Source: http://www.techlawjournal.com/alert/2003/10/14.asp
Timestamp: 2019-04-20 09:19:53+00:00

Document:
TLJ Daily E-Mail Alert No. 757, October 14, 2003.
October 14, 2003, 9:00 AM ET, Alert No. 757.
10/9. The Department of Justice's (DOJ) Antitrust Division submitted its evaluation to the Federal Communications Commission (FCC) recommending that the FCC approve Qwest's Section 271 application to provide in region interLATA services in the state of Arizona.
The evaluation states that competitive local exchange carrier (CLEC) entry in Arizona in the business market is 36.9 percent, and CLEC entry in the residential market is 11.6 percent.
Hewitt Pate, Assistant Attorney General in charge of the Antitrust Division, stated in a release that "Conditions in Arizona local telecommunications markets appear favorable to fostering competition ... Facilities-based competitors have made progress in penetrating both the business and residential markets, and the Department believes there are no longer any material obstacles to competition in Arizona created by Qwest."
The application still requires approval by the FCC. See also, Qwest release.
10/9. The Federal-State Joint Conference on Accounting Issues submitted to the Federal Communications Commission (FCC) a list of recommended changes to the FCC's accounting rules, and a request that the FCC issue a notice of proposed rulemaking (NPRM) for the purpose of adopting these recommended changes. See, FCC release, with attached recommendations.
FCC Commissioner Kevin Martin wrote a statement [2 pages in PDF] in which he expressed concern about some of the recommendations of the Joint Conference.
Commissioner Michael Copps wrote a statement [PDF] in which he said that the FCC "now must move swiftly to convert this Recommendation into a Notice of Proposed Rulemaking". He also wrote that the Joint Conference should now assess additional issues, which he recites.
The Joint Conference was formed in September of 2002 to provide a forum for a dialogue between the FCC and the states to ensure that regulatory accounting data and related information filed by carriers are adequate, truthful, and thorough. This proceeding is WC Docket 02-269.
10/8. Federal Reserve Board (FRB) Governor Susan Bies gave a speech titled "Comments on the Current State of the Economy". She spoke at Middle Tennessee State University in Murfreesboro, Tennessee. She offered her assessment of the rise and decline of tech sector equity markets.
Bies (at right) stated that "In the late 1990s, financial conditions were easy. Very narrow risk premiums in both debt and equity markets and lofty expectations about returns on the part of investors and borrowers greatly reduced the cost of external funds. A frenzy of capital-raising followed, led by telecommunication and Internet firms. Corporate debt and equity issuance soared -- adding almost $2 trillion in new debt and equity to the balance sheets of nonfinancial corporations from 1998 through 2000 alone, with a good portion of the money raised by risky firms in the junk bond, venture capital, and initial public offering (IPO) markets. Firms used the proceeds not only to fund investment, but also to finance acquisitions of other companies, stock repurchases, and operating expenses."
She continued that "The spectacular collapse of high-tech equity valuations in the spring of 2000, led by the same telecommunication and Internet firms, wreaked havoc with corporate credit quality in some sectors and began a prolonged retrenchment in financial markets. Subsequently, financial markets were buffeted with a barrage of terrorism, war, and corporate governance shocks that further eroded investor confidence and stoked uncertainty and pessimism."
"The consequent retreat from risk-taking led to a substantial markdown in asset values, with obvious negative consequences for portfolios. Between early 2000 and the end of 2002, more than $6 trillion of stock-market wealth evaporated, and more than $200 billion of corporate bonds went into default. Many of the telecommunication firms that did IPOs or issued junk bonds during the easy market conditions of the late 1990s went bankrupt. For other firms, debt burdens that had appeared manageable suddenly looked excessive. Investors and lenders rightly responded to these events by becoming more wary, and financial conditions accordingly became more restrictive", said Bies.
10/9. The California Court of Appeal (3) issued its opinion [42 pages in MS Word] in Sheyko v. Saenz, a challenge to the state of California's regulations regarding electronic fingerprinting of welfare recipients.
The California legislature created a program named Statewide Fingerprint Imaging System (SFIS) in order to reduce welfare fraud. The legislature required the California Department of Social Services (DSS) to promulgate regulations implementing the program.
Lyudmila Sheyko and others filed a complaint in California Superior Court (Sacramento County) challenging certain of the SFIS regulations. The trial court granted judgment to Sheyko as to certain regulations. Both Sheyko and Rita Saenz (as Director of the DSS) appealed.
The Court of Appeal upheld the DSS regulations in their entirety.
Sheyko challenged regulations on the basis that they were ineffective. The Court held that "It is for the Legislature to determine whether a particular welfare antifraud measure is or is not effective, therefore Sheyko's assertions that SFIS is ineffective should be addressed to the Legislature, not the judiciary."
