Tech Law Journal Daily E-Mail Alert
June 13, 2001, 8:00 AM ET, Alert No. 207.
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House Committee Holds Hearing on Export Controls
6/12. The House International Relations Committee held a hearing on the Export Administration Act, which expired in 1990. Since then the administration has used a series of temporary emergency powers to continue its export control regime. The current extension expires on August 20. There is legislation pending to extend the act, and reform the export control regime.
Rep. Henry Hyde (R-IL), the Chairman of the Committee, presided. He said in his opening statement that "we face a growing proliferation threat from countries on our terrorism list, such as Iran, Iraq, Libya and North Korea, but we also confront a resurgent China -- a country whose marketplace attracts our high-tech companies and whose military build-up concerns our defense planners." Rep. Tom Lantos (D-CA), the ranking Democrat, was also active at the hearing, which was sparsely attended by other members of the Committee.
The Committee heard from and questioned two panels of witnesses. First, there was a legislative panel made up of Sen. Phil Gramm (R-TX), Sen. Fred Thompson (R-TN), and Rep. Chris Cox (R-CA). Second, the Committee heard from a panel made up of Richard Cupitt (University of Georgia), Paul Freedenberg (Association for Manufacturing Technology), and Dan Hoydish (UNISYS). See, prepared statements of Cupitt, Freedenberg, and Hoydish.
Sen. Gramm advocated reforming the export control regime to try to meet two objectives. Gramm stated that America's objectives are to "dominate the world in terms of high tech production and technology". Also, "as the the world's only superpower ... we want to protect those items that have a substantial impact potentially on our national security." He advocated passage of S 149, the Export Administration Act of 2001, sponsored by Sen. Mike Enzi (R-WY). It would ease restraints on the export of most dual use products, such as computers and software. The Senate Banking Committee approved S 149 by a vote of 19 to 1 on March 22. Gramm stated that there are now 90 to 95 votes in the Senate to pass the bill.
Sen. Thompson testified in opposition to the Export Administration Act of 2001. He raised several specific objections. He stated that the bill's definition of "foreign availability" is too broad. He that the standard imposed upon the President to stop export of items subject to foreign availability is too high. He stated that he wants the Defense Department to have more of a say in the process. He also wants a "blue ribbon commission" to study the issue before the Congress acts. He added that the opponents of the bill in the Senate include Senators Helms, Kyl and Shelby.
Rep. Cox testified regarding the technology acquisition program of the People's Republic of China. He stated that under the current system, "we are achieving the worst of all possible worlds". He stated that the U.S. is gaining little security from its current export control regime. He advocated moving from a unilateral to a multilateral system.
Deadlines Set for FNPRM on Spread Spectrum Devices
6/12. The FCC published a Further Notice of Proposed Rulemaking (FNPRM) in the Federal Register regarding spread spectrum devices. This FNPRM proposes to revise the rules for frequency hopping spread spectrum systems operating in the 2.4 GHz band to reduce the amount of spectrum that must be used with certain types of operation, and to allow new digital transmission technologies to operate pursuant to the same rules as spread spectrum systems. This FNPRM was adopted by the FCC on May 10. This publication also sets deadlines for comments. Comments must be filed on or before August 27, 2001, and reply comments must be filed on or before September 25, 2001. See, Federal Register, June 12, 2001, Volume 66, Number 113, at Page 31585 - 31589. (ET Docket 99-231.)
Frequency hopping spread spectrum technology is used to increase bandwidth in wireless computer local area networks and wireless cable modems. Many technology companies plan to produce Internet devices, computer peripherals, hardware components, software, or services in this new market. Wire networks are often too expensive or too complicated for residential customers and small businesses.
New Documents
Muris: speech re Pitofsky and antitrust, 6/12 (HTML, FTC).
Tauzin: letter to SEC re regulation of financial portals, 6/12 (HTML, TLJ).
FCC: Further Notice of Proposed Rulemaking re spread spectrum devices, 6/12 (TXT, FedReg).
