 31, 2005.
The Notice of Apparent Liability for Forfeiture (NALF) [10 pages in PDF] affecting Sprint Nextel fines it $1,325,000. The NALF states that 81.3 percent of Sprint Nextel's subscribers' handsets were location capable at the end of 2005, and that Nextel Partners' rate was lower.
The NALF [PDF] affecting Alltel states that it achieved a location tracking rate of 84 percent. The NALF fines it $1,000,000. The NALF [8 pages in PDF] affecting US Cellular fines it $500,000.
See also, FCC release [PDF], and statement [PDF] by FCC Chairman Kevin Martin. These FCC documents emphasize to public safety uses of wireless location information.
Location determination capabilities in communications and information technology devices also promote other FCC goals, including facilitating location based advertising, location based social networking, aggregation and incorporation of location data into electronic databases, and surveillance.
On May 31, 2007, the FCC concluded that location obligations also extend to interconnected voice over internet protocol (VOIP) services. That item also sets standards for location accuracy. See, story titled "FCC Extends E911 Location Tracking Rules to Interconnected VOIP" in TLJ Daily E-Mail Alert No. 1,589, May 31, 2007.
8/30. The U.S. Court of Appeals (7thCir) issued its opinion in e360 Insight v. Spamhaus Project, affirming the entry of default against Spamhaus, but vacating the $11,715,000 judgment and injunction against Spamhaus.
While this is an action involving various tort theories for wrongful listing by a spam blacklister of an e-mail marketing company, the issues in this case all pertain to civil procedure -- service of process, entry of default, remedies following default, and setting aside of default judgments.
Spamhaus Project is a United Kingdom company that publishes a list of internet protocol (IP) addresses of spammers that internet service providers (ISPs) can use as part of their efforts to block spam e-mail. Spamhaus blacklisted e360 Insight, LLC, an e-mail marketing company based in the state of Illinois.
e360 filed a complaint [PDF] in state court in Illinois against Spamhaus alleging tortious interference with contractual relations, tortious interference with prospective economic advantage, defamation per se and defamation quod. e360 sought compensatory and punitive damages, and an injunctive requiring Spamhaus to remove e360 from its blacklist. Spamhaus removed the action to the U.S. District Court (NDIll). Spamhaus filed an answer [PDF].
However, Spamhaus then withdrew its answer, and its counsel withdrew from representation of it. e360 then filed a motion [PDF] for default judgment and permanent injunction. The District Court granted the motion. e360 then obtained a judgment [PDF] in the amount of $11,715,000, plus costs, and a permanent injunction.
Spamhaus then returned to court with new counsel and sought to set aside the judgment, pursuant to Rule 60, Federal Rules of Civil Procedure. The District Court denied the motion.
Spamhaus brought the present appeal. See, Spamhaus's brief [PDF] and e360's brief [PDF].
The Court of Appeals affirmed the District Court's entry of the default judgment. However, it vacated the award of damages and injunctive relief and remanded to the District Court for further proceedings. It held that the District Court failed to undertake an inquiry into the proof of damages and the necessity of injunctive relief and issued an injunction that is overbroad.
e360's wrote in a May 20, 2007, release that "E360's position is that Spamhaus.org is a fanatical, vigilante organization operating in the United States with blatant disregard for U.S. law. In addition, E360 has proven Spamhaus routinely exposes their customers and volunteers to extreme legal risk by continuing to engage in improper blacklisting, defamation, extortion and blackmail in the name of fighting spam."
See also, e360 web page with hyperlinks to pleadings, and e360 web page with hyperlinks to other releases regarding this litigation.
This case is e360 Insight LLC v. Spamhaus Project, U.S. Court of Appeals for the 7th Circuit, App. Ct. Nos. 06-3779 and 06-4169, appeals from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 06 C 3958, Judge Charles Kocoras presiding. Judge Ripple wrote the opinion of the Court of Appeals, in which Judges Kane and Evans joined.
