Tech Law Journal Daily E-Mail Alert
November 15, 2001, 9:00 AM ET, Alert No. 309.
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US EU Antitrust Divergence
11/7. William Kolasky, Deputy Assistant Attorney General in the Antitrust Division, gave a speech titled "Conglomerate Mergers and Range Effects: It is a Long Way from Chicago to Brussels". He criticized the EU's rejection of the GE Honeywell merger, and stated that "we view the EU approach to conglomerate mergers as inconsistent with the central tenet of U.S. antitrust policy -- that the antitrust laws protect competition, not competitors."
He stated that there is "a sharp divergence between the U.S. and the EU" in "the reasons we challenge horizontal and vertical mergers". Specifically, "We challenge horizontal mergers because they eliminate a competitor and may thereby enable the merged firm to restrict output and raise price. Similarly, we challenge vertical mergers that eliminate a key supplier or customer where doing so may give the merged firm the ability and incentive to raise its rivals' costs, again allowing them to restrict output and raise price. By contrast, in its conglomerate merger decisions, the EU prohibits mergers because they will make the merged firm a stronger competitor that may ultimately be able to drive rivals from the market. Under this scenario the immediate effect of the merger is to reduce prices and increase output, with the anti competitive effect occurring only if the other competitors cannot match the merged firm's offerings and exit the market."
He said that this divergence is "very troubling for at least three reasons." First, "there are serious externalities", because the EU "denies consumers around the world the benefits the merger might have delivered." Second, this divergence will "increase the transactions costs associated with the merger clearance process. The result may well be to deter mergers that would have been pro competitive and efficiency enhancing." Third, it "undermines the strong political consensus supporting vigorous antitrust enforcement".
Rep. Cubin Introduces Bill to Limit Right of Way Costs
11/8. Rep. Barbara Cubin (R-WY) introduced HR 3258, the Reasonable Right of Way Fees Act of 2001. The bill would amend the Federal Lands Policy and Management Act of 1976 with respect to determining the value of rights of way. The bill states that its purpose is "to prevent unreasonable increases in certain costs in connection with the deployment of communications and other critical infrastructure."
CompTel Addresses Broadband Rights of Way
11/14. The Competitive Telecommunications Association (CompTel) issued a release regarding rights of way. It wrote that "The bureaucratic morass of permits and licenses and building codes has received less attention than the more visible problems of lack of local loop competition, but the problems over public rights of way have created serious paralysis in broadband deployment. Instead of getting services to customers, providers are finding themselves stuck in halls of local and state governments, trying to negotiate through a maze of permit and licensing arrangements."
CompTel also released a twelve point list titled "Public Rights of Way Principles". Among its recommendations are the following: "Rights of way access shall extend to all entities which provide intrastate, interstate or international telecommunications or telecommunications services or deploy facilities used directly or indirectly in the provision of such telecommunications or telecommunications services. In exercising its legitimate management authority, a government entity should ensure that service providers have reasonable and non-discriminatory access to public rights of way. A government entity's authority to manage the rights of way shall not include regulatory control over the providerís operations and services."
GAO Releases Report on Internet Backbone Market
11/14. The GAO released a report [PDF] titled "Characteristics and Competitiveness of the Internet Backbone Market". The report summarizes the physical structure of interconnection, and the two types of financial arrangements for interconnection among backbone providers -- peering and transit.
The report also states that "No publicly available data exist to allow a precise economic evaluation of the competitiveness of the Internet backbone market." It does relate, however, that industry participants view the backbone market as competitive, and more competitive now that a few years ago. The report further recommends that "the FCC periodically evaluate whether existing data collection efforts are providing needed information on the Internet backbone market and, if deemed appropriate, exercise its authority to establish a more formal data collection program."
The report also states that the "Future evolution of this market is likely to be largely affected by two types of emerging services. First, demand is likely to increase for time sensitive applications, such as Internet voice service. Second, it is expected that more 'broadband' -- bandwidth intensive -- content, such as video, will flow over the Internet in the coming years."
This 43 page report was prepared for Sen. Herb Kohl (D-WI) and Sen. Mike DeWine (R-OH), the Chairman and ranking Republican, respectively, of the Senate Judiciary Committee's Subcommittee on Antitrust, Business Rights and Competition.
Senate Holds Hearing on Biometric Identifiers
11/14. The Senate Judiciary Committee's Technology, Terrorism, and Government Information Subcommittee held a hearing on biometric identifiers. See, prepared testimony of witnesses: Michael Kirkpatrick (FBI), Monte Belger (FAA), Valerie Lyons (Identix), Bill Willis (Iridian Technologies), Martin Huddart (Recognition Systems), Richard Haddock (LaserCard Systems), Joanna Lau (Lau Technologies). See also, prepared statement of Sen. Orrin Hatch (R-UT).