Hazlett: letter to House Judiciary Committee re testimony of Glassman, 6/12 (HTML, TLJ).
Muris Praises Pitofsky and Comments on Antitrust
6/12. The new Federal Trade Commission Chairman, Timothy Muris, gave a speech at the National Press Club in Washington DC in which he praised former FTC Chairman Robert Pitofsky. He reviewed Pitofsky's role in reforming the FTC over the last 30 years, and his tenure as Chairman for the last 6 years. Muris also added a few comments about his views on antitrust law, and the application of antitrust law to intellectual property. See also, FTC release.
Muris addressed the role of economics in antitrust. "I believe that economics has a crucial role in informing the FTC's judgment about how best to carry out its mission. Modern discussion about developments in industrial organization economics often focuses on putting economic ideas into allegedly neat "Chicago" and "Post-Chicago" compartments. This is a sterile exercise. Regarding antitrust, we must have solid economic analysis that is firmly grounded in facts and real world institutions. These traits characterize what might simply be called good economics, rather than economics of any 'school.' "
Muris continued that "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 benefits to consumers."
Finally, Muris touched on intellectual property. He stated: "No field of law better demonstrates the Pitofsky Commission's willingness to engage difficult and complex matters than the relationship between antitrust doctrine and intellectual property. In these and other areas, the Commission confronted special challenges posed by innovation competition, e-commerce, globalization, and rapid technological change. Although I have disagreed with some of the Pitofsky Commission's initiatives here, we agree that the potential for anticompetitive abuse of intellectual property is an increasingly important area. While recognizing the necessity of protecting valid intellectual property rights, future Commissions will no doubt remain active."
Tauzin Opposes SEC Regulation of Financial Portals
6/12. Rep. Billy Tauzin (R-LA), Chairman of the House Commerce Committee, wrote a letter to Acting SEC Chairman Laura Unger stating that "The SEC needs to be careful not to create the impression that it is considering regulation of Internet portals. Internet portals do not fall within the jurisdiction of the SEC. Absent direction from Congress, there is no basis for the SEC to extend regulation to Internet portals."
The SEC held a public roundtable on May 23 on the issue of regulating financial portals as broker dealers. Also, on March 2, Unger gave a speech on this topic. She stated that "Financial portals provide a central location where investors can find all types of financial information and portfolio analysis tools. They can aggregate their financial account data, and they can also click on hyperlinks to broker-dealer websites to open brokerage accounts and enter trades. ... But as portals have gained in popularity, with Yahoo! Finance and other financial portals becoming household words, broker-dealers are increasingly finding themselves competing with the financial portals for customers. At least one of the questions broker-dealers ask is why aren't the portals registered? My first question, though, is: what are the portals doing? What are their relationships with the broker-dealers they hyperlink to? What are their business arrangements and compensation arrangements? How do the hyperlinks work, and what do they look like? "
Tauzin Dingell News
6/13. The House Judiciary Committee is scheduled to mark up HR 1542, the Tauzin Dingell bill, and HR 1698, the Cannon Conyers bill, at 10:00 AM on Wednesday, June 13.
6/12. American Enterprise Institute (AEI) Resident Scholar Tom Hazlett wrote a letter to House Judiciary Committee Chairman James Sensenbrenner (R-WI) disputing the June 5 testimony of AEI Resident Fellow James Glassman at the Committee's hearing on HR 1542. Glassman criticized HR 1542 and stated that market uncertainty resulting from House consideration of HR 1542 has reduced the flow of investment capital to CLECs and driven down CLEC stock prices.
Wednesday, June 13
10:00 AM. The House Judiciary Committee will meet to mark up HR 1542, the Tauzin Dingell bill, and HR 1698, the Cannon Conyers bill. Location: Room 2141, Rayburn Building.
10:00 AM. The Senate Banking Committee will hold a hearing on the nomination of Roger Ferguson to be a Member of the Board of Governors of the Federal Reserve System. Ferguson, who is currently a Governor, was the Board of Governors' point man on Year 2000 conversion preparations. Sen. Paul Sarbanes (D-MD), the new Chairman of the Committee, will preside. See, notice. Location: Room 538, Dirksen Building.
