| FTC and DOJ Divide
Antitrust Merger Review Authority |
3/5. The Federal Trade
Commission (FTC) and the Department of Justice's (DOJ) Antitrust Division
announced that they have entered into a Memorandum of
Agreement concerning clearance procedures for merger
reviews and other antitrust matters. The agreement attempts to
define, by industry, which transactions will be reviewed by
which agency. Both the FTC and DOJ have statutory authority to
conduct antitrust merger reviews. See also, FTC
release.
The agreement states that the FTC will have responsibility for
"Computer Hardware", which it defines as
"Matters involving computer hardware do not become
matters involving computer software, for purposes of this
allocation, merely because software is being shipped with the
hardware. In matters involving both hardware and software,
clearance will be determined on the basis of the market in
which the competitive effects being investigated are
predominantly likely to occur." The FTC would also be
assigned transactions involving "Professional
Services" and "Satellite Manufacturing and Launch,
and Launch Vehicles".
The agreement assigns to the DOJ's Antitrust Division
transactions involving "Computer Software", which it
defines as "Matters involving computer software do not
become matters involving computer hardware, for purposes of
this allocation, merely because the software is being shipped
with hardware. In matters involving both hardware and
software, clearance will be determined on the basis of the
market in which the competitive effects being investigated are
predominantly likely to occur."
The agreement also gives the DOJ "Media and
Entertainment", which it states "Includes cable
services, satellite services, television and radio
broadcasting, publishing, newspapers, magazines, movies, movie
theaters and upstream video distribution, advertising, music,
toys and games, gaming, and sports".
The agreement also gives the DOJ "Telecommunications
Services and Equipment", which it states "Includes
set-top boxes, cable plant and related infrastructure,
satellite data and programming, communications infrastructure,
and telecommunications equipment (e.g., telephones, pagers,
switches, Internet backbone, telephone cable)".
Finally, the agreement assigns to the DOJ "Financial
Services/ Insurance/ Stock and Option, Bond, and Commodity
Markets" and "Defense Electronics".
The FTC and DOJ had previously reached a similar agreement in
January. However, they delayed formal announcement, due to
opposition from Sen.
Ernest Hollings (D-SC), Chairman of the Senate Commerce
Committee.
A third federal government entity, the Federal Communications Commission
(FCC), conducts license transfer proceedings, which in the
case of some major mergers involving communications and
technology companies, are in the nature of antitrust merger
reviews. The agreement between the FTC and DOJ does not affect
these duplicative reviews.
Charles James,
Assistant Attorney General in charge of the Antitrust
Division, stated in a release that "Allocating industry
sectors in a more rational manner will enable the Department
to investigate more efficiently possible anticompetitive
conduct affecting consumers and will provide greater certainty
to the business community, all of which is good for
consumers."
The agreement also provides that "Nothing in this
Memorandum in any way shall limit either agency in making an
independent decision regarding what investigations it will
undertake or in fulfilling its statutory
responsibilities", and that "This Memorandum does
not confer on any person any enforceable right or
benefit."
The agreement also leaves uncertainty as to which agency would
review certain transactions, an uncertainty that will increase
as industries converge. For example, the agreement assigns
computer hardware companies to the FTC, but assigns computer
software companies to the DOJ. Similarly, the agreement
assigns hardware companies to the FTC, and telecom equipment
companies to the DOJ, even though there is already substantial
convergence of these two sectors.
The agreement addresses such uncertainties. It states that
"The agencies anticipate continued convergence between
certain telecommunications and information technologies. In
order to address clearance issues that arise as a result of
such convergence, each agency will appoint two representatives
to form an inter agency ``Convergence Committee´´ that will
be tasked with recommending" further refinements to the
division authority. |
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| FRB Vice Chairman Addresses
Disaster Recovery |
3/4. Federal
Reserve Board Vice Chairman Roger
Ferguson gave a speech
to the Institute of
International Bankers in Washington DC titled "A
Supervisory Perspective on Disaster Recovery and Business
Continuity". He stated that "Through the routine
supervisory process, we are talking to institutions about the
robustness of their disaster recovery planning but are
stopping short of setting detailed regulatory standards at
this point."