8/30. The Senate Judiciary Committee (SJC) announced in the agenda for its executive business meeting to be held on Thursday, September 6, 2007, that it may again attempt to mark up S 1845 [LOC | WW], an untitled bill that would limit communications between the staffs of the White House and the Department of Justice (DOJ).
This bill, if enacted by the Congress, not vetoed by the President, and not held unconstitutional by the federal judiciary, would prevent White House staff from communicating with employees of the DOJ regarding any "ongoing investigation conducted" by the DOJ.
The bill does nothing to limit communications between Senators, Representatives, or Congressional staff and DOJ staff regarding ongoing investigations of the DOJ.
The bill would provide exceptions for communications between the President, Vice President, Counsel to the President, or Counselor to the President , and the Attorney General, Deputy Attorney General, or Associate Attorney General. The bill would also provide exceptions for communications where both parties are exempted by designation. This would apply to persons on the White House staff designated by the President, and persons employed by the DOJ designated by the Attorney General, provided that the President and Attorney General provide a written "explanation of the necessity of that designation" to the Senate and House Judiciary Committees.
The bill provides that both parties to the communication must be exempted. Thus, the President could not communicate with most officers of the DOJ regarding ongoing investigations without first giving the requisite notice to Congressional Committees.
The bill is silent regarding the codification of these provisions. It contains nothing regarding administrative enforcement, who can bring an action for its violation, and what remedies are available. The bill is silent as to whether the notices of designations would be made public, or be subject to production under the federal Freedom of Information Act (FOIA) request.
The Constitution provides that "executive Power shall be vested in a President", who "shall take Care that the Laws be faithfully executed". This bill may constitute an attempt to statutorily limit the exercise of a power by the executive that the Constitution has conferred upon the executive.
Sen. Sheldon Whitehouse (D-RI) introduced this bill on July 23, 2007. The only cosponsor is Sen. Patrick Leahy (D-VT). Both are members of the SJC, which has jurisdiction over the bill.
Sen. Whitehouse stated in an August 27, 2007, release regarding the resignation of Alberto Gonzales that "a great deal of work remains to be done to restore Americans’ confidence in this great Department, to restore its traditions and spirit, and to restore its ability to fairly and dispassionately enforce the law."
This bill was also on the agenda for the SJC's business meeting of Thursday, August 2, 2007.
8/30. The Federal Communications Commission (FCC) published a notice in the Federal Register that announces, describes, and sets comments deadlines for the Further Notice of Proposed Rulemaking (FNPRM) portion of its Report and Order (R&O) and FNRPM regarding the roaming obligations of CRMS providers. The FNPRM asks whether the FCC should extend roaming obligations to broadband data services. Initial comments are due by October 29, 2007; reply comments are due by November 28, 2007. The FCC adopted this item on August 7, 2007, and released the text on August 16, 2007. It is FCC 07-143 in WT Docket No. 05-265. See, Federal Register, August 30, 2007, Vol. 72, No. 168, at Pages 50085-50095. See also, story titled "FCC Adopts CMRS Roaming Order and NPRM" in TLJ Daily E-Mail Alert No. 1,623, August 15, 2007. The FCC also published a separate notice in the Federal Register that announces, describes, and sets the effective date (October 29, 2007) for the R&O portion of this item, in which the FCC determined that CMRS carriers have roaming obligations as to Title II services. See, Federal Register, August 30, 2007, Vol. 72, No. 168, at Pages 50064-50074.
8/29. The U.S. District Court (DC) issued its opinion [9 pages in PDF] in Nextel Spectrum Acquisition Corporation v. Hispanic Information and Telecommunications Network, a contract dispute concerning spectrum usage rights in unused spectrum in the 2.5 GHz band. The District Court dismissed Nextel's complaint. This is also a victory for Clearwire, although it is not a party to this case. See, full story.
8/29. The Federal Communications Commission (FCC) released a Report and Order [46 pages in PDF] regarding its waste, fraud and abuse plagued e-rate tax and subsidy program, and other universal service programs. In this item the FCC promises to "strengthen oversight".
