Tech Law Journal Daily E-Mail Alert
January 18, 2002, 9:00 AM ET, Alert No. 349.
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Commissioner O'Leary Addresses FTC Merger Policy
1/17. Federal Trade Commission (FTC) Commissioner Thomas O'Leary gave a speech in Paris, France, titled "The Essential Stability of Merger Policy in the United States". He reviewed the history of merger policy in the U.S. He argued that the popular conception about merger policy swinging like a pendulum is incorrect. He argued that the Reagan revolution in merger policy had been in the making since the late 1960s, and that there was no 1990s counter reaction. Rather, he painted a picture of continuity and stability in policy over the last 20 years.
O'Leary also reflected on the FTC's recent review of the merger of AOL and Time Warner. He stated that "Had it gone to trial, a case like AOL/Time Warner could also have raised some interesting vertical issues relating to the potential for strategic behavior, as well as issues of non-price competition. The AOL/Time Warner transaction was a vertical combination at three distinct levels: (i) media entertainment of various kinds, in which one wing of Time Warner had arguably the broadest portfolio in the world; (ii) internet service, in which AOL was the dominant ``narrowband创 provider with the arguable potential to become the dominant ``broadband创 company; and (iii) cable services, for which another wing of Time Warner was the dominant -- and often exclusive -- provider in approximately 20% of the country."
O'Leary continued that "Consistent with Chicago school learning, the Commission focused on the possible horizontal competitive effects of each of these three levels as a result of the vertical combination. However, we considered not only the possible impact of total foreclosure, but also the impact of strategies short of foreclosure suggested by post Chicago theories. In this connection, we considered whether traditional ``market share创 statistics could adequately capture the potential for strategic deployment of Time Warner's entertainment portfolio."
He concluded that "The interesting thing to me, as a participant in the decision, was the sophistication of the economic arguments advanced in support of, and in opposition to, the merger. This was not a dispute between adherents of ``pre Chicago,创 ``Chicago创 and ``Post Chicago创 theories; it was a dispute between people who largely shared the same economic philosophy but had very different opinions about what was likely to happen in fast moving industries with little history to draw on for guidance."
O'Leary was appointed to the FTC in 1999 by former President Clinton. He was previously a partner in the Washington DC office of the law firm of Hogan & Hartson, focusing on antitrust and trade practices law. 
SEC Chairman Addresses Regulation of Accounting
1/17. Securities and Exchange Commission (SEC) Chairman Harvey Pitt released a statement titled "Regulation of the Accounting Profession". He wrote that "Over the last decade or so, this Country's vaunted system of disclosure, financial reporting, corporate governance and accounting practices has shown serious signs of failing to keep up with the needs of today's investors, our economy, and new technology that makes rapid communications not only possible but essential. The latest example a most tragic and unprecedented one is the failure of Enron." He stated that the SEC would "erect a system that will restore public confidence in the integrity of the accounting profession."
NIPC Cautions Internet Content Providers
1/17. The FBI's National Infrastructure Protection Center (NIPC) issued an advisory in which it cautioned Internet content providers against publishing in web sites "details on critical infrastructures, emergency response plans and other data of potential use to persons with criminal intent".
The advisory elaborates that "Search engines and similar technologies have made arcane and seemingly isolated information quickly and easily retrievable to anyone with access to the Internet. The National Infrastructure Protection Center (NIPC) has received reporting that infrastructure related information, available on the Internet, is being accessed from sites around the world."
State Dept. Official Addresses Export Controls and China
1/17. Vann Van Diepen, the Acting Deputy Assistant Secretary of State for Nonproliferation Controls, testified before the U.S. China Commission regarding export controls and the PR of China. He stated that "China is a focus of our export control policy because it is a growing regional military power and because Chinese entities have been involved in proliferation related activities. The Administration applies strong export controls on both dual-use items and munitions with the goal of not contributing to nuclear, missile, CBW and other military programs of concern in China or elsewhere."
