| House Passes Bill to Create
Department of Homeland Security |
7/26. The House passed HR 5005,
the Homeland Security Act of 2002, by a vote of 295-132. See, Roll
Call No. 367. 120 of the votes against the bill were cast
by Democrats.
The House rejected one technology related amendment on Friday.
Rep. Tom Davis
(R-VA) offered an amendment [PDF]
that would have expanded the Freedom of Information Act (FOIA)
exemption in the bill. See, Sections
271-274. His amendment provided that the exemption also
applies to federal agencies other than the new Department of
Homeland Security. It failed by a vote of 195-233. See, Roll
Call No. 364. Voting correlated strongly with party
affiliation. Republicans tended to support it. Democrats
tended to oppose it.
The Senate has yet to pass its version of the bill. President
Bush released a statement
in which he urged the Senate to pass its version before
recessing for the August recess. However, Sen. Joe Lieberman
(D-CT) has said that any bill passed by the Senate would
include provisions regarding government unions. President Bush
has said he would veto any bill with these provisions.
Meanwhile, Sen. Robert Byrd
(D-WV) said that he would delay the bill, regardless of its
content. |
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| Correction Re FOIA
Exemption |
7/29. The July 25 issue of the TLJ Daily E-Mail Alert (No.
477) included an article titled "Senate Committee
Approves FOIA Exemption Amendment to DHS Bill". This
article stated that "The Senate Governmental
Affairs Committee held a business meeting to consider
amendments to S 2452
[273 pages in PDF], the National Homeland Security and
Combatting Terrorism Act of 2002. The Committee unanimously
approved an amendment
[PDF] offered by Sen. Bob
Bennett (R-UT) and others regarding public access under
the Freedom
of Information Act (FOIA) to information about critical
infrastructure voluntarily shared with the federal
government."
In fact, the amendment which the article hyperlinked to in the
Committee web site, and quoted, was further amended by the
Committee. See, amendment
as adopted. The Committee web site has also since replaced
the original amendment with the revised version.
There are material differences between the two versions. For
example, the original amendment applies to
"information", while the revised version applies to
"records". Also, the original version applies to
information pertaining to "critical infrastructure
information", while the revised version applies to
records pertaining to "the vulnerability of and threats
to critical infrastructure (such as attacks, response and
recovery efforts)". (Parentheses in original.) |
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| FTC Takes No Action on
Synopsys Acquisition of Avant |
7/26. The Federal Trade
Commission (FTC) notified Avant and Synopsys that it has
closed its investigation into the acquisition of Avant by
Synopsys.
Both Synopsys and Avant make electronic design automation (EDA)
software used to aid computer chip manufacturers in designing
integrated circuits. The acquisition was notified under the
Hart Scott Rodino process on December 28, 2001. The
transaction closed on June 6, 2002.
The FTC wrote in a letter
sent to attorneys for Synopsys and Avant that the FTC's
"Bureau of Competition has been conducting a nonpublic
investigation to determine whether the proposed acquisition of
Avant! Corporation by Synopsys, Inc., may violate Section 7 of
the Clayton Act or Section 5 of the Federal Trade Commission
Act. Upon further review of this matter, it now appears that
no further action is warranted by the Commission at this time.
Accordingly, the investigation has been closed."
However, the FTC letters cautioned that "This action is
not to be construed as a determination that a violation may
not have occurred, just as the pendency of an investigation
should not be construed as a determination that a violation
has occurred. The Commission reserves the right to take such
further action as the public interest may require."
The no action letters are short, and the FTC issued no written
decision or statement, other than a brief release.
However, three of the five members of the Commission wrote
separate statements.
Commissioner Mozelle Thompson wrote in his statement
that "The Commission recently has brought enforcement
actions against mergers and other alleged anticompetitive
conduct in high tech industries that raise challenging
questions and merit antitrust investigation. Evaluation of
complementary mergers such as Synopsys/ Avant! generally
requires careful examination of how the merger will affect
opportunities and incentives to engage in exclusionary
conduct, as well as that conduct's impact on current or
possible future competitors, and, ultimately, customers."
He wrote that the present no action letter "does not mean
that the acquisition failed to raise concerns that a combined
Synopsys/Avant! would use its leading position in logic
synthesis (or ``front end´´) tools to enhance its position
in complementary place and route (or ``back end´´) tools,
and to heighten entry barriers at both ends by making the
interface between these software tools proprietary. It did.
But, I do not believe that the current evidence before
the Commission is sufficient to demonstrate that such
foreclosure would likely occur and result in anticompetitive
effects, including higher prices, reduced services, or less
innovation." (Emphasis in original.)
Similarly, Commissioner Thomas Leary wrote in his statement
that "resolution of the matter has not been easy".
He then offered his analysis. He wrote that "The first
question in this case was whether the acquisition would give
Synopsys an incentive to enhance the back-end competitive
position of the formerly independent Avant!, by making it
harder for competing back end products to communicate with
Synopsys' dominant front end product. Only if the answer to
the first question is affirmative, is it necessary to consider
the second question whether any such strategy would adversely
affect the competitive process and ultimately injure
consumers."
Leary continued that while early merger analysis would have
answered both questions in the affirmative, Chicago School
analysis reaches the opposite conclusions. The 1984 Merger
Guidelines, meanwhile, "mention some circumstances where
it was thought that foreclosure could cause competitive
harm".
He added that this is a complex case. He wrote that "a
merger that could even slightly reinforce the position of an
already dominant firm raises serious questions. On the other
hand, it is possible that this merger will facilitate an
eventual seamless integration between the front end and the
back end tools. This could result in a vastly improved
product, which would be a genuine merger efficiency. We would
not want to interfere with this development even if it made
life very uncomfortable for competitors at either end."