This item addresses enforcement of tax collection from telecommunications carriers and voice over internet protocol service providers.
First, it amends FCC rules to increase penalties for late payments and late filing.
Second, this item amends FCC rules to increase the record keeping burdens on taxed entities, as well as their contractors and consultants.
It adds the following requirement: "Any entity required to contribute to the federal universal service support mechanisms shall retain, for at least five years from the date of the contribution, all records that may be required to demonstrate to auditors that the contributions made were in compliance with the Commission’s universal service rules. These records shall include without limitation the following: financial statements and supporting documentation; accounting records; historical customer records; general ledgers; and any other relevant documentation. This document retention requirement also applies to any contractor or consultant working on behalf of the contributor."
This item also addresses subsidy fraud. First, it amends FCC rules to extend the debarment rules, which previously only applied to the e-rate program, to also apply to high cost, low income, and rural healthcare programs.
This item also amends FCC rules to increase the record keeping requirements of subsidized entities. For example, for the high cost program, it provides that "All eligible telecommunications carriers shall retain all records required to demonstrate to auditors that the support received was consistent with the universal service high-cost program rules."
This item retains the requirement that schools and libraries and rural health care providers retain for five years their records evidencing that the funding they received was proper. It adds that this requirement extends to services providers, both with respect to schools and libraries and rural health care providers.
This item also states that "there is nearly 100 percent connectivity for public schools", and that "97 percent of the public schools with Internet access used broadband connections to access the Internet".
None of the five Commissioners wrote statements for this item.
This item is FCC 07-150 in WC Docket No. 05-195, CC Docket No. 96-45, CC Docket No. 02-6, WC Docket No. 02-60, WC Docket No. 03-109, and CC Docket No. 97-21.
8/29. Sen. Mark Pryor (D-AR) chaired a field hearing of the Senate Commerce Committee (SCC) in Little Rock, Arkansas, titled "State of Broadband in Arkansas". Federal Communications Commission (FCC) Commissioners Michael Copps and Jonathan Adelstein testified. See, Copps' prepared testimony [3 pages in PDF] and Adelstein's prepared testimony [8 pages in PDF].
Copps wrote that "we need a Universal Service Fund that has broadband as its core mission". He said that "we need to embrace all kinds of solutions", and that this "might include tax incentives, more Rural Utilities Service loans".
Adelstein wrote that "We need to make broadband the dial-tone of the 21st Century."
He also discussed policy areas outside of the authority of the FCC. He advocated "providing adequate funding for Rural Utilities Service broadband loans and grants, and establishing new grant programs supporting public-private partnerships that can identify strategies to spur deployment; ensuring RUS properly targets those funds; providing tax incentives for companies that invest in broadband to underserved areas; devising better depreciation rules for capital investments in targeted telecommunications services; investing in basic science research and development to spur further innovation in telecommunications technology; and improving math and science education so that we have the human resources to fuel continued growth, innovation and usage of advanced telecommunications services."
He also argued for "a comprehensive broadband communications deployment plan". He added that this includes "a strategy to prevent outsourcing of jobs overseas".
He again advocated network neutrality mandates. "We must also work to preserve the open and neutral character that has been the hallmark of the Internet".
Also, he discussed the upcoming 700 MHz auction, unlicensed spectrum, and the 3650 MHz band, and the 70/80/90 GHz band.
8/29. Jocelyne Gray was named the Department of Homeland Security's (DHS) White House Liaison. See, DHS release.
8/29. The National Archives and Records Administration (NARA) published a notice in the Federal Register that announces the renewal of its Advisory Committee on Electronic Records Archives (ACERA). See, Federal Register, August 28, 2007, Vol. 72, No. 166, at Page 49319.
