Tech Law Journal Daily E-Mail Alert
May 17, 2001, 8:00 AM ET, Alert No. 189.
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New Bills
5/15. Rep. Jerry Weller (R-IL) and 20 other Representatives introduced HR 1835, a bill to amend the Internal Revenue Code of 1986 to exclude from gross income computers and Internet access provided by an employer for the personal use of employees. The bill was referred to the House Ways and Means Committee, of which Rep. Weller is a member.
5/15. Rep. Barney Frank (D-MA) and Rep. Jim McGovern (D-MA) introduced HR 1842, the Cable Consumer Rights Act of 2001, a bill to reinstate the authority of the FCC and local franchising authorities to regulate the rates for cable TV service. The bill was referred to the House Commerce Committee, where it is unlikely to see any action. Rep. Frank said this: "After 5 years of de-regulation we have learned that the problem was not too much FCC action, but too little." See, Frank release. The bill would repeal Subsection (b) of Section 301 of the Telecommunications Act of 1996.
5/15. Rep. Felix Grucci (R-NY) introduced HR 1846, a bill to amend Section 254 of the Communications Act of 1934 to require schools and libraries receiving e-rate subsidies to block access to Internet services that enable users to access the web and transfer e-mail in an anonymous manner. It was referred to the House Commerce Committee.
5/15. Rep. Nancy Johnson (R-CT), Rep. Bob Matsui (D-CA), and Rep. Pete Sessions (R-TX) introduced HR 1848, a bill to amend the Internal Revenue Code of 1986 to more accurately codify the depreciable life of semiconductor manufacturing equipment. The bill was referred to the House Ways and Means Committee; Johnson and Matsui are both senior members of the Committee.
5/14. Kenneth Juster was sworn in as the Under Secretary of Commerce for Export Administration. Juster was previously a partner in the Washington DC office of the law firm of Arnold & Porter, where he handled international trade and transactions, and international arbitration and litigation. He worked for Lawrence Eagleburger at the State Department during the administration of the elder Bush.
FCC Ownership Rules
5/16. The FCC released a Report and Order [PDF] that amends its "dual network" rule to permit one of the four major television networks -- ABC, CBS, Fox or NBC -- to own, operate, maintain or control the UPN and/or the WB television network. The FCC had announced, but not released, this Order at its April 19 meeting. See, FCC release. Commissioner Tristani dissented; see, statement.
Bell News
5/16. Mark Cooper, of the Consumer Federation of America, a Washington DC based interest group, submitted a reply comment [PDF] to the FCC opposing SBC's Section 271 petition to provide interLATA long distance telephone service in the state of Missouri. He argued that "SBC has not provided parity in provisioning DSL loops to competitive local exchange carriers (CLECs)." He added that "Prematurely allowing incumbent local companies into the in-region long distance market undermines the prospects for competition." See, CC Docket No. 01-88.
5/16. The Missouri Office of Public Counsel also submitted a reply comment to the FCC regarding SBC's Missouri application. It stated that the U.S. Department of Justice (DOJ) filing was "squarely on point." On May 10, the Antitrust Division of the DOJ submitted an analysis to the FCC in which it recommended that the FCC should independently review the prices that SBC charges its competitors for use of its network. The DOJ stated that many of the prices charged by SBC for the use of "unbundled network elements" are significantly higher in Missouri than in states where SBC has already been permitted to provide long distance service.
5/16. BellSouth asked the Public Service Commission of South Carolina to permit it to provide long distance service in the state. See, release.
5/17. The House Commerce Committee's Telecom Subcommittee will hold a hearing HR 1765, a bill to increase penalties for common carrier violations of the Communications Act of 1934.
New Documents
Weller: HR 1835, a bill to exclude from gross income computers and Internet access provided by an employer, 5/15 (HTML, LibCong).
Frank: HR 1842, a bill to re- regulate cable TV prices, 5/15 (HTML, LibCong).
Muris: prepared statement to Senate Commerce Committee, 5/16 (PDF, SCC).
Quote of the Day
"The private sector plays the dominant role in the process of developing new technology and bringing it to market. But the Federal government plays a key role in creating an environment that supports the private sector's efforts, making a strategic public- private partnership essential."

Bruce Mehlman, nominee for Assistant Secretary of Commerce for Technology Policy, prepared statement for confirmation hearing, May 16.
