Source: http://www.techlawjournal.com/alert/2003/09/08.asp
Timestamp: 2019-04-18 10:22:09+00:00

Document:
TLJ Daily E-Mail Alert No. 734, September 8, 2003.
September 8, 2003, 9:00 AM ET, Alert No. 734.
9/4. Incumbent local exchanged carriers (ILECs) filed several petitions for review of the Federal Communications Commission's (FCC) triennial review order (TRO) with the U.S. Court of Appeals (DCCir) on September 3 and 4, 2003.
Petitions for Review. Qwest Communications filed a petition for review (Appeals Court No. 03-1266) that states that Qwest "hereby petitions this Court for review of an order of the Federal Communications Commission (``FCC´´) that purports to create new unbundling rules to replace those vacated by this Court in United States Telecom Association v. FCC, 290 F.3d 415 (D.C.Cir. 2002), cert denied, 123 S.Ct. 1571 (2003)".
The U.S. Telecom Association (USTA) and SBC Communications also filed a petition for review (Appeals Court No. 03-1263) of the FCC's TRO. Qwest, SBC and the USTA are represented by Michael Kellogg of the law firm of Kellogg Huber.
Verizon Telephone Companies also filed a petition for review (Appeals Court No. 03-1264) of the FCC's TRO. It is represented by William Barr, of Verizon.
The USTA, a group that represents the interests of ILECs, stated in a release that it seeks "to stay the specific portions of the recently released Triennial Review Order that impose unbundling requirements for elements of traditional narrowband telephone networks". USTA P/CEO Walter McCormick stated that the TRO "blatantly ignores the dynamics of the rapidly evolving, highly competitive communications marketplace and should not be implemented without first being reviewed by the courts."
On September 2, the FCC published two notices in the Federal Register. First, the FCC published a notice that recites and describes the FCC's new rules regarding the unbundling requirements of incumbent local exchange carriers (ILECs). See, Federal Register: September 2, 2003, Vol. 68, No. 169, at Pages 52275 - 52306.
Second, the FCC published a notice that summarizes the portion of the triennial review order that contains a notice of proposed rulemaking (NPRM) regarding modifications to the FCC's rules implementing 47 U.S.C. § 252(i), which requires local exchange carriers (LECs) to make available to other telecommunications carriers interconnection agreements approved under Section 252.
Petitions for Writ of Mandamus. ILECs have also filed petitions for writ of mandamus with the U.S. Court of Appeals seeking a stay of parts of the FCC's TRO. See, story titled "ILECs File Petitions for Writ of Mandamus Challenging Triennial Review Order" in TLJ Daily E-Mail Alert No. 730, September 2, 2003.
These petitions assert that the FCC's TRO flouts the Court or Appeals opinion overturning the FCC's previous unbundling order. The Supreme Court vacated the FCC's first unbundling order in AT&T v. Iowa Utilities Board, 525 U.S. 366 (1999). The FCC then promulgated another unbundling order. But, the U.S. Court of Appeals (DCCir) vacated this order in USTA v. FCC, 290 F.3d 415 (2002). And, the Supreme Court denied certiorari. The just released TRO contains the FCC third unbundling order.
9/8. NeuStar, the contractual manager of the .us top level domain, has activated the directory for the kids.us second level domain. See, NeuStar's www.kids.us.
The creation of this second level domain was required by the "Dot Kids Implementation and Efficiency Act of 2002", HR 3833 (107th), which was enacted into law as Public Law 107-317. The bill was sponsored by Rep. John Shimkus (R-IL), Rep. Ed Markey (D-MA), and others.
The bill requires that the National Telecommunications and Information Administration (NTIA) "shall require the registry selected to operate and maintain the United States country code Internet domain to establish, operate, and maintain a second-level domain within the United States country code domain that provides access only to material that is suitable for minors and not harmful to minors ..."
That is, this new second level domain is available for voluntary use. Nothing requires any content provider to place content in web sites that use this second level domain. The goal of the bill is to create a child friendly, on-line safe zone on the web. However, if this goal is to be achieved, content providers must voluntarily place content in it.
On September 5, Rep. Shimkus spoke in the House about this new second level domain. He stated that "last year we passed on this floor the ``kids.us´´ site. President Bush signed this bill into law. It is a safe Internet site for kids. Now I call upon corporate America, nonprofits and governmental entities to put information on the kids.us site. I also call upon all parents to demand that these entities do so. The World Wide Web is an amazing, but dangerous, place for kids. With the arrival of kids.us, it has now become safer." See, Congressional Record, September 5, 2003, at page H7953.