8/29. The Center for Public Integrity (CPI) issued a release regarding the District Court's Memorandum Opinion [18 pages in PDF] in Center for Public Integrity v. FCC. The U.S. District Court (DC) held on August 27, 2007, that the contents of Forms 477, submitted to the Federal Communications Commission (FCC), are exempt from production by the FCC in response to a request made pursuant to the Freedom of Information Act (FOIA), which is codified at 5 U.S.C. § 552. Peter Smith, the CPI's legal counsel, stated in the release that the CPI "is considering its legal options, including an appeal or a motion for Judge Huvelle to reconsider her decision". See also, story titled "District Court Grants Summary Judgment to FCC in Broadband Data FOIA Case" in TLJ Daily E-Mail Alert No. 1,629, August 28, 2007.
8/29. The Federal Trade Commission (FTC) approved an application to appoint a compliance officer, Chirag Asaravala, in its administrative proceeding titled "In the Matter of Rambus, Inc." and numbered FTC Docket No. 9302. See, FTC release. On August 2, 2006, the FTC released its opinion [120 pages in PDF] which concluded that Rambus unlawfully monopolized the markets for four computer memory technologies that have been incorporated into industry standards for dynamic random access memory (DRAM) chips. See also, story titled "FTC Holds That Rambus Unlawfully Monopolized Markets" in TLJ Daily E-Mail Alert No. 1,427, August 8, 2006, and story titled "FTC Files Administrative Complaint Against Rambus" in TLJ Daily E-Mail Alert No. 455, June 20, 2002.
8/28. The Department of Homeland Security (DHS) announced the selection of numerous new members of its Homeland Security Advisory Council (HSAC), and the HSAC's State and Local Officials Senior Advisory Committee, Private Sector Senior Advisory Committee, Emergency Response Senior Advisory Committee, and Secure Borders and Open Doors Advisory Committee. The DHS's release lists these new members.
8/27. The U.S. District Court (DC) issued a Memorandum Opinion [18 pages in PDF] in Center for Public Integrity v. FCC, a case regarding whether the contents of Forms 477, submitted to the Federal Communications Commission (FCC), must be produced by the FCC in response to a request made pursuant to the Freedom of Information Act (FOIA), which is codified at 5 U.S.C. § 552. The District Court held that most of the information sought by the Center for Public Integrity (CPI) is exempt. See, full story.
8/27. Attorney General Alberto Gonzales (at right) will resign effective September 17, 2007.
Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), and a frequent critic of Gonzales, stated in a release that "Under this Attorney General and this President, the Department of Justice suffered a severe crisis of leadership that allowed our justice system to be corrupted by political influence. It is a shame, and it is the Justice Department, the American people and the dedicated professionals of our law enforcement community who have suffered most from it."
Sen. Orrin Hatch (R-UT), the ranking Republican on the SJC, stated in a release that "Alberto Gonzales has been the President’s strong right arm in fighting terrorists using the tools of law enforcement, and he helped successfully protect the American homeland during his tenure. Beyond that, he has overseen the Department of Justice’s efforts to protect children from Internet predators, to combat human trafficking, and to prevent the spread of meth in our communities."
Sen. Hatch added that "I hope that history will remember Attorney General Gonzales for his honorable service to his country, rather than for the absurd political theater to which some critics have subjected him."
Solicitor General Paul Clement will become the acting Attorney General in the event that the Senate has not confirmed a replacement. The position of Deputy Attorney General (DAG) is vacant; Craig Moford is acting DAG.
8/27. Deputy U.S. Trade Representative Karan Bhatia will leave the Office of the U.S. Trade Representative in October. See, OUSTR release.
8/27. Thomas Collamore was named SVP for Communications and Strategy and Counselor to the President of the U.S. Chamber of Commerce. He previously worked for former Sen. Fred Thompson (R-TN). See, U.S. Chamber release.
8/27. Acer announced in a release that it has entered into a definitive agreement to acquire Gateway. The deal is subject to regulatory approvals, including U.S. antitrust merger review under the Hart Scott Rodino Act, and U.S. foreign investment review under the Exon Florio provision.
Go to News from August 21-25, 2007.

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