Ferguson stated that "The Federal Reserve and other
regulators, both here and abroad, have been analyzing the
aftermath of the terrorist attacks with a view toward
strengthening the overall resilience of the financial
system."
He first reviewed three key lessons of September 11.
"First, business continuity planning at many
institutions, although improved by Y2K preparations, clearly
had not fully taken into account the potential for wide spread
disasters and for the major loss or inaccessibility of
critical staff."
"Second, business concentrations, both market based and
geographic, intensified the impact of operational disruptions.
... Moreover, significant telecommunications vulnerabilities
resulting from concentrations became evident when failures
affected numerous institutions, both within and outside lower
Manhattan." And, "Third, the events of September 11
graphically demonstrated the interdependence among financial
system participants, wherever located."
Ferguson then addressed the "steps that institutions are
taking to improve their own preparedness and business
continuity planning", such as "enhancing security
measures, updating communication plans, and strengthening real
time data backup". He went into detail about different
back up models, including having an active operating site and
a backup site, and having split operations. He also addressed
communications diversification.
He stated that "Institutions are also exploring methods
to provide a greater diversity of telecommunications services
and to eliminate points of failure. Contract provisions and
audit oversight of telecommunications vendors may heighten
attention to this critical vulnerability. At the same time,
many recognize that overcoming telecommunications
vulnerabilities will be extremely difficult given the current
physical infrastructure. In the longer term, establishing
diverse telecommunications methods (such as Internet and
wireless) and moving toward wider geographic diversification
of operations may address these vulnerabilities. Industry wide
discussions with telecommunications providers may help
institutions to avoid some of the vulnerabilities exposed on
September 11. Some institutions are reexamining arrangements
with disaster recovery vendors because they have found that
these vendors' ``first come, first served´´ policies mean
just that."
Ferguson concluded that the FRB is "talking to our
industry colleagues about appropriate sound practices",
but is "stopping short of setting detailed regulatory
standards at this point". He added, "Although I
anticipate that we will issue updated supervisory guidance and
examination procedures for business continuity before long, I
am not certain that we want to approach this issue with a
checklist." |
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| 3rd Circuit Reverses Local
Zoning Board's Denial of Permit for Cell Tower |
3/5. The U.S.
Court of Appeals (3rdCir) issued its opinion
in Nextel
v. Unity Township, case involving a wireless
phone company's efforts to obtain authority from a local
zoning board to construct a radio tower on private land, to
eliminate a gap in its cell phone service. The local authority
denied permission. The District Court ruled for the local
authority. The Appeals Court reversed and remanded.
Background. Nextel Communications sought to eliminate a
gap in its service along Route 30 in western Pennsylvania. It
requested a variance from Unity Township in order to build a
250 foot radio tower on a private farm that is in an area
zoned residential. Unity denied the request. Nextel filed a
complaint in U.S. District Court (WDPenn) against Unity. The
District Court held that Nextel's claim had been mooted by an
amendment to the original ordinance upon which the denial was
based.
Court of Appeals. Nextel appealed. It argued that the
zoning ordinance had the effect of prohibiting all wireless
telecommunications towers in the Township, and that the Unity
Township's disparate treatment of Nextel and a competitor
constituted "unreasonable discrimination", in
violation of the Communications Act of 1934 (TCA), at 47 U.S.C.
§ 332(c)(7)(B)(i).
The Appeals Court rejected the mootness argument. It then
reversed, and held that "the case is remanded for three
fact specific determinations: (1) whether the service gap was
suffered by all wireless providers or only Nextel, (2) whether
erecting a tower at the farm site proposed by Nextel was the
least intrusive means for covering the gap in service along
U.S. Route 30, and (3) whether the Township's discrimination
between Nextel and Sprint was unreasonable. If the District
Court finds that no provider was covering the service gap and
that the farm site was the least intrusive means of covering
that gap, or it finds that the Township's discrimination was
unreasonable, then Nextel is entitled to remedies available
under the TCA." |
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| House Subcommittee to Mark
Up Dot Kids Bill |
3/5. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet will mark up HR 3833
[PDF], the "Dot Kids Implementation and Efficiency Act of
2002", at 2:00 PM on Wednesday, March 6. This is the
latest version of legislation sponsored by Rep. John Shimkus
(R-IL) and Rep. Ed
Markey (D-MA) to require the creation of a domain
restricted to content suitable for minors.