Shimkus and Markey first introduced a bill, HR 2417, that would have required a "top-level, International domain", but later settled for a second level domain within the .us country code domain. See, stories titled "Reps. Shimkus and Markey Seek a .kids Domain" in TLJ Daily E-Mail Alert No. 234, July 25, 2001; "House Subcommittee Holds Hearing on Kids Domain" in TLJ Daily E-Mail Alert No. 300, November 2, 2001; "House Passes Dot Kids Domain Bill" in TLJ Daily E-Mail Alert No. 436, May 22, 2002; and "Bush Signs Dot Kids Bill" in TLJ Daily E-Mail Alert No. 561, December 5, 2003.
9/3. The U.S. Court of Appeals (2ndCir) heard oral argument in Swedenburg v. Kelly. The three judge panel, comprised of Judges John Newman, Richard Wesley, and Sonia Sotomayor, did not indicate how it will rule, or when it might issue its opinion.
In this case, small wineries and wine consumers challenge the constitutionality of a New York state liquor control law, which prohibits out of state wineries from selling directly to New York residents.
This state statute at issue is not directed solely at internet sales. However, it has the effect of restricting internet sales.
The plaintiffs argued in their appeal brief that "These regulatory constraints on interstate commerce occur at a time when technology, particularly the Internet, is enabling like never before highly personalized transactions between producers and consumers and reducing the need for a middle-man ... As a recent working paper for the U.S. Federal Trade Commission found, ``legalized direct shipping offers consumers access to hundreds of wineries and retailers across the nation, rather than the limited number that a typical consumer would likely seek out and visit in the course of shopping offline.´´" See, FTC paper [50 pages in PDF].
Several other courts have addressed the issue of state bans on direct sales of wines, with a variety of results.
4th Circuit. On April 8, 2003, the U.S. Court of Appeals (4thCir) issued its opinion [20 pages in PDF] in Beskind v. Easley, holding that North Carolina's ban on direct shipment of wine from out of state wineries to North Carolina residents violates the Commerce Clause. See, TLJ story titled "4th Circuit Holds North Carolina Ban On Internet Wine Sales Is Unconstitutional", April 8, 2003 (also published in TLJ Daily E-Mail Alert No. 640, April 9, 2003).
5th Circuit. On June 26, 2003, the U.S. Court of Appeals (5thCir) issued its opinion [39 pages in PDF] in Dickerson v. Bailey, a constitutional challenge to Texas' ban on direct sale by out of state wine sellers. The Appeals Court held that the Texas statute violates the dormant commerce clause. See, story titled "5th Circuit Holds Texas Wine Sales Statute Unconstitutional" in TLJ Daily E-Mail Alert No. 690, June 30, 2003.
7th Circuit. The U.S. Court of Appeals (7thCir) reached a different conclusion in its opinion in Bridenbaugh v. Wilson. In that case, the plaintiffs challenged the constitutionality of an Indiana statute that made it unlawful for persons in another state to ship an alcoholic beverage directly to an Indiana resident. The District Court held that the Indiana direct shipment regulation was unconstitutional under the Commerce Clause, and granted the plaintiffs' summary judgment motion (Bridenbaugh v. O'Bannon, 78 F. Supp.2d 828 (N.D. Ind. 1999)). Then, the Seventh Circuit reversed, upholding the constitutionality of the state ban.
The 7th Circuit wrote that "Indiana insists that every drop of liquor pass through its three-tier system and be subjected to taxation. Wine originating in California, France, Australia, or Indiana passes through the same three tiers and is subjected to the same taxes. Where’s the functional discrimination?"
In Swedenburg v. Kelly, Beskind v. Easley, and Dickerson v. Bailey, the state statutes provided exemptions for in state wineries, and thus discriminated against out of state wine sellers. In Bridenbaugh v. Wilson, the state statute applied equally to in state and out of state wine sellers.
Other Cases. See also, Bainbridge v. Bush, 148 F.Supp.2d 1306 (M.D.Fla. 2001), in which the District Court upheld Florida's ban on direct shipment of wine. However, it was vacated and remanded by the 11th Circuit in Bainbridge v. Turner, 311 F.3d 1104, 1112 (2002). See also, Heald v. Engler (E.D.Mich., 2001).
9/5. The Transportation Security Administration (TSA) and the Electronic Privacy Information Center (EPIC) reached an agreement regarding the release of government documents pertaining to TSA's Computer Assisted Passenger Prescreening System (CAPPS II).
On September 4, the EPIC filed a complaint in U.S. District Court (DC) against the TSA under the Freedom of Information Act (FOIA), codified at 5 U.S.C. § 552, seeking the expedited processing and release if records. The EPIC also filed a motion for a temporary restraining order seeking the immediate release release of two documents. See, the EPIC's Memorandum in Support of Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction [16 pages in PDF].
