Source: http://www.techlawjournal.com/alert/2002/11/01.asp
Timestamp: 2017-11-21 00:33:58
Document Index: 454957296

Matched Legal Cases: ['§ 18', '§ 18', '§18', '§ 78', '§ 78', '§ 240', '§ 1030', '§ 875']

TLJ Daily E-Mail Alert No. 540, November 1, 2002.
November 1, 2002, 9:00 AM ET, Alert No. 540.
10/31. The U.S. Department of Justice (DOJ) and numerous states filed a complaint in U.S. District Court (DC) against Echostar Communications, Hughes Electronics, and others, seeking to block the proposed acquisition of Directv by Echostar, pursuant to Section 7 of the Clayton Act, 15 U.S.C. § 18. EchoStar and Hughes both provide direct broadcast satellite (DBS) service via their Dish Network and DirecTV.
Charles James, the Assistant Attorney General in charge of the DOJ's Antitrust Division, stated in a release that “This merger would give Echostar control of the skies for the provision of video programming by satellite, leaving customers to suffer from the resulting reduction in competition ... This merger would create a monopoly in those areas where cable television is not available, thereby eliminating the only competitive choice for millions of households. It would leave tens of millions of households -- for whom DirecTV, DISH Network, and cable now compete to provide multichannel video programming distribution service -- with a reduction from three to two competitive choices".
Charles Ergen, EchoStar Ch/CEO, stated in a release that "I would like to personally thank all those, including our customers, consumers, legislators, employees and numerous others, who during the past year have supported this historic merger proposal. We also thank the regulatory officials at the Department of Justice, FCC and the states who worked diligently to analyze this complex merger and gave us the opportunity to express our views. We continue to believe passionately that the merger of EchoStar and Hughes is the best chance to stop rising cable prices and to bring enhanced services to all Americans, especially those consumers living in rural America. We are obviously disappointed that at this time we have not been able to convince regulatory officials to share our vision. EchoStar will continue to explore all possible means to be allowed to compete against the cable giants and for more choice for all consumers."
The DOJ release also stated that the DOJ "gave serious consideration to the efficiencies and new services that the merging parties claimed would result from the transaction. While recognizing that certain efficiencies could result, the Department concluded the parties could not demonstrate any efficiencies likely to result from the merger were sufficient to outweigh the substantial adverse impact of the transaction on competition and consumers."
The complaint alleges that "The proposed acquisition of Hughes by Echostar would cause significant harm to competition in numerous local markets for MVPD services throughout the country. For millions of households this merger would create a monopoly. For tens of millions of households in the United States, this merger would create a duopoly. The combination of the nation's only two DBS firms would substantially lessen competition in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. For the roughly 95% of U.S. television households that currently have three or fewer options for MVPD service, this merger would lead to higher prices and lower service quality than would be the case absent its consummation. The United States and the Plaintiff States therefore seek an order permanently enjoining the merger."
The DOJ and states request that "the proposed acquisition be adjudged to violate Section 7 of the Clayton Act, 15 U.S.C. §18" and that "the Defendants be permanently enjoined and restrained from carrying out the Agreement and Plan of Merger dated October 28, 2001, or from entering into or carrying out any agreement, understanding, or plan by which Echostar would merge with or acquire Hughes, its capital stock or any of its assets".
On October 10, the Federal Communications Commission (FCC), which has authority over license transfers, announced that it has "declined to approve the transfer of licenses from EchoStar Communications Corporation and Hughes Electronics Corporation, a subsidiary of General Motors Corporation, to a new entity". The FCC has assigned the matter for hearing before an administrative law judge. See, TLJ story titled "FCC Declines to Approve EchoStar DirectTV Merger", October 10, 2002.
The report was prepared for Sen. Herb Kohl (D-WI) and Sen. Mike DeWine (R-OH), the Chairman and ranking Republican on the Senate Judiciary Committee's Subcommittee on Antitrust, Competition, and Business and Consumer Rights.
10/28. A grand jury of the U.S. District Court (CDCal) returned a two count indictment of Tony Minh Nguyen on October 23 charging that he manufactured and trafficked in counterfeit Compaq computer memory modules. The U.S. Attorneys Office (USAO) announced that he was arrested on October 28. The USAO explained the scheme in a release: "Nguyen directed sales and production at Dynasty Memory, Inc., a Santa Ana computer supply company. The two count indictment alleges that Nguyen directed Dynasty employees to purchase out-of-date Compaq memory components. Then, Dynasty employees would remove the Compaq labels and, under Nguyen’s direction, they would re-adhere the Compaq labels to non-Compaq memory components, creating a product that would be substantially indistinguishable from genuine Compaq products. Nguyen then directed that these counterfeit parts be sold as the genuine article."
10/29. Jonathan Beck plead guilty in U.S. District Court (NDCal) to insider trading in the stock of Critical Path in violation of 15 U.S.C. § 78j(b), 15 U.S.C. § 78 ff(a), and 17 C.F.R.§ 240.10b-5. Beck is a former VP of Critical Path, a San Francisco based technology company. See, USAO release.
10/30. The U.S. District Court (NDTex) sentenced Henry Wang to six months confinement, and ordered him to pay $41,042 in restitution, following his plea of guilty to one count of computer fraud in violation of 18 U.S.C. § 1030(a)(4). Wang worked as a software developer for J.C. Penney, where he accessed and copied, without authority, proprietary information, including computer files that comprised the source code for the J.C. Penney electronic commerce store. See, USAO release.
