Former chief operating officer of Wireless Zone, the largest independent third-party reseller of Verizon Wireless, James Dunham, 59, pleaded guilty to one count of wire fraud Thursday in U.S. District Court in Boston after he was arrested and charged in February with selling confidential business information about the wireless industry to an analyst at a Boston-based financial services firm, said the U.S. Attorney's Office for the District of Massachusetts in a news release. It said Thursday that Dunham is to be sentenced Sept. 3. The office said that for more than two years, Dunham provided confidential information, including the status of certain product launches, the number of new subscribers to a specific wireless provider, and information for specific smartphones, in return for $2,000 per month. “Mr. Dunham abused his position and violated his duty to his employer, customers, and shareholders by stealing business secrets for personal gain,” said Special Agent in Charge of the FBI Boston Field Office Vincent Lisi. The maximum sentence Dunham could receive is up to 20 years in prison, three years of supervised release and a fine of either $250,000, or twice the gross gain or loss, said the bureau.
U.S. District Court Judge William Caldwell sentenced 41-year-old Daniel Curran of York, Pennsylvania, to 70 years in prison -- the maximum sentence -- for producing, receiving and possessing child pornography, a Department of Justice news release said Thursday. The FBI found more than 40,000 images and more than 100 videos of child pornography on Curran’s computer and thumb drives, the release said. U.S. Attorney Peter Smith said Curran also sexually assaulted a 9-year-old boy multiple times and recorded the assaults, the release said. Curran was charged in November 2013 and signed a plea agreement in November 2014, it said.
Threats made over the Internet are protected unless they're malevolent or reckless, the U.S. Supreme Court ruled Monday in Elonis v. U.S. (see 1406180074). After his wife left him, petitioner Anthony Douglas Elonis used the pseudonym “Tone Dougie” on social networking sites like Facebook to post self-styled rap lyrics containing graphically violent language and imagery about his wife, co-workers, a kindergarten class, and state and federal law enforcement. Elonis used disclaimers to say the lyrics were “fictitious,” not intended to depict real persons, and that he was exercising his First Amendment rights. The American Civil Liberties Union, Center for Democracy & Technology and Cato Institute were among groups that filed a joint brief on behalf of Elonis (see 1412020054). Chief Justice John Roberts wrote the opinion for the court in the 7-2 decision. Justice Antonin Scalia wrote an opinion that concurred in part and dissented in part. Justice Clarence Thomas wrote the dissenting opinion. In a news release, Rutherford Institute attorneys applauded the Supreme Court’s decision and said “[i]n order to protect the First Amendment rights of speakers, courts must ensure that they are criminalizing more than just the unrealized and unrealizable fears of particularly sensitive listeners.” The Rutherford Institute is representing Brandon Raub, a Marine who was arrested, detained in a psychiatric ward and forced to undergo psychological evaluations based solely on the controversial nature of lines from song lyrics, political messages and virtual card games that he posted to his private Facebook page, the release said. “Whether it’s a Marine arrested for criticizing the government on Facebook or an ex-husband jailed for expressing his frustrations through rap lyrics on Facebook, the end result is the same -- the criminalization of free speech,” Rutherford Institute President John Whitehead said. “While social media and the Internet have become critical forums for individuals to freely share information and express their ideas, they have unfortunately also become tools for the government to monitor, control and punish the populace for behavior and speech that may be controversial but are far from criminal,” he said.
Guggenheim analyst Paul Gallant said he believes the odds are 1 in 3 that a panel of the U.S. Court of Appeals for the D.C. Circuit will stay two parts of the FCC net neutrality order: broadband reclassification under Title II of the Communications Act and an Internet conduct standard. He said his reasons were: "1) Carriers don’t appear to have a strong argument that Title 2 would cause 'irreparable harm' if it takes effect on June 12. The FCC didn’t actually regulate prices or prohibit any services that carriers are currently selling. 2) Title 2/net neutrality was enacted by a Democratic FCC on a 3-2 party line vote, and two of the three judges on the panel are Democrats." Both Democrats were nominated by President Barack Obama, who in November urged the FCC to use its full authority to uphold net neutrality. Gallant said in an email to investors that most of them probably don't even realize a stay is possible, but it would be "clearly positive for cable."