Sheyko challenged regulations as an invasion of privacy. The Court held that "Sheyko�s underlying assertions that her privacy or religious freedoms are improperly impaired by SFIS lack merit."
It wrote that "Sheyko views fingerimaging as an invasion of privacy and personal dignity, and invokes the specter of 1984. But the Legislature could rationally find welfare recipients are no more stigmatized by fingerimaging than are driver�s license applicants, lawyers, accountants and many others."
The California Supreme Court has previously rejected a privacy challenge to fingerprinting for driver's licenses, because of the need to deter fraud. See, Perkey v. Department of Motor Vehicles, 42 Cal.3d 185 (1986).
This case is Lyudmila Sheyko. et al. v. Rita Saenz, C.A. No. C039132, an appeal from the Superior Court for Sacramento County, S.C. No. 00CS01130, Judge Ronald Robbie presiding.
Sen. Feingold summarized his bill in the Senate. "This bill addresses the provision of the USA PATRIOT Act that has caused perhaps the most concern among Members of Congress. Section 213 of the PATRIOT Act, sometimes referred to as the ``delayed notice search provision�� or the ``sneak and peek provision,�� authorizes the Government in limited circumstances to conduct a search without immediately serving a search warrant on the owner or occupant of the premises that have been searched." See, Congressional Record, October 2, 2003, at S12377-8.
The TLJ Daily E-Mail Alert was not published on Friday, October 10, or on Monday, October 13.
10/9. The Federal Communications Commission (FCC) announced the agenda [PDf] for its Thursday, October 16 meeting.
First, the FCC will consider a Report and Order regarding the allocation, band plan and service rules in the 71-76 GHz, 81-86 GHz and 92-95 GHz bands. This is WT Docket No. 02-146 and RM-10288.
Second, the FCC will consider an Order on Remand, Further Notice of Proposed Rulemaking, and Memorandum Opinion and Order regarding the universal service support mechanism for non-rural carriers. This item follows the July 31, 2001 opinion of the U.S. Court of Appeals (10thCir) in Qwest v. FCC, 258 F.3d 1191, which reversed and remanded the FCC's Ninth Order "because it does not provide sufficient reasoning or record evidence to support its reasonableness." See also, the FCC web page titled "Tenth Circuit Remand". This is CC Docket No. 96-45.
Third, the FCC will consider an Order to resolve issues raised in the Auction No. 52 Comment Public Notice related to the FCC's authority to auction Direct Broadcast Satellite (DBS) licenses and eligibility for the DBS licenses currently available. See also, the FCC web page titled "Auction 52: Direct Broadcast Satellite Service". This is AUC-03-52.
Fourth, the FCC will consider an Order regarding applications submitted by commercial television stations seeking extensions of the May 1, 2002, deadline for construction of digital television facilities.
Fifth, the FCC will consider a Report and Order regarding licensing, technical and competitive bidding rules for spectrum in the 1710-1755 MHz and 2110-2155 MHz bands, which is allocated for advanced wireless services (AWS). AWS, which is also known as Third Generation (3G) wireless services, is a digital, packet switched, internet protocol system. It is planned that it will carry voice, music and data. It is also planned that it will increase the efficiency of use of spectrum. It is intended to bring broadband internet access to portable devices. See also, the FCC's November 22, 2002 notice of proposed rulemaking (NPRM) [44 pages in PDF], and the FCC's 3G web page. This is WT Docket No. 02-353. The NPRM is FCC 02-305.
The meeting will be held in the FCC's Commission Meeting Room, 445 12th Street, SW, Room TW-C05. The meeting will also be webcast.
The Senate will meet at 9:30 AM. The agenda includes morning business, resumption of consideration of S 1689, the FY 2004 Emergency Supplemental Appropriations bill for Iraq and Afghanistan, and resumption of consideration of S 1053, the "Genetic Information Nondiscrimination Act of 2003".
The Supreme Court will hear oral argument in Verizon v. Law Offices of Curtis Trinko, No. 02-682. This is a case involving the application of Section 2 of the Sherman Antitrust Act, 15 U.S.C. � 2, in the context of telecommunications. See, TLJ story titled "Supreme Court Grants Certiorari in Verizon v. Trinko", March 10, 2003.
9:00 AM. The Department of Homeland Security (DHS) Science and Technology Directorate will host a seminar about the application process for the Support Anti-terrorism by Fostering Effective Technologies Act of 2002 (SAFETY Act). For more information, contact 202 282-8010. Location: J.W. Marriott, 1331 Pennsylvania Avenue, NW.