10:00 AM - 12:00 NOON. The House Science Committee will meet to mark up HR 100, the National Science Education Act, sponsored by Rep. Vern Ehlers (R-MI), and HR 1858, the National Mathematics and Science Partnerships Act, sponsored by Rep. Sherwood Boehlert (R-NY). Location: Room 2318, Rayburn Building.
10:00 AM. The FCC's Office of Engineering and Technology will host the first meeting of the Technological Advisory Council under its new charter. Location: FCC, 445 12th Street, SW, Washington, DC. See, FCC notice.
12:30 PM. The Federal Communications Bar Association's Transactional Practice Committee will host a brown bag lunch titled Factors Used to Value Communications Properties. Location: Dow Lohnes, Conference Center, Eighth Floor, 1200 New Hampshire Ave., NW, Washington DC. RSVP to John Logan.
Deadline for submitting petitions to the USTR regarding the 2001 Annual GSP Product and Country Eligibility Practices Review. See, notice in the Federal Register, April 13, 2001, Vol. 66, No. 72, Pages 19278 - 19279.
Thursday, June 14
9:30 AM. The FCC will hold a meeting. Location: FCC, Portals II, Room TW-C305 (Commission Meeting Room), Washington DC.
9:30 AM - 3:30 PM. The U.S. State Department's International Telecommunication Advisory Committee (ITAC)-- Telecommunication Standardization Sector (ITAC-T) Study Group B will meet. The purpose of the ITAC is to advise the State Department on policy and technical issues with respect to the International Telecommunication Union and international telecommunication standardization and development. See, notice in Federal Register, May 23, 2001, Vol. 66, No. 100, at Page 28591. Location: Department of Commerce, Room B841A, 1401 Constitution Ave, NW, Washington DC.
9:30 AM. The Senate Government Affairs Committee's Subcommittee on Investigations will hold the first of two hearings on cross border fraud, focusing on U.S. Canadian law enforcement cooperation. Location: Room 342, Dirksen Building.
10:00 AM. The House Judiciary Committee's Subcommittee on Crime will hold an oversight hearing titled "Fighting Cyber Crime: Efforts by Private Business Interests." Location: Room 2237, Rayburn Building.
10:00 AM. The House Commerce Committee's Telecom Subcommittee will hold a hearing titled "Ensuring Compatibility with Enhanced 911 Emergency Calling Systems: A Progress Report." Location: Room 2322, Rayburn Building. The scheduled witnesses are: Michael Amarosa (True Position), Steve Clark (U.S. Cellular), James Nixon (VoiceStream), Andrew Rimkus (Airbiquity), Steve Souder (9-1-1 Emergency Communications Center), Thomas Sugrue (FCC Wireless Telecommunications Bureau).
10:00 AM. The FTC and other agencies will hold a press conference to announce legal actions taken regarding fraudulent marketing of supplements and other health products on the Internet. The participants will include FTC Chairman Timothy Muris and Director of the FTC Bureau of Consumer Protection Howard Beales. See, FTC notice. Location: Room 432, FTC, 600 Pennsylvania Avenue, NW, Washington DC.
More News
6/7. The U.S. District Court (CDCal) entered judgment in SEC v. Reed Slatkin, a civil securities fraud action. The Court enjoined Slatkin from violating the antifraud provisions of federal securities laws, ordered him to disgorge ill gotten gains, and ordered him to pay of civil penalties. Slatkin is also a co-founder, former director and substantial shareholder of Earthlink. See, SEC release.
6/12. Verizon filed a complaint in U.S. District Court (NDCal) against Covad alleging that it falsified complaints about Verizon's service. Covad is a competitive DSL service provider. See, Verizon release.
6/12. The House Judiciary Committee's Subcommittee on the Constitution held an oversight hearing titled "Constitutional Issues Raised by Recent Campaign Finance Legislation Restricting Freedom of Speech."
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