Telco and cable petitioners filed their final brief Thursday in support of their motion to stay two key parts of the FCC net neutrality order, which they called "a seismic departure from the status quo that has prevailed for more than two decades." The American Cable Association, AT&T, CenturyLink, CTIA, NCTA, USTelecom and the Wireless Internet Service Providers Association filed their response to the stay opposition of the FCC, Department of Justice and others (see 1505220037) a day before the filing deadline imposed by the U.S. Court of Appeals for the D.C. Circuit. The petitioners said FCC reclassification of broadband Internet access as Title II common carriage under the Communications Act would expose their industry members "to a host of new, ill-defined requirements, and it immediately threatens them with class-action litigation and enforcement actions." They said the reclassification is likely to be set aside as contrary to the Communications Act and promulgated in violation of the Administrative Procedure Act, citing a host of reasons. "This is thus a paradigmatic case for granting a stay pending appeal," the groups said. "The Internet economy has thrived without Title II mandates, to the immense benefit of the public." Petitioners knocked FCC arguments invoking Supreme Court Justice Oliver Wendell Holmes to claim that case-by-case adjudication can't cause harm. "Petitioners object not to case-by-case adjudication itself, but to a massive regulatory sea change, accompanied by potential class-action litigation and multi-million dollar forfeitures, without any intelligible guidance as to what 'rates' and 'practices' are 'just' and 'reasonable' in the broadband context, and what conduct the newly concocted Internet conduct standard proscribes. Justice Holmes never sanctioned such a regime," they said. Thousands of providers face "immediate and irreparable harm," with the situation "most dire for the hundreds of small broadband providers," they said. The petitioners haven't asked that the four FCC net neutrality rules -- no Internet blocking, throttling or paid prioritization, along with transparency duties -- be stayed. Absent a stay, the commission order takes effect on June 12. The petitioners said at a minimum the court should grant expedited review, which the agency and its intervenors support.
U.S. Solicitor General Donald Verrilli urged the Supreme Court not to hear Google's appeal of Oracle's lawsuit against the company over claims that Google copied Oracle's Java application programming interface (API) technology in its Android mobile operating system. The U.S. Court of Appeals for the Federal Circuit ruled in May that APIs are copyrightable and separately remanded Google's argument that use of APIs qualifies under the fair use doctrine to the U.S. District Court in San Francisco, which originally ruled on the 2012 case (see report in the May 12, 2014, issue). Verrilli argued in a brief Tuesday sought by the Supreme Court that the court shouldn't rule on Google's appeal and should instead allow U.S. District Judge William Alsup to rule on the fair use argument in the San Francisco federal court. APIs are materially indistinguishable from other types of computer codes and are therefore copyrightable, Verrilli said. Legal experts have told us they believe there's a substantial chance the Supreme Court could agree to hear the case, Google v. Oracle, because of its substantial implications for the computer programming community (see 1411100027). Google said in a statement that it's disappointed by Verrilli's brief, but “we look forward to supporting the clear language of the law and defending the concepts of interoperability that have traditionally contributed to innovation in the software industry.” Verrilli's brief “agrees with the Federal Circuit's decision and affirms the importance of copyright protection as an incentive for software innovation,” Oracle said in a statement. The Computer & Communications Industry Association decried Verrilli's brief, with President Ed Black saying in a statement that “even after conceding that there are ‘concerns about the effects that enforcing [Oracle’s] copyright could have on software development,' the Solicitor General has told the Supreme Court that this case isn’t worth its attention. This would have been an opportunity for [President Barack Obama's administration] to demonstrate its forward-looking technological leadership.”
USTelecom asked the U.S. Court of Appeals for the D.C. Circuit to intervene in defense of the FCC against Full Service Network's petition for review challenging the agency's net neutrality order. "Unlike all of the other petitioners that have filed petitions to date, these Petitioners intend to argue that the FCC should have imposed even more regulation on providers of broadband Internet access service, including USTelecom’s member companies," USTelecom said in its motion Tuesday. USTelecom has filed a petition for review (and sought a stay) of the FCC order on the grounds that the commission allegedly overstepped its authority in seeking too much regulatory oversight, among other things.