The bill provides that "The NTIA
shall require the registry selected to operate and maintain
the United States country code Internet domain to establish,
operate, and maintain a second level domain within the
United States country code domain that provides access
only to material that is suitable for minors and not harmful
to minors". (Emphasis added.)
The original bill of Reps. Shimkus and Markey, HR
2417, would have required a "top-level, International
domain". The Subcommittee held a hearing on HR 2417 on
November 1, 2001. See, TLJ
Daily E-Mail Alert No. 300, Nov. 2, 2001. |
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|
| BXA Issues Wassenaar Rule
Changes |
| 3/5. The Commerce Department's Bureau of Export Administration
(BXA) issued rule
changes [PDF] pertaining to the Wassenaar Arrangement on
Export Controls for Conventional Arms and Dual Use Goods and
Technologies. These rule changes revise the Commerce Control
List (CCL) to implement changes in Category 4 (Computers) of
the Wassenaar List of Dual Use Goods and Technologies,
particularly with respect to million theoretical operations
per second (MTOPS) levels. The rule changes are effective
March 5, and will be published in the Federal Register on
March 8. |
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| A Free Trading Nation |
3/5. President Bush announced that he is imposing a 30%
tariff on the importation of certain steel products from
certain countries. Speaking at a joint press conference with
Egyptian President Hosni Mubarak, Bush stated, "we're a
free trading nation".
The President's announcement follows, in part, a
recommendation by the U.S.
International Trade Commission. The statutory authority
for this action is Section 203(b) of the Trade Act of 1974, 19
U.S.C. § 2253. See also, the President's Steel
Products Proclamation and White
House release.
This action does not apply to Canada, Israel, Jordan, and
Mexico, the four countries with which the U.S. has free trade
agreements. Nor does it apply to "a developing country
that is a member of the World
Trade Organization (WTO), as long as that country's share
of total imports of the product, based on imports during a
recent representative period, does not exceed 3 percent".
U.S. Trade Representative (USTR)
Robert Zoellick explained it this way: "So the President
believes that free trade benefits America's consumers and
families, and that it's vital to generating jobs for America's
workers, opening markets for American products and services,
and in spurring economic growth. But the President also
recognizes that some industries, workers and communities can't
respond as quickly as one might wish to the changes of a fast
moving global economy. We all know that financial and
information markets move with lightening speed. But some
traditional manufacturing industries and the communities that
depend on them cannot. Some may need a breathing space to
regain competitiveness. And this includes the steel industry.
The global steel industry has been rife with government
intervention, subsidies and protection. These unfair practices
have hurt the U.S. steel industry because our market has been
much more open than others." See, transcript
of press conference.
EU Trade Commissioner Pascal
Lamy responded that "The US decision to go down the
route of protectionism is a major setback for the world
trading system. Imports are not the cause of US difficulties
and the measures announced today will not only not provide a
solution but aggravate matters. I fear today's short sighted
move will end any hope of finding an internationally agreed
solution at the OECD to overcapacity problems faced by the
world steel industry, and will not rein in global subsidies.
The EU will of course launch an immediate complaint in Geneva
against this clear violation of WTO rules and we will take
whatever measures are necessary to safeguard our own
market." See, EU
release. |
|
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| Microsoft Opposes
Government Imposed Copy Protection Standards |
3/5. Microsoft published in its web site an essay
titled "Pirates of the Information Age". This essay
states that "Some believe government legislated standards
for copy protection are the way to go, but such a course could
actually slow the development of new solutions ..."