Muris Confirmation Hearing
5/16. The Senate Commerce Committee held a hearing on the nomination of Timothy Muris to be Chairman of the Federal Trade Commission. The hearing, which covered several other nominees as well, went smoothly for Muris, and all nominees. Republicans and Democrats expressed their support. Committee Chairman John McCain (R-AZ) said "I look forward to moving these nominations quickly." He added that the Committee will likely vote next week. See also, prepared statement of McCain.
The FTC is important to technology because of its antitrust authority; it is one of three agencies exercising antitrust merger review authority over transactions involving technology companies. It is also important because of its consumer protection authority. It has taken action against online fraud under Section 5 of the Federal Trade Commission Act. It has also advocated that Congress pass legislation giving it authority to regulate online privacy.
Muris Biography. Muris held several top positions at the FTC during the Reagan administration, including Director of the Bureau of Competition, Director of the Bureau of Consumer Protection, and Assistant to the Director of the Office of Policy, Planning & Evaluation. He was also Deputy Counsel to President Reagan's Task Force on Regulatory Relief and Executive Associate Director of the Office of Management & Budget. Prior to being nominated to be FTC Chairman, Muris was a professor at George Mason University School of Law.
Views on Antitrust. Muris said little about how he would act as Chairman. He addressed antitrust law in his opening statement. He read a prepared statement [PDF]: "Regarding antitrust, bipartisan consensus also exists. Although there is disagreement about cases at the margin, there is widespread agreement that the purpose of antitrust is to protect consumers, that economic analysis should guide case selection, and that horizontal cases, both mergers and agreements among competitors, are the mainstays of antitrust. Moreover, today there is bipartisan recognition that antitrust is a way of organizing our economy. A freely functioning market, subject to the rules of antitrust, provides maximum benefit to consumers." Sen. Ernest Hollings (D-SC), the ranking Democrat on the Committee, pressed him on this topic; but he stated little else. Muris did add that "I do think that one has to look closely at monopolization" and "there are good monopolization cases, and I would have no hesitation to bring a good case, if I thought it was a good case."
Views on Online Privacy. Sens. McCain and Hollings both asked about online privacy. McCain asked, "Do you agree with the FTC's recommendation that Congress should enact legislation to regulate the collection and use consumer information on line?" Muris did not take a position. "Obviously, it is a very important question. And, I think the FTC has done several very beneficially things. It has provided information to the Congress and to the public. It has been partly responsible for making the issue as prominent as it is. It has brought important cases, I think, in the areas of deceptive and fraudulent spam, in pretexting, and identity theft. It has had an excellent roll in that. ... The specific issue of legislation is a new issue to me, and I have been, I've been studying it. I think it is a very complex issue, and at this time I have no specific legislative recommendation. But, it is one that I would hope to be educated on by Members of Congress, by privacy advocates, by business groups, and by my future colleagues, if confirmed. Sen. Hollings pursued the issue further, but Muris said little else. He added that "the issue is really new to me" and "I am not yet ready to say which type of legislation, if any, is preferable."
Mehlman Confirmation Hearing
5/16. The Senate Commerce Committee also held a hearing on the nomination of Bruce Mehlman to be Assistant Secretary of Commerce for Technology Policy. His hearing went smoothly. Like Muris, he said little.
OTP. The Department of Commerce describes the role of the Office of Technology Policy (OTP) as follows: "to work in partnership with the private sector to develop and advocate national policies and initiatives that maximize technology's contribution to U.S. economic growth". The OTP conducts no licensing. It has no rule making or adjudicatory authority. It does not hand out grants. It does not administer programs. Essentially, it studies and advocates.
Mehlman Biography. Until recently, Mehlman was Telecommunications Policy Counsel for Cisco Systems. Before that, he worked as General Counsel and Policy Director to the House Republican Conference, which is headed by Rep. J.C. Watts (R-OK). He worked on Y2K and other high tech issues. He also previously worked as Legal Counsel to the National Republican Congressional Committee (RNCC), where he specialized in compliance with the Federal Election Campaign Act (FECA) and Federal Election Commission (FEC) regulations, and other political issues.
Bruce Mehlman is also another former associate of the law firm of Wiley Rein & Fielding to be named to a top technology post this year. Others include Kevin Martin and Brian Tramont. Martin, one of President Bush's nominees for FCC Commissioner, has his confirmation hearing before the Senate Commerce Committee today. Tramont was appointed Chief of Staff of the FCC's Wireless Telecommunications Bureau last week.