12:15 PM - 2:00 PM. The Forum on Technology & Innovation will host a briefing titled "International Challenges to Controlling Spam". The speakers will be Howard Beales (Director of the Federal Trade Commission's Bureau of Consumer Protection), Andrew Pinder (U.K. Prime Minister Tony Blair's e-Envoy), and Charles Curran (Assistant General Counsel at America Online). For more information, contact Bill Bates at 202 969-3395. Location: Room 106, Dirksen Building.
The House will meet at 2:00 PM for legislative business. It will consider several non-tech related items under suspension of the rules. Votes will be postponed until 6:30 PM. See, Republican Whip Notice.
9:30 AM. The Senate Judiciary Committee will hold a hearing on several pending judicial nominations, including Michael Fisher (to be a Judge of the U.S. Court of Appeals for the 3rd Circuit), Dale Fischer (to be Judge of the U.S. District Court for the Central District of California), and Gary Sharpe (Northern District of New York). See, notice. Location: Room 226, Dirksen Building. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242.
1:00 to 5:00 PM. The Internet Corporation for Assigned Names and Numbers (ICANN) Security and Stability Advisory Committee (SECSAC) will hold its second meeting regarding VeriSign's temporary changed to the way the COM and NET registries responded when presented with uninstantiated names. Location: Academy for Educational Development, Vista Room, 8th floor, 1825 Connecticut Ave, NW.
10:00 AM. The House Ways and Means Committee will hold a hearing titled "United States - China Economic Relations and China's Role in the Global Economy". See, notice. Location: Room 1100, Longworth Building.
12:30 PM. The Congressional Caucus on Intellectual Property Promotion and Piracy Prevention and former Commissioners of the U.S. Patent and Trademark Office (USPTO) will hold a press conference to urge the House leadership to schedule a vote on HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003", a bill that would, among other things, end the diversion of USPTO fees. Press contact: Lale Mamaux (Office of Rep. Wexlar) at 202 225- 3001 or lale.mamaux@mail.house.gov. Location: Room 505, Cannon Building.
10:00 AM. The House Ways and Means Committee will continue its hearing titled "United States -- China Economic Relations and China's Role in the Global Economy". See, notice. Location: Room 1100, Longworth Building.
Day one of a three day conference titled "Networked Economy Summit". See, event web site and agenda. Location: Hyatt Regency Reston, Reston, VA.
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Global Naps v. FCC, No. 02-1202. Judges Edwards, Garland and Williams will preside. Location: 333 Constitution Ave. NW.
Day two of a three day conference titled "Networked Economy Summit". See, event web site and agenda. Location: Hyatt Regency Reston, Reston, VA.
10/9. President Bush gave a speech in Manchester, New Hampshire. He addressed, among other topics, class action reform. He praised HR 1115, the bill sponsored by Rep. Bob Goodlatte (R-VA) and Rep. Rick Boucher (D-VA) bill named the "Class Action Fairness Act".
He stated that "Businesses are more likely to hire people if the health care for workers is affordable. We need to allow association health care plans, where small businesses can pool risk and gain the same bargaining power as big businesses. And in order to control health care costs, we need effective legal reform, medical liability reform at the federal level."
He continued that "Defensive medicine against frivolous lawsuits runs up the federal budgets, it increases the cost of Medicare and Medicaid and veteran health benefits. Medical liability reform is a national problem that requires a national solution."
He concluded that "Unfair lawsuits are also harming a lot of good and honest employers. There are too many large settlements that leave plaintiffs with a small sum and lawyers with a fortune. Class actions and mass tort suits that reach across state lines should be tried in a federal court so lawyers cannot shop around looking for a favorable judge. And most of the money in a judgment or settlement should go to those who have actually been harmed, not the lawyer."
The House, but not the Senate, has passed a bill that addresses some of the concerns expressed by President Bush. The House passed HR 1115, the "Class Action Fairness Acton", on June 12, 2003 by a vote of 253-170. This was a largely party line vote, although 32 Democrats joined Republicans in voting for the bill. See, Roll Call No. 272. See also, stories titled "Reps. Goodlatte and Boucher Re-Introduce Class Action Fairness Act" in TLJ Daily E-Mail Alert No. 619, March 10, 2003 and "House Passes Class Action Fairness Act" in TLJ Daily E-Mail Alert No. 680, June 13, 2003.
This bill amends 28 U.S.C. � 1332, regarding diversity of citizenship. It provides federal jurisdiction in certain class actions with a minimum total of aggregated claims where any member of a class of plaintiffs is a citizen of a state different from any defendant.
President Bush stated that "The House has passed a good bill. It is stuck in the Senate. Senators must understand no one has been healed by a frivolous lawsuit in America."
10/10. Joseph Hall was named Senior Policy Fellow in the Securities and Exchange Commission's (SEC) Office of General Counsel for a two year term beginning on October 20, 2003. He is currently a partner in the New York City office of the law firm Davis Polk & Wardwell. See, SEC release.

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