Microsoft continued that "There clearly is a need,
however, for government and industry to work together to fight
the piracy problem. The White House is including piracy
enforcement in trade negotiations with foreign countries. Law
enforcement agencies, working in partnership with the high
tech industry, are becoming more aggressive and sophisticated
in their efforts to curb software theft. Microsoft and other
software companies are undertaking worldwide education
campaigns to help businesses and consumers recognize
counterfeit software."
Microsoft also advocated "stronger anticounterfeiting
laws, multilateral cooperation, sustained resources and
industry cooperation". |
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| People and Appointments |
3/5. Candi Wolff was named Assistant to the Vice
President for Legislative Affairs. From 1996 to 2000 she was
Deputy Staff Director to the Senate Republican Policy
Committee. Before that, she was Legislative Counsel to the
Senate Steering Committee and Tax Counsel to former Sen.
Malcolm Wallop (R-WY). And before that, she was an associate
in the Public Policy and Law section of the law firm of Akin Gump.
See, White
House release.
3/5. The Board of Directors of the Competitive Telecommunications
Association (CompTel) elected new officers. Richard
Burk (P/CEO of nii Communications) is the new Chairman; he
replaces Doug Hanson. Jerry James (President of Grande
Communications) is the new Vice Chairman; he replaces Drew
Walker. Joseph Ambersley (EVP at PaeTec) is the new
Vice Chairman and Treasurer; he replaces Burk. See, CompTel
release. |
|
|
| More News |
3/5. Attorney General John Ashcroft
and Deputy Attorney General Larry Thompson held a press
conference to announce the creation of the Department of Justice's
National Security Coordination Council. See, transcript.
3/5. The Bureau of Export
Administration (BXA) updated its Denied
Persons List.
3/5. The Federal Communications
Commission's (FCC) Common Carrier Bureau announced that it
is seeking nominations for a board member position on the Universal Service
Administration Company's (USAC) Board of Directors. For
more information, contact Sheryl Todd at 202 418-7400.
3/5. The U.S. Department of Justice published a notice
in the Federal Register regarding the Tunney Act public
comments that it received relating to the Revised Proposed
Final Judgment in U.S. v. Microsoft, Civil Action No. 98-1232.
See, Federal Register, March 5, 2002, Vol. 67, No. 43, at
Pages 9984 - 9985.
3/4. The U.S. District
Court (NDOhio) sentenced Brian Wildman to five months in
prison, and five months of home confinement. Wildman plead
guilty to two counts of mail fraud, in violation of 18
U.S.C. § 1341, in connection with an eBay Internet
auction fraud scheme. See, USAO
release. |
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| About Tech Law Journal |
Tech Law Journal publishes a free access web site and
subscription e-mail alert. The basic rate for a subscription
to the TLJ Daily E-Mail Alert is $250 per year. However, there
are discounts for entities with multiple subscribers. Free one
month trial subscriptions are available. Also, free
subscriptions are available for law students, journalists,
elected officials, and employees of the Congress, courts, and
executive branch, and state officials. The TLJ web site is
free access. However, copies of the TLJ Daily E-Mail Alert and
news items are not published in the web site until one month
after writing. See, subscription
information page.
Contact: 202-364-8882; E-mail.
P.O. Box 4851, Washington DC, 20008.
Privacy
Policy
Notices
& Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All
rights reserved. |
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| Wednesday, March 6 |
The House will meet at 10:00 AM for legislative business. It
is scheduled to take up the Federal Information Technology
Workforce and Acquisition Improvement Act.
9:00 AM - 5:00 PM. The National
Institute of Standards and Technology's (NIST) Computer System Security
And Privacy Advisory Board (CSSPAB) will meet to discuss
computer security legislation, privacy issues, critical
infrastructure protection, the USPS's electronic postmark
products, and other matters. The CSSPAB advises the Secretary
of Commerce and the Director of NIST on security and privacy
issues pertaining to federal computer systems. This is the
second day of a three day meeting. See, notice
in Federal Register. Location: General Services
Administration, 7th and D Streets, SW, Room 5700.