People and Appointments
11/14. Linda Blair was named Deputy Chief of the FCC's Enforcement Bureau. She was previously Associate Chief of the Bureau. She will be responsible for overseeing the Bureau's regional and field offices, its Technical and Public Safety Division, and the broadcast and other Title III responsibilities of the Investigations and Hearings Division. She will also be a Deputy on the Commission's new Homeland Security Policy Council. She has worked for the FCC since 1988.
11/14. Andrew Oosterbaan was named Chief of the Child Exploitation and Obscenity Section (CEOS) of the Criminal Division of the Department of Justice. He has worked in the CEOS since January of 2000. The DOJ stated in a release the Oosterbaan "helped devise, implement, and manage Operation Avalanche, a first of its kind undercover initiative involving unprecedented cooperation between local, state, and federal law enforcement to protect children in cyberspace by targeting thousands of subscribers to online child pornography web sites."
Tauzin Dingell Bill News
11/14. CEOs of 107 telecom companies sent a letter [PDF] to House Speaker Denny Hastert opposing HR 1542, the Tauzin Dingell bill, and requesting that it not be brought to the House floor for a vote. They wrote that "If enacted into law, its consequences would be devastating for our New Economy companies and consumers. ... H.R. 1542 could create the worst possible scenario -- four megacompanies each possessing an unregulated monopoly over local telephone services and Internet access."
Robert McCormick, P/CEO of the USTA, a group that represents ILECs, released a rebuttal statement. He argued that "By declaring the market for high speed Internet services to be a free market, the Tauzin Dingell bill eliminates the barriers to investment in broadband, unleashing opportunities throughout the telecom and technology sectors."
WTO Members Agree to Launch New Round of Trade Negotiations
11/14. 142 countries participating in the World Trade Organization (WTO) meeting in Doha, Qatar, adopted a declaration [PDF] in which they agreed to begin a new round of global trade negotiations. See, WTO release. Among the topics to be negotiated are e-commerce, antitrust policy, trade in services, and TRIPS.
Promoting E-Commerce; Duties on E-Commerce. Paragraph 34 of the declaration states, in full: "We take note of the work which has been done in the General Council and other relevant bodies since the Ministerial Declaration of 20 May 1998 and agree to continue the Work Programme on Electronic Commerce. The work to date demonstrates that electronic commerce creates new challenges and opportunities for trade for Members at all stages of development, and we recognize the importance of creating and maintaining an environment which is favourable to the future development of electronic commerce. We instruct the General Council to consider the most appropriate institutional arrangements for handling the Work Programme, and to report on further progress to the Fifth Session of the Ministerial Conference. We declare that Members will maintain their current practice of not imposing customs duties on electronic transmissions until the Fifth Session."
Services. Paragraph 15 addresses "negotiations on trade in services". USTR Robert Zoellick stated that "In the area of services, we're very pleased, because the declaration sets the stage for a commencement of negotiations on new liberalization commitments on sectors that would include telecommunications, financial services, energy, audio visuals, express delivery -- but much of the focus is on other sectors. It's worth recording that these negotiations are really important to our long-term growth because the service sector now represents 62 percent of the U.S. economy." See, transcript.
Antitrust Policy as Trade Barrier. Paragraphs 23-25 provide that negotiations will take place on the "interaction between trade and competition policy". Paragraph 25 states, in part, that "In the period until the Fifth Session, further work in the Working Group on the Interaction between Trade and Competition Policy will focus on the clarification of: core principles, including transparency, non-discrimination and procedural fairness, and provisions on hardcore cartels; modalities for voluntary cooperation; and support for progressive reinforcement of competition institutions in developing countries through capacity building."
TRIPS and Pharmaceutical Patents. Paragraphs 17-19 address the TRIPS Agreement. Paragraph 17 states, in full, that "We stress the importance we attach to implementation and interpretation of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) in a manner supportive of public health, by promoting both access to existing medicines and research and development into new medicines and, in this connection, are adopting a separate Declaration."
Technology Transfers. Paragraph 37 provides that "We agree to an examination ... of the relationship between trade and transfer of technology, and of any possible recommendations on steps that might be taken within the mandate of the WTO to increase flows of technology to developing countries."
President Bush. Bush stated that "I commend the decision by the world's trading nations, meeting in Qatar, to launch a new round of global trade negotiations.  This bold declaration of hope by the World Trade Organization (WTO) has the potential to expand prosperity and development throughout the world and revitalize the global economy.  It also sends a powerful signal that the world's trading nations support peaceful and open exchange and reject the forces of fear and protectionism." See, WH release.