10/31. The U.S. Court of Appeals (6thCir) issued it opinion in USA v. Tommy Newell, affirming the District Court's imposition of a 27 month sentence for making threatening statements in numerous e-mails, and by telephone, in violation of 18 U.S.C. § 875(c). This is an Internet love gone wrong case. Newall met a woman over the Internet. They subsequently met in person. When her husband was released from prison, she dropped Newell. Upset, he sent her lots of ugly threats by e-mail, but did not harm her. Now, Newell goes to prison.
10/31. The U.S. Court of Appeals (6thCir) issued its opinion in Telxon v. Federal Insurance, a diversity case involving the obligation of an insurance company to reimburse its insured, a telecom company, for costs of defending of class action securities case. The Court of Appeals affirmed the District Court's summary judgment for the insurance company
10/31. The Federal Communications Commission's (FCC) Wireline Competition Bureau (WCB) issued a Public Notice [PDF] in which it requests comments on AT&T's October 15 Petition for Rulemaking to Reform Regulation of Incumbent Local Exchange Carrier Rates for Interstate Special Access Services [118 pages in PDF]. AT&T stated in a release "the premature removal of price regulations on special access services -- the high capacity local links to buildings that provide businesses with telephone and high speed Internet services -- has allowed the Bells to gouge their customers and competitors to the tune of $5 billion annually, with a resulting deadweight drag on the economy." The ILECs oppose the proposal. Comments are due by December 2, 2002. Reply comments are due by December 23, 2002. This is RM No. 10593.
10/31. The Federal Communications Commission (FCC) announced the agenda for its open meeting on Thursday, November 7. The FCC's Spectrum Policy Task Force (SPTF) will report on its findings and recommendations, and the FCC will take up other spectrum related items.
The meeting will be at 9:30 AM in Room TW-C305 (Commission Meeting Room), 445 12th Street, SW.
10/29. Federal Reserve Board Chairman Alan Greenspan gave a speech titled "Education" to the Institute of International Education, in New York City. It was a wide ranging and philosophical speech about the nature of knowledge, additions to knowledge, innovation, education and economic success. And, like many of Greenspan's recent speeches, it focused on the causes and consequences of advances in computer and communications technologies.
It is common for elected representatives and government officials to advocate the role of government in improving the educational system. Greenspan omitted the role of government from his speech. Instead, he argued, the educational system is good because it imitates, interacts with, and responds to the private sector. Moreover, it works so well because of some of its own institutions, such as its emphasis on research, its peer reviewed journals, and its continuing commitment to the liberal arts and interdisciplinary activities.
It is also common for elected representatives and government officials to address innovation in terms of increasing government spending at agencies or universities that conduct research. It is also common for representatives and officials to advocate changes to the legal framework for protecting innovation -- the intellectual property laws. Although, most of the debate in recent years has focused solely on laws affecting the music and movie industries, which rarely contribute to knowledge.
He also said that the U.S. system of higher education is effective because of competition, both between institutions, and between categories of institutions (such as research universities, liberal arts colleges, and community colleges).
10/31. Robert Lamm was named Corporate Secretary and Director of Corporate Governance of Computer Associates International. See, CAI release.
10/29. Samuel Palmisano was elected Chairman of the Board of Directors of IBM, effective January 1, 2003. He will succeed Louis Gerstner. See, IBM release.
10/31. Jack Krumholtz was named co-chair of CapNet, a Washington DC based group that represents technology companies. He is also Microsoft's Director of Federal Government Affairs and Associate General Counsel. He replaces former Rep. Vic Fazio. Lisa Nelson of AOL Time Warner remains a co-chair.
The notice adds that "At that time, copies of the Opinions can be downloaded in PDF format from the U.S. District Court's homepage, http://www.dcd.uscourts.gov."
The Department of Justice, nine state plaintiffs, and Microsoft reached a settlement last November of the governments' antitrust case against Microsoft. They submitted a revised settlement agreement in February of this year. Judge Kotelly can either approve or reject this settlement. See, Second Revised Proposed Final Judgment, filed on February 27, 2002. In addition, Judge Kotelly will likely rule on remedies requested by the non-settling state plaintiffs.
12:30 - 2:00 PM. The Cato Institute will host an event titled "Capitol Hill Briefing: Too Much Deregulation or Not Enough?" The speakers will be Peter VanDoren (Cato) and Mark Cooper (Consumer Federation of America). For more information, contact Krystal Brand at 202 789-5229. Location: Room 121, Cannon House Office Building.
4:30 PM. The U.S. District Court (DC) will release online its opinions in the Microsoft cases. See, notice [PDF].
Deadline to submit comments to the NTIA in response to its request for comments on two of the nine exceptions to the Electronic Signatures in Global and National Commerce (E-SIGN) Act. The E-SIGN Act provides for the acceptance of electronic signatures in interstate commerce, with certain enumerated exceptions. The two categories of exempt documents that are the subject of this request for comments are court records and hazardous materials notices. The Act tasks the NTIA with studying these exemptions, and providing reports to Congress. See also, NTIA release, notice in Federal Register, regarding court records, and notice in Federal Register, regarding hazardous materials notices.
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Altiris v. Symantec, No. 02-1137. This is a patent infringement case involving technology for remotely controlling the boot process of a computer. It is appealed from the U.S. District Court (CDUtah). Location: 717 Madison Place, NW.