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in NeoMagic
v. Trident MicroSystems, No. 01-1631, an appeal from the
U.S. District Court (DDel) in a patent infringement and
antitrust case involving embedded memory semiconductors. The
District Court granted summary judgment of non infringement to
Trident
MicroSystems. Location: Courtroom 201, LaFayette Square,
717 Madison Place, NW.
10:00 AM - 4:00 PM. The SEC will hold
a roundtable meeting to examine proposals for better
protecting investors by reforming financial disclosure and
auditor oversight. The morning session (10:00 AM - 12:00 NOON)
will focus on financial disclosure. The afternoon session
(2:00 - 4:00 PM) will focus on auditor oversight. See, SEC notice.
Location: Douglas Room, Basement, SEC.
10:00 AM. The House
Appropriations Committee's Subcommittee on Commerce,
Justice, State, and the Judiciary will hold a hearing on the
proposed budget for FY 2003 for the State Department.
Location: Room 2359, Rayburn Building.
10:30 AM. The House
Judiciary Committee will meet to mark up several bills,
including HR
2314, the "Class Action Fairness Act of 2001",
sponsored by Rep.
Bob Goodlatte (R-VA). Location: Room 2141, Rayburn
Building.
10:30 AM. The Senate
Judiciary Committee's Subcommittee on Antitrust,
Competition, and Business and Consumer Rights will hold a
hearing titled "Dominance in the Sky: Cable Competition
and the Echostar Direct TV Merger". Sen. Herb Kohl (D-WI) will
preside. The scheduled witnesses include Charlie Ergen
(Echostar), Eddy Hartenstein (DirecTV), Gene Kimmelman
(Consumers Union), Robert Pitofsky (Arnold & Porter), and
Jay Nixon (Attorney General of Missouri). Location: Room 226,
Dirksen Building.
TIME? Ron Sommer, Chairman of the Board of Management of
Deutsche Telekom AG, will deliver a luncheon address at the
U.S. Chamber of Commerce titled "The Transformation Into
a Global Company: Meeting Market and Regulatory
Challenges" The price to attend is $75 for members and
$115 for non members. For more information, contact Chris
Merida at 202 463-5500. Location: 1615 H Street, NW.
12:15 PM. The FCBA's
Online Committee will host a brown bag lunch. The speaker will
be Anthony Rutkowki, VP Internet Strategy, Verisign. He will address
"Broadband, When? -- Verisign's' View." RSVP to
Scott Harris at sharris
@harriswiltshire.com. Location: Lampert & O'Connor,
5th Floor, 1750 K Street, NW.
2:00 PM. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet will mark up HR
3833 [PDF], the "Dot Kids Implementation and
Efficiency Act of 2002", sponsored by Rep. John Shimkus
(R-IL) and Rep. Ed
Markey (D-MA). Rep.
Fred Upton (R-MI) will preside. Location: Room 2322,
Rayburn Building.
2:00 PM. The House
Appropriations Committee's Subcommittee on Commerce,
Justice, State, and the Judiciary will hold a hearing on the
proposed budget for FY 2003 for the FBI. Location: Room 2359,
Rayburn Building.
2:30 PM. The Senate
Commerce Committee's Subcommittee on Communications will
hold a hearing on wireless communications infrastructure.
The witnesses will be Agostino Cangemi (NYC Dept. of Info.
Tech. and Telecom.), Steve Souder (Montgomery Co., MD, 911
Emergency Communications Center), Ari Wax (NYC Deputy
Commissioner of Technological Development), Glen Nash (Assoc.
of Public Safety Communications Officials), Paul Crotty
(Verizon), Gloria Harris (AT&T Wireless), Larissa Herda
(Time Warner Telecom), and Christopher McLean (ComCare
Alliance). Sen. Daniel
Inouye (D-HI) will preside. Location: Room 253, Russell
Building. |
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| Thursday, March 7 |
9:00 AM - 5:00 PM. The National
Institute of Standards and Technology's (NIST) Computer System Security
And Privacy Advisory Board (CSSPAB) will meet. This is the
third day of a three day of meeting. See, notice
in Federal Register. Location: GSA, 7th and D Streets, SW,
Room 5700.
