Antitrust
Court Reverses Split But Upholds Monopoly Ruling
     The U.S. Circuit Court of Appeals for the District of Columbia this week reversed the breakup of Microsoft but continued to hold the software giant liable for numerous counts of maintaining an operating-system monopoly with its Windows software. Although the appeals court reversed one of the three claims of liability against Microsoft and substantially modified a second claim, the unanimous ruling by the seven judges upheld the findings of fact and many of the legal conclusions of antitrust violations by District Court Judge Thomas Penfield Jackson. Microsoft competitors said the decision was better than they could have expected. But tech groups sympathetic to the company noted that the decision likely would result in a settlement favorable to Microsoft. The court also rebuked Jackson for judicial misconduct and removed him from future proceedings in the case.

Antitrust
Bush To Await Justice Department Review Of Ruling
     President Bush will not take any action on Thursday's appeals-court reversal of the court-ordered breakup of Microsoft until the Justice Department analyzes the decision, White House spokesman Ari Fleischer told reporters. Many legislators also were reluctant to comment until they had studied the decision -- although several Microsoft supporters were quick to claim victory. House Majority Leader Dick Armey, R-Texas, applauded the appeals court for sending the message "that innovation in America will be rewarded, not punished." State attorneys general who have pursued Microsoft for antitrust violations, meanwhile, claimed victory and said they will continue pursuing their case against the software firm regardless of how the Justice Department proceeds. And both allies and foes of Microsoft within the tech community found something to applaud in the decision.

Lobbying
Tech, Business Interests Form E-Commerce Group
     A coalition of Web businesses and associations that say established intermediaries and state licensing laws are thwarting the adoption of e-commerce formed a new association, NetChoice, to challenge behavior they see as anticompetitive and harmful to consumers. Members of NetChoice hope the organization will create a countervailing political force to established businesses that benefit from laws and practices that keep new competitors from selling goods and services over the Internet. The members highlighted laws affecting the real estate, automotive and travel industries, and products such as wine and contact lenses.

Intellectual Property
High Court Hands Freelance Writers A Big Win
     Publishers and their electronic database partners have been violating copyrights held by freelance writers, the Supreme Court ruled 7-2 in a decision likely to strengthen the hand of copyright holders at the expense of individuals and firms using copyrighted material. Writing for the court in New York Times vs. Tasini, Justice Ruth Bader Ginsburg wrote that electronic databases such as Reed Elsevier's Lexis-Nexis "effectively overrides the authors' exclusive right to control the individual reproduction and distribution of each article." The Supreme Court did not craft a remedy for the violations and remanded that issue back to the district court for resolution.

Taxes
WTO Tax Decision Puts Tech Industry At Risk
     The high-tech industry is among the myriad of U.S. trade sectors that could be targeted for European Union retaliation if a World Trade Organization case against a U.S. tax regime is upheld and no resolution is reached. A WTO dispute-settlement panel last week reached a confidential interim ruling that the U.S. tax system is an export subsidy, a violation of WTO rules. If it ultimately wins the case, which could last several more months, the European Union could impose 100 percent tariffs on U.S. exports valued at $4.1 billion. The tech implications are "profound," said one tax expert at a tech trade group. Software exporters could be particularly vulnerable because they have invested heavily in anticipation of the tax system being in place.

Taxes
New Trade Group Pursues Tech Tax Breaks
     The federal tax code must keep pace with technological change or else U.S. small businesses will not be able to compete in the global marketplace. That is the message the Alliance for Small Business Investment in Technology, a new industry group, is sending to lawmakers. The group is advocating an overhaul of the tax code that would let companies write off the cost of technology equipment more quickly. Lawmakers have introduced bills that would change the depreciation rules for an array of technology equipment. The measures include: H.R. 1037, S. 189, H.R. 1268, S. 640, H.R. 1411, S. 752, H.R. 1848 and H.R. 1934.

Education
House Panel Favors Senate's Distance-Learning Bill
     The chairman and ranking Democrat of a House subcommittee praised a Senate bill that would create new exemptions to copyright law for distance learning. At a hearing of the House Judiciary Courts, the Internet and Intellectual Property Subcommittee, Chairman Howard Coble, R-N.C., and ranking Democrat Howard Berman of California said they are pleased with the agreement between copyright interests and university groups encompassed within the Senate measure, S. 487. They ignored a competing measure, H.R. 2100. The Senate bill "satisfies most of the members at the table," Coble said.

Telecom
     The FCC intends to delay the July auction of spectrum the wireless industry wants for third-generation services. In a letter sent to Commerce Secretary Donald Evans, FCC Chairman Michael Powell recommended revising the current spectrum-allocation plan and delaying the spectrum auction for the bands covering 1710MHz to 1755 MHz and 2110 MHz to 2150 MHz. Tom Wheeler, president of the Cellular Telecommunications and Internet Association, praised the decision, saying: "A well-planned, national spectrum-management policy is crucial for wireless companies to make long-range plans."

Domains
Commerce Activates .Biz, .Info Domain-Name Suffixes
     The Commerce Department added the new .biz and .info domain-name suffixes to the Internet's root server, the last step in taking the domains live. The two new extensions are expected to be functional this week and available to the public to register names by September, according to sources at the companies that will manage the suffixes. The Internet Corporation for Assigned Names and Numbers (ICANN), which oversees domain names, announced the decision. ICANN critics were quick to note how fast the department acted.

White House
Science Adviser Is Unknown Entity In Tech Circles
     President Bush's choice to head the White House Office of Science and Technology Policy (OSTP) is unknown to many in the high-tech community, but lobbyists in the sector expressed relief at his nomination. They hope the move signals a step forward in the naming of about 75 high-level scientific jobs in the federal government. Bush announced that he would nominate John Marburger to head OSTP. Marburger currently is the director of the Brookhaven National Laboratory in New York.

Privacy
California Lawmakers Kill Financial Privacy Bill
     A committee in the California Assembly struck down a bill that was considered the harbinger of future privacy legislation in the states. The vote was 3-5, with three committee members abstaining. The state Senate had passed, the bill, S.B. 773, on June 4. The measure originally followed an "opt in" approach to financial privacy. It would have put the onus on companies to gain prior consumer consent before sharing personal information with third parties. After the Assembly rejected a separate opt-in measure, Democratic Sen. Jackie Speier wove potential remedies to industry concerns into her bill, but they did not win sufficient support in the Assembly's Banking and Finance Committee.

Telecom
     New York Gov. George Pataki signed into law a bill that makes the state the first in the nation to ban cell-phone use while driving. The law allows drivers to use handheld cell phones only in an emergency, to call for help or to report a dangerous situation. It allows law enforcement officers to stop vehicles and issue verbal warnings to drivers from Nov. 1 until Nov. 30 and to impose $100 fines on violators starting Dec. 1.