He added that "Our policy also allows us to treat flexibly areas where the technology is widely available as commodity items or physically impractical to control, such as low-level computers or encryption, thus helping U.S. companies to compete in China on a level playing field. The Administration continually reviews export control policies for China and other countries in an effort to take into account the realities of the market and technology." See, transcript
FTC and DOJ Postpone Antitrust Reorganization Announcement
1/17. Charles James, Assistant Attorney General in charge of the Antitrust Division, and Timothy Muris, Chairman of the Federal Trade Commission (FTC), had scheduled a press conference for January 17 to "unveil an agreement between the two agencies concerning clearance procedures for antitrust investigations". See, notice. However, the event was cancelled.
FCC Announces Reorganization
1/17. The Federal Communications Commission (FCC) announced the adoption of an order containing a reorganization plan. The FCC issued a short release, but not the order.
The FCC release states that a new "Media Bureau will be responsible for the policy and licensing programs for media services, including cable television, broadcast television and radio. It will handle matters pertaining to multichannel video programming distribution, broadcast radio and television, direct broadcast satellite service policy, and associated matters." It will be "comprised of staff and functions from the current Mass Media Bureau and Cable Services Bureau ..."
The FCC stated that a new "Wireline Competition Bureau will be responsible for the policy programs of communications common carriers and ancillary operations (other than wireless telecommunications services). It will conduct rulemakings, resolve waiver petitions and adjudications, determine the lawfulness of carrier tariffs, act on applications for authorizations, administer accounting requirements for incumbent local exchange carriers, review carrier performance, and administer reporting requirements." It will be "comprised of staff and functions from the current Common Carrier Bureau ..."
The FCC release states that the "International Bureau will be realigned along functional lines, with consolidation of the international policy and spectrum rulemaking functions, and intergovernmental and regional leadership and planning functions, which are currently distributed throughout the Bureau."
The FCC release also states that the "Enforcement Bureau will handle pole attachment complaints and some multichannel video and cable television services complaints currently handled in the Cable Services Bureau. It will also handle common carrier audit functions."
FCC Reviews Policies and Procedures
1/17. The Federal Communications Commission (FCC) held a meeting at which it reviewed FCC policies and procedures. See, presentations by the Mass Media Bureau, Cable Services Bureau, Common Carrier Bureau, Consumer Information Bureau, Enforcement Bureau, Office of Engineering and Technology, International Bureau, and the Wireless Telecommunications Bureau.
More News
1/17. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Brown v. MCI WorldCom, a case regarding the filed rate doctrine. William Brown filed a class action complaint in the U.S. District Court (CDCal) against MCI WorldCom alleging overcharging for phone services. The District Court dismissed his complaint, holding that his suit was barred by the filed rate doctrine. (That is, no one may bring a judicial challenge to the validity of a filed tariff, or to enforce any rate other than the rate established by the filed tariff.) The Appeals Court reversed, on the grounds that Brown's complaint only seeks to enforce an existing tariff approved by the FCC.
1/17. Verizon filed a Section 271 application with the Federal Communications Commission (FCC) to provide in region interLATA services in the state of Vermont. See, Verizon release. Verizon has already won approval to provide long distance services in other states, including New York, Massachusetts, Connecticut, and Pennsylvania. It also has applications pending for Rhode Island and New Jersey.
1/16. The European Commission stated that it "has cleared the acquisition by KPNQwest NV of the European operations of Global TeleSystems Inc. (GTS), a US-based telecommunications operator. The Commission's review has shown that the markets concerned, which range from data communications services to Internet connectivity and access, would remain sufficiently competitive." See, release.
1/17. The FBI's National Infrastructure Protection Center (NIPC) published in its web site the January issue [PDF] of Cyber Notes.
1/17. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in USA v. Guagliardo, an appeal from a conviction and sentencing in a pormography case. The noteworthy aspect of this case is the Appeals Court's reasoning that copying files onto a computer disk manufactured abroad satisfies the interstate or foreign commerce element of the offense. Thomas Guagliardo sold an Iomega disk to an undercover law enforcement officer. He had copied onto that disk images that constitute child pormography. Guagliardo argued that this evidence did not meet the statutory requirement that it "was produced using materials that have been mailed, or shipped or transported in interstate or foreign commerce by any means, including by computer." The prosecution argued that since he copied the images onto an Iomega disk that was manufactured in another country, the statute's interstate or foreign commerce requirement was satisfied. Both the District Court and the Appeals Court agreed with the prosecution.