9:30 AM. The U.S.
Court of Appeals (DCCir) will hear oral argument in USTA
v. FCC. Judges Edwards, Randolph and Williams will
preside. Location: 333 Constitution Ave. NW.
10:00 AM. The Senate
Appropriations Subcommittee's Subcommittee on Commerce,
Justice, State, and the Judiciary (CJS) will hold a hearing on
the administration's proposed budget estimates for FY 2003 for
the SEC and the FCC. SEC
Chairmam Harvey
Pitt and FCC Chairman Michael Powell
will testify. See, CJS
release. Location: Room 253, Russell Building.
10:30 AM - 12:30 PM. The House Science Committee's
Subcommittee on Research will hold a hearing titled
"Meeting the Demands of the Knowledge Based Economy:
Strengthening Undergraduate Science, Mathematics and
Engineering Education". Location: Room 2325, Rayburn
Building.
10:00 AM. The Senate
Banking Committee will hold a hearing. Federal Reserve
Chairman Alan Greenspan will deliver his semi annual
report on monetary policy. Location: Room 106, Dirksen
Building.
10:00 AM. The Senate
Judiciary Committee has scheduled a business meeting.
Location: Room 226, Dirksen Building. |
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| Friday, March 8 |
12:15 PM. The FCBA's
Transactional Practice Committee will host a brown bag lunch
on mass media transactions. RSVP to Sue Fischer at (202)
776-2491. Location: Dow
Lohnes & Albertson, 1200 New Hampshire Ave.
12:30 - 2:00 PM. The New
American Foundation will host a panel discussion titled
"Unwired Security: Is a National Wireless Emergency
Network Necessary?" The speakers will be Reed Hundt
(McKinsey & Co.), Thomas Wheeler (P/CEO of the Cellular
Telecommunications & Internet Association), and Robert
Gurss (Shook Hardy & Bacon). RSVP to Laura Gillespie at gillespie
@newamerica.net or 202 986-4901. Location: 1630
Connecticut Ave., NW, 7th Floor.
Extended deadline for submitting comments to the FCC in response
to its Further Notice of Proposed Rulemaking regarding the
current state of the market for local and advanced
telecommunications services in multi tenant environments. See,
FCC
notice of extension of deadline [PDF]. This is WT Docket
No. 99-217. |
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| Monday, March 11 |
8:30 - 10:00 AM. The American
Enterprise Institute (AEI) will host a press breakfast on
the topic "Taxing Broadband". Harold Furchtgott-Roth
and other AEI scholars will speak. RSVP to Veronique Rodman at
(202) 862-4871 or vrodman@aei.org.
Location: AEI, 1150 17th Street, NW, 11th Floor Conference
Room.
8:30 AM - 12:00 NOON. The ITAA
and the CSIS
will co-host a conference titled "Managing Identity and
Authentication on the Internet". For more information,
contact Shannon Kellogg at skellogg
@itaa.org. See, ITAA
notice. Location: CSIS, B1 Conference Center, 1800 K
Street, NW.
Deadline to submit comments to the Copyright Office in
response to its Notice of Proposed Rulemaking on "the
requirements for giving copyright owners reasonable notice of
the use of their works for sound recordings under statutory
license and for how records of such use shall be kept and made
available to copyright owners." See, notice
in Federal Register. |
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| Tuesday, March 12 |
9:30 AM. The U.S.
Court of Appeals (DCCir) will hear oral argument in USTA
v. FCC, No. 01-1085. Judges Ginsburg, Rogers and Garland
will preside. Location: 333 Constitution Ave. NW.
10:00 AM. The Senate
Appropriations Subcommittee's Subcommittee on Commerce,
Justice, State, and the Judiciary will hold a hearing on the
administration's proposed budget estimates for FY 2003 for the
Department of State.
Location: Room 138, Dirksen Building.
1:30 PM. The U.S. International Telecommunication Advisory
Committee (ITAC) will hold a meeting. See, notice
in Federal Register. Location: State Department. |
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