Rep. Dreier Addresses TPA
11/13. Rep. David Dreier (R-CA), Chairman of the House Rules Committee, spoke in the House in favor of granting the President Trade Promotion Authority (TPA). He stated that TPA "will allow us to finally make serious progress in the effort to forge new trade agreements that benefit our constituents. Without TPA we can give up any notion of leading the world in opening new markets, promoting worker protection, and setting international technological standards. And by refusing to entrust our negotiators with the authority to move ahead on trade agreements, we are crippling American industries. ... We must set aside our differences and recognize that the compromise embodied in H.R. 3005 will benefit the American people." See, Congressional Record, Nov. 13, 2001, at page H8037.
Rep. Brown Addresses TPA
11/13. Rep. Sherrod Brown (D-OH) spoke in the House against TPA. He stated that "the Bush administration's trade representative, Bob Zoellick, sought to link the trade negotiating authority known as Fast Track to our Nation's antiterrorism efforts. ... Mr. Zoellick's call for an absolute trade negotiating authority in the name of patriotism must be recognized for what it is, pure and simple political profiteering."
Fighting Terror with Trade
11/14. The Progressive Policy Institute (PPI), a Democratic party think tank, released a paper titled "Fighting Terror With Trade". It argues that many problems in the Middle East derive, not from globalization, but from lack of globalization and trade in the Middle East.
The paper, written by Ed Gresser, states that "Some leftist thinkers have speculated that anti Americanism in the Middle East has its roots in popular resentment of globalization. But the facts are the reverse." This PPI paper elaborates that "Most Middle Eastern countries maintain trade barriers that are among the highest in the world. Egypt, for example, imposes a 54 percent tariff on clothes; Syria bans imports of processed foods, puts a 250 percent tariff on cars, and requires a license for all imports."
The paper continues that many regions of the world that were recently embroiled in wars and violence have obtained stability and greater prosperity through trade integration programs, such as the NAFTA, South America's Mercosur, European Union, and the Association of Southeast Asian Nations (ASEAN) Free Trade Area. In contrast, "Middle Eastern nations have done the opposite by imposing trade restrictions and sanctions on one another. The high trade barriers common throughout the Arab world block routine intraregional trade. The Arab League's boycott of Israel, the region's natural source of technology and capital, further worsens the environment." Moreover, "Eleven of the Arab League's 22 members, and Iran as well, remain outside the World Trade Organization (WTO)." The paper concludes that the U.S. should encourage Middle Eastern nations to join the WTO, and negotiate bilateral free trade agreements.
NTIA Seeks Public Comment on Broadband Issues
11/14. The National Telecommunications and Information Administration (NTIA) released a copy of a notice to be published in the Federal Register requesting comments on deployment of broadband networks and advanced telecommunications services. The NTIA, which is a part of the Department of Commerce, is one federal agency involved in developing U.S. telecommunications and Internet policies.
The notice propounds several dozen questions, including: "What should be the primary policy considerations in formulating broadband policy for the country? ... How should broadband services be defined? ... What is the current status of (1) supply and (2) demand of broadband services in the United States?, and Do the interconnection, unbundling, and resale requirements of the Telecommunications Act of 1996 reduce incumbent local exchange carriers' (ILECs') incentives to invest in broadband facilities and services?"
Comments will be due within 30 of publication in the Federal Register, which has not yet happened.
House Passes Conference Report on CJS Bill
11/14. The House passed the conference report on HR 2500 by a vote of 411 to 15. See, Roll Call No. 438. This is the Commerce, Justice, State, and the Judiciary Appropriations Act for FY 2002 Conference Report. This includes funding most of the technology related agencies and departments, including the USPTO, FCC, FTC, DOJ, NTIA, NIST, BXA, and SEC.
Thursday, Nov 15
8:00 AM - 5:30 PM. Day two of a two day conference hosted by the Securities and Exchange Commission (SEC) and Northwestern University Law School titled Securities Regulation in the Global Internet Economy. See, SEC release. Location: Grand Hyatt Hotel, 1000 H Street NW.
8:30 - 11:00 AM. The New Millennium Research Council will host an event titled "The New State of Competition in the Telecommunications Industry." For more information, contact Violet Hobsford at 202 263-2941. Location: Murrow Room, National Press Club, 529 14th St. NW, 13th Floor.
8:45 AM. FTC Chairman Timothy Muris will speak at the American Bar Association Antitrust Section's Fall Forum titled "New Technologies / New Administrators". Location: Georgetown University Law Center.