The TSA filed a pleading [2 page PDF scan] on September 5 titled "Praecipe" with the District Court that states that the TSA and EPIC "have agreed as follows: (1) the Transportation Security Administration will complete its processing of the FOIA request at issue in this civil action and deliver by hand to plaintiff's counsel all responsive and non-exempt documents or portions of documents on a rolling basis, to be concluded by 5:00 p.m. on September 25, 2003; (2) plaintiff's Motion for a Temporary Restraining Order and Preliminary Injunction is moot; and (3) the parties will submit a joint status report on or before October 2, 2003 proposing a schedule for further proceedings."
David Sobel, General Counsel, spoke at an event in Washington DC on September 5. He stated that as soon as it obtains records from the TSA regarding the CAPPS II, it will publish them in its web site.
The September 25 deadline may be significant because September 30 is the deadline for the public to submit comments to the TSA in response to its Privacy Act notice in which it proposed to establish a new system of records to support the development of the new version of it passenger screening system. See, Federal Register, August 1, 2003, Vol. 68, No. 148, at Pages 45265 - 45269.
See also, story titled "EPIC Files FOIA Suit For CAPPS II Records" in TLJ Daily E-Mail Alert No. 733, September 5, 2003. The case is numbered 03-1846. Judge Colleen Kotelly is presiding.
9/4. A trial jury of the U.S. District Court (CDCal) returned a verdict of guilty against Richard I. Berger on one count of conspiracy, six counts of loan fraud, one count of falsifying corporate books and records, one count of making false statements to company accountants and three counts of making false statements in SEC filings. The U.S. Attorneys Office stated in a release that "Berger was the president, chief executive officer, and chairman of the board of Craig Consumer Electronics. Craig was based in Cerritos and sold consumer electronic products such as car stereos and small personal stereos to retailers such as Best Buy and Circuit City."
9/3. The U.S. District Court (NDCal) sentenced Rusty McDowell to serve 24 months in prison and 12 months community confinement. He was convicted in November of 2002 of eight felony counts arising from the misappropriation of confidential parts drawings from Applied Materials. The District Court also ordered McDowell & Company, Inc. to pay a fine of $750,000. The U.S. Attorneys Office stated in a release that McDowell engaged "in a scheme to defraud Applied Materials, a Santa Clara corporation, by secretly obtaining Applied Materials semiconductor parts drawings from a former Applied Materials employee and then using the drawings to have spare parts manufactured without the permission of Applied Materials."
9/4. Federal Reserve Board (FRB) Governor Ben Bernanke gave a speech in New York City to the Bloomberg Panel for the Outlook on the U.S. Economy regarding his "impressions about what seems likely to unfold in the next year to eighteen months". He predicted that a growth rate of "4 percent or better in 2004 is plausible", and that a rebound in business information technology investment is one reason.
Bernanke (at right) stated that "I have been of the view for quite a while that acceleration of growth to 4 percent or better in 2004 is plausible; and I agree also that the decline in the unemployment rate, though steady, is likely to be slow."
He explained that "What makes the situation today feel particularly encouraging, however, is that we may finally be seeing some signs of a revival in business investment."
He continued that "the best prospects for an investment rebound in the corporate sector lie in the equipment and software sector, particularly in high-tech equipment. Over the summer we have seen indications of at least a moderate pickup in this sector. Notably, according to the preliminary GDP estimates, real investment in equipment and software rose at an annual rate of 8 percent in the second quarter. Real expenditures for high-tech equipment advanced 34 percent (at an annual rate) in the second quarter, a significant step up from the first quarter, and real spending on software rose at a 9 percent rate."
He concluded that "Perhaps managers have finally decided that they can't put off that IT upgrade any longer. Even spending on communications equipment was strong in the second quarter."
The Senate will meet at 1:00 PM. It will resume consideration of HR 2660, the Labor HHS Education appropriations bill.
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Consumer Federation of America v. FCC, No. 02-1337. This is a petition for review of the Federal Communications Commission's (FCC) November 6, 2002 order in its proceeding titled "Applications for Consent to the Transfer of Control of Licenses from Comcast Corporation and AT&T, Transferors, to AT&T, Transferee", and numbered MB Docket No. 02-70. See, Petition for Review [PDF]. Judges Edwards, Randolph and Garland will preside. Location: 333 Constitution Ave. NW.