Friday, Jan 18
12:30 - 1:30 PM. The Progressive Policy Institute (PPI) will host a lunch briefing to release two papers that call on government to dramatically increase the use of information technology to prevent terrorist attacks and to facilitate coordination between local, state, and national law enforcement authorities. The speakers will be Robert Atkinson (VP of PPI), Shane Ham (senior policy analyst, PPI's Technology & New Economy Project), and John Cohen. RSVP to John Bray at 202 608-1247. Location: 600 Pennsylvania Ave., SE, 4th Floor.
Monday, Jan 21
Martin Luther King Day. The FCC will be closed. The National Press Club will be closed.
Tuesday, Jan 22
10:00 AM - 12:30 PM. The FCC's Office of Engineering and Technology and Corning Incorporated will host a tutorial on optical communications. See, FCC notice. Location: FCC, Commission Meeting Room (TWC-305), 445 12th Street, SW, Washington DC.
12:15 PM. The Federal Communications Bar Association's Common Carrier Practice Committee will host a brown bag lunch. The speaker will be Dorothy Attwood, Bureau Chief of the FCC's Common Carrier Bureau. RSVP to Rhe Brighthaupt at rbrighth@wrf.com. Location: Wiley Rein & Fielding, 1750 K St., NW, 10th Floor Conference Room.
Wednesday, Jan 23
The House reconvenes at 12:00 NOON.
The Senate reconvenes at 12:00 NOON.
9:00 AM - 5:15 PM. There will be a day long conference titled Broadband Outlook 2002 Conference. Location: Four Seasons Hotel, Washington DC. The scheduled speakers include the following:
  9:15 - 9:45 AM. Nancy Victory, head of the NTIA.
  10:45 - 11:45 AM. Robert Pepper, Chief of the FCC's Office of Plans and Policy.
  11:45 AM - 12:00 NOON. Dorothy Atwood, Chief of the FCC's Common Carrier Bureau.
  12:00 NOON - 1:30 PM. Ken Feree, Chief of the FCC's Cable Services Bureau.
12:15 PM. The Federal Communications Bar Association's Global Telecommunications Development Committee will host a brown bag lunch. Doreen McGirr (Department of State) and John Giusti (FCC International Bureau) will speak about preparations for the ITU World Telecommunications Development Conference. RSVP to Kent Bressie. Location: Wilkinson Barker Knauer, 2300 N Street, NW, 7th floor, Washington DC.
Thursday, Jan 24
11:00 AM. The Cato Institute will host a panel discussion titled "Eye in the Sky -- and Everywhere Else:
Do Biometric Technologies Violate Our Rights?" The speakers will be Joseph Atick (Visionics Corp.), Marc Rotenberg (EPIC), Dorothy Denning (Georgetown University), and John Woodward (RAND). A lunch will follow the program. Location: Cato Institute, 1000 Massachusetts Avenue, NW, Washington DC.
12:15 PM. The Federal Communications Bar Association's Mass Media Committee will host a brown bag lunch. The speakers will be David Solomon, Chief of the FCC's Enforcement Bureau, and Linda Blair, Deputy Chief of the FCC's Enforcement Bureau. RSVP to kdole@npr.org. Location: National Public Radio, 635 Massachusetts, Ave., NW, 1st Floor, Washington DC.
2:00 PM. The Senate Judiciary Committee will hold a hearing on judicial nominations. Sen. Maria Cantwell (D-WA) will preside. Location: Room 226, Senate Dirksen Building.
People and Appointments
1/17. Edmond Thomas will be appointed Chief of the FCC's Office of Engineering and Technology (OET). He has previously held jobs at Bell Atlantic/NYNEX, AT&T, and a subsidiary of Philips Electronics. See, FCC release.
1/17. Allan Singer was promoted to SVP of Programming of AT&T Broadband and President of Satellite Services, Inc., a subsidiary that manages the acquisition of video programming services. See, AT&T release.
1/17. Frances Preston, P/CEO of BMI, renewed her contract through 2004. See, BMI release.
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