An employee of MCI Communications, Ivy James Lay, was charged with
stealing 60,000 calling card numbers from MCI and other long-distance
companies, used to make $50 million worth of long-distance calls. Lay,
also known as "Knightshadow," allegedly
devised software to trap calling-card numbers from local and
long-distance companies coming across MCI telephone switching equipment.
Customers that suspect their calling-card numbers were illegally used
should contact the customer service departments of
their long-distance carrier immediately. (San Jose Mercury News,
October 3, 1994, 8A; New York Times, October 5, 1994, C1.)
The leader of an international ring of computer hackers -- Max
Louran of Majorca, Spain -- pled guilty in a U.S. District Court to
stealing thousands of telephone calling card numbers used to make $140
million in unauthorized long-distance calls. Louran pled
guilty to conspiracy and wire fraud charges. (San Jose Mercury News,
October 28, 1994, 3D.)
Clinton Watson of San Jose, California, was arrested and charged
with making illegal cellular phones used to defraud local cellular phone
companies of about $500,000 in three months. Watson allegedly created
more than 1,000 clone phone and sold them for
$1,000 to $2,000 each. Watson is also charged with writing a
computer program to alter cellular phones so they could be reprogrammed
repeatedly. He allegedly sold the program for $60,000 -- $100,000 in
Singapore and the Philippines. Two other men were
arrested with Watson, including his son. (San Jose Mercury News,
October 19, 1994, 1G.)
An arbitration panel in New York ruled that the Princeton Review has
no right to establish an Internet address (kaplan.com) using the name of
its chief rival, Stanley H. Kaplan Educational Centers Ltd. The parties
agreed to arbitration after suit was filed in U.S.
District Court in Manhattan. (New York Times, October 6, 1994, C1.)
Congressman Edward Markey warned that America Online's practice of
selling lists of its subscribers to other companies could pose a new
threat to privacy. In response, the computer communication and
information service said it would suspend its practice
until all the issues are satisfactorily resolved and would remove
names at customers' request. (San Jose Mercury News, October 5, 1994,
1G.)
The Federal Communications Commission ordered Trans Union
Corporation, one of the three largest credit checking companies in the
United States, to stop renting marketing lists based on credit checks it
is authorized to carry out. According to the FCC, Trans
Union's actions were restricted by the Fair Credit Reporting Act.
(New York Times, October 19, 1994, C3.)
The State Department denied a request by a California engineer to
export a computer disk holding samples of some powerful and widely-used
software encoding formulas. The engineer, Philip R. Karn Jr. of San
Diego, filed the request as a challenge to the
International Traffic in Arms Regulations. The disk is a companion
to a popular textbook on coding techniques by Bruce Shneier, titled
"Applied Cryptography." Included on the disk is source code, including
instructions for the Data Encryption Standard and
Pretty Good Privacy (widely known as D.E.S. and P.G.P.,
respectively). Karn argued the restrictions were meaningless because the
same information can be obtained in standard cryptographic textbooks
that can freely be exported and the same software is
already freely available around the world. (New York Times, October
17, 1994, C3.)
FBI Director Louis Freeh is reported to have indicated the FBI will
seek congressional help if the public's use of cryptography foils its
ability to implement authorized wiretaps. The FBI disputes that Freeh
spoke about Congress or any attempt to ban forms of
cryptography. Freeh's reported comments come within a few weeks of
passage of the Digital Telephony bill, which compels telephone companies
to install new switching gear that will allow law enforcement officials
to conduct court-authorized wiretaps on calls
routed through them. The government will pay $500 million for the
installation of appropriate switches. (San Jose Mercury News, October
22, 1994, 10D.)
The Federal Communications Commission appeared to rule that the cost
of telephone companies building video networks should be borne by video,
not phone, customers. The FCC also ruled that a single programmer cannot
control "all or substantially all" of the
channels on the new systems. (New York Times, October 21, 1994, C2;
San Jose Mercury News, October 21, 1994, 1C.)
Thirteen parties lost rights to deliver wireless services when they
failed to pay for licenses won at government auction in July. The
parties will have to pay a penalty. (San Jose Mercury News, October 8,
1994, 9D.)
A U.S. District Court dismissed a copyright suit by Jefferson
Airplane against Berkeley Systems Inc. over the winged toaster in the
"After Dark" computer screen-saver program. The court ruled that
Jefferson Airplane failed in 1973 to obtain a separate copyright
registration for the cover art of its album "Thirty Seconds Over
Winterland," which shows a flock of winged toasters. (San Jose Mercury
News, October 6, 1994, 3E.)
The U.S. Patent & Trademark Office rejected 46 patent claims filed
by Compton's New Media in June 1994. In August 1993, a patent was issued
that Compton's says gave it exclusive rights to a method of allowing
multimedia software users to search in and
retrieve graphics, sound and video within the same program. The
August 1993 patent was reexamined and rescinded earlier this year.
Compton's filed an appeal in June 1994 with some new and different
claims. (San Jose Mercury News, October 29, 1994, 10D.)
The Federal Communications Commission issued regulations allowing 5
rivals (Motorola Inc., TRW Inc., Loral Corp., Ellipsat and Constellation
Communications) to share a scarce number of available radio frequencies.
The rivals all hope to provide a global
wireless network to allow people to make and receive calls on
pocket-sized telephones from almost anywhere in the world. (New York
Times, October 15, 1994, p.17; San Jose Mercury News, October 15, 1994,
13D.)
CyberLex (tm) is published solely as an educational service. The author,
a California attorney, is Executive Editor of LEXIS COUNSEL CONNECT
CALIFORNIA. He may be contacted at jrosen03@reach.com or
cyberlaw@cyberlaw.com; questions and comments may
be posted on America Online (go to keyword "CYBERLAW"). Copyright (c)
1994 Jonathan Rosenoer; All Rights Reserved. CyberLex is a trademark of
Jonathan Rosenoer. CyberLex on the World Wide Web
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