12:00 NOON. The Recording Industry Association of America (RIAA), the American Federation of Musicians, the Country Music Association, Tennessee Songwriter's Association International, and the Gospel Music Association, and other groups, will hold a telephone call in to announce anti-piracy initiatives. To participate, call 888-423-3268 (U.S.) or 612-338-9017 (international), and provide confirmation number 698132. For more information, contact Amy Weiss, Jonathan Lamy, or Amanda Collins at 202-775-0101.
Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) [7 pages in PDF] regarding the draft Nationwide Agreement [28 pages in PDF] of the FCC, the Advisory Council on Historic Preservation, and the National Conference of State Historic Preservation Officers, regarding undertakings for communications facilities, including communications towers and antennas, under the National Historic Preservation Act (NHPA). This proceeding is titled "In the matter of Nationwide Programmatic Agreement Regarding the Section 106 National Historic Preservation Act Review Process". It is WT Docket No. 03-128. For more information, contact Frank Stilwell at 202 418-1892 or fstilwel@fcc.gov. See, story titled "FCC Announces NPRM Regarding Communications Facilities and the National Historic Preservation Act" in TLJ Daily E-Mail Alert No. 677, June 10, 2003. See also, notice in the Federal Register, July 9, 2003, Vol. 68, No. 131, at Pages 40876 - 40887.
The House will meet at 12:30 PM for morning hour, and at 2:00 PM for legislative business. Votes will be postponed until 6:00 PM. The House will resume its consideration of HR 2989, the "Transportation, Treasury, and Independent Agencies Appropriations Act for Fiscal Year 2004". See, Republican Whip Notice.
9:00 - 10:00 AM. The Federal Trade Commission's (FTC) Bureau of Consumer Protection will hold a "media briefing breakfast" regarding the FTC's recommendations for amending the Fair Credit Reporting Act (FCRA). The speakers will include Howard Beales, Joel Winston, and Peggy Twohig. See, FTC notice. Location: FTC Conference Center, 601 New Jersey Ave., NW.
5:00 PM. The House Rules Committee will meet to adopt a rule for consideration of HR 2622, the "Fair and Accurate Credit Transactions Act of 2003". The bill addresses, among other topics, identity theft. Location: Room H-312, Capitol Building.
The House will meet at 10:00 AM for legislative business. The House may take up HR 2622, the "Fair and Accurate Credit Transactions Act of 2003". See, Republican Whip Notice.
10:00 AM. The House Judiciary Committee will meet to mark up several bills, including HR __, a bill to authorize appropriations for the Department of Justice (DOJ) for fiscal years 2004 and 2005. The meeting will be webcast. For more information, contact Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.
9/5. Microsoft announced in a release that Microsoft and Be Inc. "have reached a mutually acceptable mediated settlement of an antitrust lawsuit filed by Be Inc. in February 2002, which is currently pending in the United States District Court for the District of Maryland in Baltimore. Be will receive a payment from Microsoft, after attorney’s fees, in the amount of $23,250,000 (U.S.) to end further litigation, and Microsoft admits no wrongdoing. All other terms of the settlement will remain confidential. Both parties are satisfied with the agreement and believe that it is fair and reasonable."
9/4. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) announced that it seeks comments on its draft Special Publication 800-38C, Recommendation for Block Cipher Modes of Operation: the CCM Mode for Authentication and Confidentiality [PDF]. The NIST stated that "the CCM mode of the Advanced Encryption Standard (AES) algorithm is specified for the protection of sensitive, unclassified data. The CCM algorithm combines the counter (CTR) mode for confidentiality with the cipher block chaining-message authentication code (CBC-MAC) technique for authentication." Comments should be sent to EncryptionModes@nist.gov by October 20, 2003.
9/5. Alee Cellular filed a notice of appeal of a Federal Communications Commission's (FCC) order with the U.S. Court of Appeals (DCCir) on September 5, 2003. Alee appeals the FCC Wireless Telecommunications Bureau's (WTB) order of August 8, 2003 implementing revocation of Alee's license for cellular station KNKN271.
9/5. Rep. Robert Menendez (D-NJ) and Rep. John Conyers (D-MI) introduced HR 3027, the "National Minority Media Opportunities Act". The bill would require that the Federal Communications Commission (FCC) "after notice and comment, report to Congress regarding the ownership and control of broadcast stations (including AM, FM, and television broadcast stations) used to serve language minorities. The Commission shall consider the effects, with respect to both competition and diversity concerns, of multiple ownership and undue concentration in the programming and distribution markets specific to a language minority." The bill was referred to the House Commerce Committee.
9/4. Qwest Communications filed a Section 271 application with the Federal Communications Commission (FCC) to provide in region interLATA services in the state of Arizona. See, Qwest release.

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