The case North Carolina recently filed against the FCC was moved to the 6th U.S. Circuit Court of Appeals in Cincinnati, after a petition to move and consolidate the case with the one in Tennessee was granted in docket 15-506 (see 1505150043). North Carolina and the U.S. did not oppose the motion, the document said. In the same docket, National Association of Regulatory Utility Commissioners (NARUC) requested leave to intervene in support of North Carolina in the proceedings. The member commissions are, like municipalities, creatures of the state and they have their authority and jurisdiction specified by the state, said NARUC. Any federal effort here through pre-emption has obvious and direct implications for NARUC members, it said. The 4th Circuit in Richmond said the filing is considered moot and that the 4th Circuit doesn't intend to act on the motion. Lawyer William Kirsch also requested leave to intervene in the case because North Carolina is “correct that the FCC pre-emption is otherwise contrary to law,” he said in a filing with the 4th Circuit. The FCC denial of a fee waiver for information about rural telecom cooperatives is contrary to law as a failure to consider alternatives, Kirsch said. From the standpoint of constitutional federalism, the action the FCC has taken in regard to North Carolina and Tennessee is one of the most problematic ever taken by the commission, said Seth Cooper and Randolph May on the Free State Foundation's website. "The FCC's claims of preemptive authority to interfere with the exercise of states' discretion over their political subdivisions clash with fundamental principles of constitutional federalism," they wrote. "The Supreme Court's jurisprudence has long recognized that states have broad discretion to delineate the powers local governments may exercise."
The Department of Justice and the FCC, backed by intervenors, asked the U.S. Court of Appeals Friday for the D.C. Circuit to deny the telco/cable request to stay the FCC net neutrality order's Communications Act Title II broadband reclassification and Internet conduct standard (see 1505130049). “We remain confident the court will deny the request for a stay," an FCC spokeswoman said. "Petitioners have not demonstrated that they are likely to prevail, and granting the stay motion would strip the FCC of the ability to protect consumers and innovators from harmful conduct by broadband providers.” In their opposition, DOJ and the FCC said the stay motion wasn't what it seemed. "It asks the Court to halt the application of Title II of the Communications Act to broadband, while allowing three bright-line rules to go into effect," they said. "But those bright-line rules are precisely the kind of regulation this Court held (in Verizon v. FCC, 2014) could not be applied until and unless broadband was reclassified as a 'telecommunications service.'" DOJ and the FCC said the Supreme Court's 2005 NCTA v. Brand X ruling was controlling, giving the commission authority to set telecom policy in a complex area, including the discretion to divide broadband into a telecom service of pure transmission and a separate information service, such as providing an email address. "The order does precisely that," they said. "The decision to reclassify broadband as offering a telecommunications service is consistent with the marketplace today and necessary to fulfill the goals of an open Internet, which the Verizon Court held were valid." DOJ and the FCC disputed petitioner claims they would suffer irreparable harm, another stay requirement: "Petitioners showcase a few broadband providers representing a small percentage of the marketplace to allege that the entire industry will be harmed, yet even these cherry-picked examples fail to demonstrate harm from the order." Former Supreme Court Justice Oliver Wendell Holmes "would be astonished to hear petitioners claim that unfairness, vagueness, and uncertainty result from the use of case-by-case adjudication in which the commission simply seeks the 'experience' that our common law tradition extols," the agencies said. In their opposition, industry and "public interest" intervenors said the broadband reclassification and net neutrality rules "safeguard the public's ability to use the Internet ... without interference from petitioners." They said "the harms from a stay would dwarf the speculative injury petitioners claim, none of which is irreparable and little, if any, of which qualifies as injury at all." The intervenors are Cogent, Comptel, Dish Network, Level 3, Netflix, Etsy, Kickstarter, Meetup, Tumblr, Union Square Ventures, Vimeo, Credo Mobile, Demand Progress, Fight for the Future, Center for Democracy and Technology, New America's Open Technology Institute, Vonage, the National Association of State Utility Consumer Advocates, ColorOfChange, Public Knowledge and Free Press. The telco/cable petitioners have until noon next Friday to file a reply.
Alamo Broadband and USTelecom asked the U.S. Court of Appeals for the D.C. Circuit not to dismiss their initial challenges to the FCC net neutrality order. In a joint opposition to the agency's motion to dismiss their filings, Alamo and USTelecom said the FCC had conceded they have since filed timely supplemental petitions for review of the order following its Federal Register publication. "The Court need not decide the motion to dismiss now and can -- and should -- refer the motion to the merits panel, which may address it if necessary to resolve this case," said the company and the association. "In any event, contrary to the FCC’s claims, neither its regulations nor this Court’s precedents clearly resolve the question of when a party may petition for review of a declaratory ruling that is included in an FCC document that also promulgates new regulations."