Verizon Internet Services’s warnings about the dangers of RIAA’s sweeping Digital Millennium Copyright Act (DMCA) subpoena blitz have been borne out, Verizon Vp-Assoc. Gen. Counsel-Internet Policy Sarah Deutsch said Fri. Pacific Bell Internet Services’ filing of a lawsuit last week challenging the issuance of hundreds of DMCA subpoenas and/or DMCA notices by RIAA, MediaSentry and Titan Media prove Verizon’s point -- so far unsuccessfully argued in federal court in D.C. -- that the DMCA Sec. 512(h) subpoena process is unconstitutional and will be abused, Deutsch told us. “These are not hypothetical arguments,” she said.

Boeing asked U.S. Dist. Court, Orlando, in a motion filed late Thurs., to dismiss 9 counts of Lockheed Martin’s lawsuit against it. Lockheed filed suit in early June charging that 3 former Boeing employees had used Lockheed documents to win contracts in the U.S. Air Force (AF) evolved expendable launch vehicle (EELV) competition (CD June 11 p12). Boeing said that although Lockheed’s suit identified the facts of the situation correctly, Lockheed “is trying to transform a claim for theft of trade secrets and related business torts into a complex and sprawling racketeering and antitrust case far removed from the facts.” The counts in question deal with racketeering, conspiracy and procurement integrity, all of which were brought against Boeing, which said it was an “effort to damage Boeing’s reputation through this opportunistic litigation.” The AF recently completed its investigation of the EELV competition, concluding that the former employees had been in possession of the documents during the competition (CD July 25 p1), but a Boeing spokesman said the company didn’t dispute that: “We acknowledge the fact that the employees were in possession of proprietary documents. We're challenging the allegation that they were used to gain an advantage.” Since the suit still is in progress, the spokesman said, he couldn’t explain what the company thought the former employees were doing with the documents. Boeing said its motion didn’t “challenge Lockheed’s trade secret and related business tort claims,” but the spokesman said that a pending motion would. He also confirmed that reports that the company planned to challenge the AF’s decision were untrue. Meanwhile, Boeing reported that its launch of the AF satellite DSCS 3-B6 would be delayed at least until today (Aug. 4) in order to complete additional testing. The launch had been scheduled for Sun.

After 5 years of legal wrangling over NextWave’s PCS licenses, similarly situated bankrupt bidder Urban Communicators asked the FCC to reinstate its C- and F-block licenses. The company, which won 10 C-block and 13 F-block licenses in 1996, cited the Jan. Supreme Court ruling that the FCC had erred when it cancelled NextWave’s licenses for nonpayment. Urban Comm also urged the agency to adjust the interest rates charged for the revised installment payment period to reflect the lower rates that would apply if the licenses were granted today. Arguments on the application of lower interest rates are part of discussions between NextWave and the FCC on that carrier’s installment payments, many sources said.

Wireless carriers are stepping up their calls for the FCC to rule on questions involving intercarrier compensation by mobile operators and LECs, citing the rising number of wireless termination tariffs filed by wireline carriers. While wireless carriers want the Commission to rule those tariffs are illegal, rural LECs have urged the agency to uphold their lawfulness, defending them as cost-based and voluntary because they apply only when there’s not a negotiated agreement.

Mandated receiver performance standards “based on the rapidly changing technology of today would lessen incentives to develop and deploy receiver improvements,” CEA told FCC in comments filed this on Commission inquiry on receiver performance requirements.

Wireless carriers and others cautioned the FCC this week that an inquiry on receiver performance requirements should lead to neither mandatory standards for their industry nor creation of an “interference temperature.” Cingular and BellSouth went so far as to recommend that the Commission suspend the inquiry for now because it didn’t have enough concrete information on the noise floor in different bands. But Microsoft said it favored the FCC’s setting such receiver specifications, saying in comments this week: “If Commission licensees are to continue to enjoy protection from ‘harmful interference,’ then it is in the public interest for the Commission to define the extent of that protection just as explicitly as it defines geographic exclusivity or channel assignments.”

Top FCC officials said Wed. at the Wireless Communications Assn. (WCA) show in Washington that they expected decisions by early next year on a series of interlocking spectrum issues, including efforts to solve public safety interference at 800 MHz. The outcome of the 800 MHz proceeding has implications for replacement spectrum that Multipoint Distribution Service (MDS) operators seek in the planned reallocation of some MDS spectrum for advanced wireless services.

While U.S. industry frets over rollout of European Union’s (EU’s) new value-added tax (VAT) on e-commerce, European Commission (EC) has acknowledged it really has no power to enforce compliance with directive. VAT on electronically supplied services (ESS), which went into effect July 1, applies to services -- including music, broadcasting and software delivered over Internet -- that are downloaded by consumers within EU. U.S. companies contend tax will discriminate against American businesses by, among other things, forcing them to try to verify customer’s location in order to collect proper amount of VAT and to submit to onerous audits in multiple countries.

Kmart is seeking to recover $49 million paid to Handleman under bankruptcy protection, distributor said Mon. Handleman said discount chain filed complaint with U.S. Bankruptcy Court, Chicago, seeking repayment of money it gave distributor as “critical trade vendor” shortly after filing for bankruptcy protection last year. Kmart, which emerged from bankruptcy protection in May, paid more than $300 million to key suppliers deemed so important that prebankruptcy bills were paid immediately. Other creditors wait until bankruptcy process is completed. Such critical vendor payments are common in bankruptcy cases, but federal judge in Chicago ruled earlier this year that Kmart should not have made them. Kmart is appealing that decision, but is continuing to seek money while it awaits final ruling. Handleman said it was confident that appeals court would rule in Kmart’s favor and it wouldn’t have to repay money. Handleman Chmn.-CEO Stephen Strome said in statement that, despite court action, company maintained “strong and continuing business relationship” with Kmart. Shortly after filing for bankruptcy, Kmart announced plan to close 283 stores, move that Handleman said at time would reduce its annual revenue by $35 million.

RIAA may run into legal, political and practical hurdles to getting music file-sharing down to manageable levels by filing hundreds of lawsuits against large-scale traders, technology lawyers we polled said Thurs.