9:00 AM. Day one of a two day meeting of the Bureau of Export Administration's Information Systems Technical Advisory Committee (ISTAC). The ISTAC advises the Office of the Assistant Secretary for Export Administration on technical questions that affect the level of export controls applicable to information systems equipment and technology. Part of this meeting will be opened to the public, and part will be closed. The items on the open session agenda include Intel IA64 Roadmap, Applied Micro Devices (AMD) Roadmap, ultra wide band (UWB) technology, and membership coverage of control list categories 3 (electronics), 4 (computers), and 5 (telecommunications and information security). Location: Hoover Building, Room 3884, 14th Street between Pennsylvania and Constitution Avenues, NW.
Day one of a three day conference hosted by the Federalist Society titled "Fifteenth Annual National Lawyer's Convention". See, registration form and agenda. Location: The Mayflower Hotel, 1127 Connecticut Ave., NW.
POSTPONED. 10:00 AM. The Senate Judiciary Committee will hold a business meeting. Location: Room 226, Dirksen Building.
10:00 AM - 12:00 NOON. The FCC's Advisory Committee 2003 for the World Radiocommunication Conference will hold a meeting. See, notice in Federal Register, October 23, 2001, Vol. 66, No. 205, at Pages 53608 - 53609. Location: TW-C305 (Commission Meeting Room), FCC, 445 12th Street, SW.
12:15 PM. The Federal Communications Bar Association's (FCBA) Common Carrier Committee will host a brown bag lunch titled "A Blast from the Past" Views from Former Common Carrier Bureau Chiefs on Current FCC Common Carrier Policy & Practice." The speakers will be Epstein, Metzger, Tritt, and Wallman. Location: Wiley Rein & Fielding, 1750 K Street, 10th Floor.
1:00 PM. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled Cyber Security: Private Sector Efforts Addressing Cyber Threats. The witnesses will be Howard Schmidt (Microsoft), John Casciano (SAIC), Christopher Klaus (Internet Security Systems), Mary Ann Davidson (Oracle), David Morrow (EDS), Warren Axelrod (Pershing), Dave McCurdy (Electronic Industries Alliance), and Mark Doll (Ernst & Young). Location: Room 2322, Rayburn Building.
2:00 PM? The U.S. International Telecommunication Advisory Committee (ITAC) will hold a meeting regarding preparations for the 2002 World Telecommunication Development Conference (WTDC). See, notice in Federal Register. Location: State Department, Room 1408.
2:00 PM. The House Judiciary Committee's Subcommittee on Immigration and Claims will hold a legislative hearing on HR 3231, a bill to replace the Immigration and Naturalization Service (INS) with the Agency for Immigration Affairs. Location: Room 2237, Rayburn Building.
Friday, Nov 16
Day two of a three day conference hosted by the Federalist Society titled "Fifteenth Annual National Lawyer's Convention". See, registration form and agenda. Theodore Olson, Solicitor General of the United States, will speak at 1:45 PM. Location: The Mayflower Hotel, 1127 Connecticut Ave., NW.
10:00 AM. The House Government Reform Committee's Government Efficiency, Financial Management and Intergovernmental Relations Subcommittee will hold a hearing titled Oversight Hearing on National Identification Cards. Location: Room 2154, Rayburn Building.
Saturday, Nov 17
Day three of a three day conference hosted by the Federalist Society titled "Fifteenth Annual National Lawyer's Convention". See, registration form and agenda. At 9:30 AM the Telecommunications & Electronic Media Group will host a panel discussion titled "The FCC Versus the Constitution: Using Constitutional Norms in the Service of Telecommunications Reform." The speakers will be Jane Mago (General Counsel, FCC), Randolph May (Progress & Freedom Foundation), Andrew Schwartzman (Media Access Project), Gregory Sidak (American Enterprise Institute), and Stephen Williams (U.S. Court of Appeals (DCCir)). Location: Mayflower Hotel, 1127 Connecticut Ave., NW.
Monday, Nov 19
11:00 AM - 12:00 NOON. The American Enterprise Institute (AEI) will host an event titled "Trade Policy Briefing: After Doha - What's Next?" The speakers will be Claude Barfield, Michael Finger, and Sarath Rajaptirana. They will analyze the decisions made at the WTO Ministerial Meeting held November 9-13 in Doha, Qatar. Location: AEI, 12th Floor, 1150 Seventeenth Street, NW.
7th Circuit Rules in Copyright Case
11/14. The U.S. Court of Appeals (7thCir) issued its opinion in Susan Wakeen Doll Company v. Ashton Drake Galleries, a copyright infringement case involving "Love Me Tender" dolls. The Appeals Court affirmed the District Court's denial of Ashton's JMOL, but vacated the award of attorneys fees.
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