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With the end of the most recent term of the U.S. Supreme Court, it’s appropriate to see what the Court did — and did not do by denying review to cases — in regulating the Internet. The Court ruled directly to allow legislation that provides federal funds and Internet access to private schools and issued a decision in a cable television case that, observers feel, could result in less government regulation of the Internet. It also let stand decisions that held that Internet service providers are not legally and financially liable when someone is defamed in e-mail communications or bulletin board messages; allowed federal subsidies to provide Internet hookups for schools and libraries; and held that domain names could be taken away from a registrant on the showing of “bad faith” registration. Mitchell v. Helms, U.S., No. 98-1648, 6/28/00. The Court held that legislation that channels federal funds to local educational agencies to lend educational materials, including computer software and hardware, to both public and private schools is not an endorsement of religion and therefore does not violate the Establishment Clause of the U.S. Constitution. The case dealt with Chapter 2 of the Education Consolidation and Improvement Act of 1981, which channels federal funds via state educational agencies to local educational agencies, which in turn lend educational materials and equipment, such as library and media materials and computer software and hardware, to public and private elementary and secondary schools to implement “secular, neutral, and nonideological” programs. The respondents filed suit alleging, among other things, that Chapter 2, as applied to the Jefferson Parish (La.) Catholic schools, violated the First Amendment’s Establishment Clause. The district court held, under Lemon v. Kurtzman, 403 U.S. 602 (1971), that Chapter 2 had the primary effect of advancing religion because the materials and equipment loaned to the Catholic schools were direct aid and the schools were pervasively sectarian. The district court relied primarily on Meek v. Pittenger, 421 U.S. 349 (1975), and Wolman v. Walter, 433 U.S. 229 (1977), in which programs providing many of the same sorts of materials and equipment as does Chapter 2 were struck down, even though programs providing for the loan of public school textbooks to religious schools were upheld. The focus of the Dec. 1, 1999, oral arguments before the Supreme Court was the extent to which the computers could be diverted for religious uses. University of Utah Law Professor Michael McConnell, representing seven Jefferson Parish Catholic school parents, argued that computers can be used for strictly nonreligious purposes. But Lee Boothby of Washington, D.C.’s Boothby & Yingst, representing Mary Helms and Marie Schneider, parents who initially challenged the program, said that it would be impossible to tell whether religious schools were using government-provided computers for strictly secular purposes. Short of giving schools computers without Internet access, which he conceded would “defeat the whole purpose,” Boothby said that there is no reliable way to monitor how the computers were being used. And since computers have virtually limitless uses, they could easily be diverted into a mission of faith. In a 6-3 vote, the Supreme Court reversed the court of appeals’ decision. Justice Clarence Thomas authored the plurality opinion, in which he was joined by Chief Justice William H. Rehnquist and Justices Antonin Scalia and Anthony M. Kennedy. The Court concluded that Chapter 2, as applied in Jefferson Parish, is not a law respecting an establishment of religion simply because many of the private schools receiving Chapter 2 aid in the parish are religiously affiliated. U.S. v. Playboy Entertainment Group Inc ., U.S., No. 98-1682, 5/22/00. The U.S. Supreme Court held 5-4 May 22 that Congress violated the First Amendment by requiring cable operators, in Section 505 of the 1996 Telecommunications Act, to either limit sexually explicit networks to late-night hours or to fully scramble or block those channels for viewers who do not want them. Court observers said the Court’s ruling about the cable portion of the act could result in less government regulation of the Internet because of the Court’s reasoning that cable provides greater means of individual control than broadcast. The Court upheld a 1998 ruling by the U.S. District Court of the District of Delaware that such a “content-based restriction on speech” is unconstitutional because the government could advance its interests in “less restrictive ways.” Writing for the majority, Justice Anthony Kennedy said the government had not proved its case that the less intrusive option of cable operators’ providing a free channel-blocking device to any subscriber requesting it would be ineffective. Observers said Justice Kennedy’s analysis toppled several rationales commonly used to defend Internet and commercial speech restrictions. The Court affirmed that the importance of the government’s objective — shielding children from indecent speech entering the home — did not justify a relaxed standard of First Amendment review. The Court had previously affirmed this principle in Reno v. ACLU, 521 U.S. 844 (1997), striking down another