Views on Privacy. Sen. McCain asked Mehlman about his views on online privacy. Mehlman stated, "I probably can't come here today with the silver bullet solution". However, he promised to cooperate with the Congress, industry and consumer representatives.
Internet Taxes. Sen. George Allen (R-VA) asked him about Internet taxation. Mehlman said "I think the voice that has been heard across the Congress and the industry, we want to go slow with this new very promising medium, and not rush into taxation until the impact (inaudible phrase) has been the right approach."
Intellectual Property. Sen. Allen also asked him about his role in the protection of intellectual property of American companies abroad. Mehlman said that "the protection of intellectual property rights is essential to promote the creative process and make investments in a lot of technology and a lot of innovation worthwhile. At the same time, online media present new challenges."
See also, TLJ story, "Cisco Lobbyist Addresses High Tech Policy Issues", Oct. 20, 2000.
The Senate will take up the Tax Reconciliation bill.
9:30 AM. The Senate Commerce Committee held a hearing on on nominations for the FCC. Location: Room 253, Russell Building. The agenda includes:
  Michael Powell to be FCC Chairman.
  Kathleen Abernathy to be a FCC Commissioner.
  Kevin Martin to be a FCC Commissioner.
  Michael Copps to be a FCC Commissioner.
10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing HR 1765, a bill to increase penalties for common carrier violations of the Communications Act of 1934. Location: Room 2123, Rayburn House Office Building. The scheduled witnesses are:
  David Solomon (Chief, FCC Enforcement Bureau)
  Albert Halprin (Halprin Temple)
  Lawrence Sarjeant (VP, Regulatory Affairs, USTA).
  Royce Holland (C/CEO, Allegiance Telecom).
10:00 AM. The Senate Judiciary Committee has scheduled an executive business meeting. The Committee may vote on the nomination of Ted Olson to be Solicitor General. The Committee may also mark up S 487, the Technology, Education and Copyright Harmonization Act of 2001 (TEACH Act), a bill to amend the exemption to copyright infringement for education purposes to include certain online educational activities. This Committee often postpones matters. Location: Room 226, Dirksen Building.
10:00 AM. The Senate Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary will hold a hearing on proposed budget estimates for FY 2002 for the FBI, Drug Enforcement Administration, and INS. Location: Room 192, Dirksen Building.
10:00 AM. The Senate Governmental Affairs Committee will hold a hearing on several nominations, including that of John Graham to be Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget. Location: Room 342, Dirksen Building.
POSTPONED. 10:00 AM. The House Government Reform Committee's Subcommittee on Government Efficiency, Financial Management, and Intergovernmental Relations will hold a hearing titled "Are Classified Computer Systems in the Federal Government Adequately Protected?" It will meet in open session at 10:00 AM, and in closed session at 1:30 PM. Location: Room 2247, Rayburn Building.
1:00 PM. The House Judiciary Committee's Subcommittee on the Courts, the Internet, and Intellectual Property will hold a hearing titled Music On The Internet. Location: Room 2141, Rayburn Building.
Trade and Fast Track
5/14. Commerce Secretary Donald Evans gave a speech in Washington DC in which he advocated free trade, and fast track trade promotion authority for the President.
5/15. Rep. Marcy Kaptur (D-OH), a leading protectionist in the House, gave an speech in the House in which she criticized President Bush's request for "fast track," now also called "trade promotion authority." She stated that Bush "knows that Congress has repeatedly rejected Fast Track, most recently in 1998. He also knows that he does not have the support or votes in this Congress to pass this misguided approach. ... Without congressional oversight and input, trade agreements will be negotiated by unrepresentative delegates, who were never elected, standing up for the rights of international corporations, instead of our hardworking constituents, not to mention that a thing called the Constitution of the United States grants to Congress the right to regulate commerce with foreign nations."
5/16. The Senate Finance Committee held a confirmation hearing on many nominations, including Linnet Deily and Peter Allgeier to be Deputy USTRs. See, statement [PDF] by Sen. Charles Grassley (R-IA), Chairman of the Committee.
SEC and Revenue Recognition
5/16. The SEC instituted an administrative proceeding against Microtest alleging that it improperly recognized revenue from sales in various quarterly and year end reports filed with the SEC, in violation of 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, and 13a-13 thereunder. Microtest and the SEC simultaneously settled the matter, with Microtest agreeing to cease and desist from violating these sections and rules. See, SEC release. Microtest, which is based in Phoenix, Arizona, makes network test and measurement products and network storage and appliance servers.
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