Communications Decency Act provision that prohibited the knowing transmission to minors of “indecent” communications over the Internet. The Court also rejected the government’s argument that � 505 was analogous to the adult bookstore zoning ordinances upheld in Renton v. Playtime Theatres, 475 U.S. 41 (1986), and Young v. American Mini Theatres, 427 U.S. 50 (1976). Such ordinances, the court explained, survive First Amendment review when enacted to prevent harmful “secondary effects” of such establishments (e.g., crime and declining property values), not harmful effects of the speech itself. Sporty’s Farm LLC v. Sportsman’s Market Inc. , U.S., No. 99-1752, cert. denied 6/26/00. There was no hope of Christmas in July for a Pennsylvania Christmas tree farm as the U.S. Supreme Court June 26 denied it certiorari in a domain name dispute. The suit concerned the use of the domain name sportys.com. Sportsman’s Market Inc., a mail order catalog company that sells aviation products, tools, and home accessories, used the logo “sporty” to identify its catalogs and products. Sportsman’s registered the trademark “Sporty’s” with the U.S. Patent and Trademark Office in 1985. Omega Engineering Inc., also a mail order catalog company, entered into the aviation catalog business and registered the domain name “sportys.com.” In January 1996, Omega formed a subsidiary called Sporty’s Farm LLC to sell Christmas trees and sold the “sportys.com” domain name to the new company. Sporty’s Farm brought a declaratory judgment suit, seeking the right to use the domain name. Sportsman’s counterclaimed and also sued Omega as a third-party defendant for trademark dilution, trademark infringement, and unfair competition under state law. Both sides sought injunctive relief. The U.S. District Court for the District of Connecticut decided that the Anticybersquatting Protection Act governed this case and that it was appropriate for the appellate court to apply it directly. Judge Guido Calabresi, writing for the 2nd U.S. Circuit Court of Appeals, said there was overwhelming evidence of “bad faith,” writing, “it cannot be doubted � that Omega registered sportys.com for the primary purpose of keeping Sportsman’s from using that domain name.” In petitioning for certiorari to the Supreme Court, Sporty’s Farm argued that the Second Circuit should have returned the case to the district court and that forcing Sporty’s Farm to give up its Internet domain name was unlawful taking of property without compensation, in violation of its Fifth Amendment rights. Celpage v. FCC, U.S., No. 99-1072, cert. denied 5/30/00. The Court denied certiorari May 30 to a dispute over federal rules intended to keep telephone service affordable in high-cost areas and to subsidize Internet hookups for schools and libraries. The case was an appeal by Celpage Inc., a paging service company in Puerto Rico and the U.S. Virgin Islands, challenging Federal Communications Commission rules requiring all telecommunications companies to contribute to the universal-service subsidies based on their revenue. The rules, which were developed by the FCC as directed by Congress as a result of the passage of the 1996 Telecommunications Act, require that phone carriers’ contributions to high-cost customers should be based only on the carriers’ interstate revenue, while their contributions to the Internet hookup program would be based on both interstate and in-state revenue. Subsidies given to companies serving high-cost customers would be based mainly on the future cost of providing such service. Also, under the rules’ E-rate, funded by the subsidy, schools and libraries are eligible to receive discounts for phone services, Internet access and internal connections. Celpage and 33 other private and public telecommunications firms challenged the FCC rules. The 5th Circuit, in Celpage v. FCC, 183 F.3d 393 (5th Cir. 1999), generally upheld the FCC rules when it rejected the plaintiffs’ argument that paging companies should not have to help pay for subsidies and upheld the rules for subsidies to high-cost areas. However, it said the contributions for Internet hookups could be based only on companies’ interstate revenue. The Supreme Court took no action on similar appeals pending from AT&T, MCI WorldCom and GTE. Lunney v. Prodigy Servs. Co. , U.S., No. 99-1430, cert. denied, 5/1/00. The Court on May 1 denied certiorari to a New York Court of Appeals ruling that Internet service providers are not legally and financially liable when someone is defamed in e-mail communications or bulletin board messages. The Court let stand the appeals court decision stemming from threatening and profane e-mail messages that an impostor posted in 1994 in the name of Alexander Lunney, who was then 15 and a New York high school student. In its petition for certiorari, attorneys for Lunney called the case “the most egregious of a series of Internet-related liability cases that have developed an enlarging rule of law that totally immunizes non-carrier, proprietary online services from virtually any � liability.” After the court denied certiorari, Robert Lunney, the plaintiff’s father, told the press that the U.S. legal system was “an imperfect world.” “You and I can be the victim of something like this tomorrow,” Lunney said.

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