Leary concluded that the no action letter could be issued on
the basis that "Synopsys has neither the incentive nor
the intention to adopt a strategy of total or partial
foreclosure".
Finally, Commissioner Sheila Anthony wrote in her statement
that "The key question, therefore, is whether these
efficiencies will be sufficient to outweigh any potential harm
to competition. The answer to this question requires a two
pronged inquiry. First, has the acquisition of Avant! given
Synopsys the ability to take anticompetitive actions? Second,
has Synopsys gained any incentives to do so?"
She concluded that "I find it entirely plausible
that the theory of competitive harm articulated above could
come to pass. But it has proven difficult to pinpoint concrete
evidence to test this theory, or to evaluate whether any
likely harm would be outweighed by integrative efficiencies.
In short, I have voted to close this investigation because, at
this time, there are too many ``mights´´ and ``maybes´´ to
satisfy the reason to believe standard."
All three Commissioners stated that the FTC would continue to
monitor this matter, and might take post merger action. |
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| WorldCom Comments on
Reports of Criminal Investigation |
| 7/26. WorldCom issued a release
which quotes Brad Burns, WorldCom spokesperson, as stating
that "WorldCom disclosed the accounting entries leading
to the announced restatement promptly upon discovery and since
that time the company has been cooperating fully with all
federal and state law enforcement authorities. We have been
advised that those authorities are satisfied with WorldCom's
cooperation to date. Also, we have not been informed by any
law enforcement authority that it presently intends to seek an
indictment against the company." |
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| House Passes Trade
Promotion Authority Conference Report |
7/27. The House passed HR 3009,
the Andean Trade Preference Act, by a vote of 215-212. See, Roll
Call No. 370. This bill is the conference report on a bill
that includes trade promotion authority (TPA).
The House passed its first version of TPA legislation on
December 6, 2001. The House passed HR 3005,
the Bipartisan Trade Promotion Authority Act of 2001, by a
roll call vote of 215-214. See, Roll
Call No. 481. The Senate passed another version, thus
requiring differences to be worked out by a conference
committee.
TPA, which is also known as fast track, generally gives the
President authority to negotiate trade agreements which can
only be voted up or down, but not amended, by the Congress.
TPA strengthens the bargaining position of the President, and
the U.S. Trade Representative
(USTR), in trade negotiations with other nations. |
|
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| House Adjourns |
| 7/27. The House adjourned until 2:00 PM on September 4,
2002. The Senate remains in session. |
|
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| Senate Approps Rejects Bush
Proposals for Increased Funding for Tech Related Agencies |
7/24. The Senate
Appropriations Committee (SAC) reported and released its
Commerce Justice State (CJS) FY 2003 appropriations bill. This
bill includes appropriations for most of the technology
related departments and agencies of the federal government,
including the USPTO, FCC, FTC, Antitrust Division. President
Bush's proposal, released back in February, called for
significant increases for these entities. The Senate bill
provides for no increase, or very small increases, at most
agencies. However, it would reinstate the NTIA's TOP grant
program, which Bush seeks to eliminate.
FCC. The FY 2002 Federal
Communications Commission (FCC) appropriation is $245
Million. The Senate Appropriations Committee (SAC) would hold
this constant. President Bush proposed a $33 Million increase
to $278 Million.
FTC. The FY 2002 Federal
Trade Commission (FTC) appropriation is $156 Million. The
SAC bill increases this to $159 Million. President Bush
proposed a $21 Million increase to $177 Million.
The FTC has dual roles: antitrust and consumer protection. Its
consumer protection functions have placed increased demands
upon it to deal new technology related issues, such as spam,
children's online privacy, financial privacy, identity theft,
and online fraud.
Antitrust Division. The FY 2002 Department of Justice's
Antitrust Division
appropriation is $130 Million. The Senate Appropriations
Committee bill increases this to $133 Million. President Bush
proposed a $12 Million increase to $142 Million.
USPTO. The most significant difference between the SAC
and the President is over funding for the U.S. Patent and Trademark Office
(USPTO). Smoke and mirrors aside, the President proposed a 21%
increase to $1,365 Million, while the SAC bill calls for only
$1,146 Million.
The USPTO seeks to reduce patent pendency from its current
average level of over two years, improve the quality of
patents issued on increasingly complex applications, and
convert more of its records and operations to electronic
format. USPTO Director James Rogan
announced earlier this year that with the increased funding
contained in the President's proposal, the USPTO would hire an
additional 950 patent examiners.
NIST. The President's proposal for the National Institute of Standards
and Technology (NIST) called for an increase in
appropriations for scientific and technical research and
services, from $321 Million to $402 Million. However, it
provided for decreases in other categories, thus leading to an
overall decrease from $687 Million to $577 Million. The SAC
bill provides a total appropriation of $692 Million.
NTIA. The SAC bill provides $14 Million for FY03 for
the expenses of the National
Telecommunications and Information Administration (NTIA).
President Bush proposed $18 Million. However, the two differ
on funding for grant programs. The SAC provides for $16
Million for Information Infrastructure Grants (IIG), and $52
Million for grants for public telecommunications facilities.
Bush, who wants to end the grant program that has gone under
various names (TIIAP, TOP, IIG), proposed $44 Million for NTIA
grant programs.
The SAC approved (and ordered to be reported) S
2778, the Departments of Commerce, Justice, and State, the
Judiciary, and Related Agencies Appropriation Bill, 2003. The
Committee released a press release
of on July 18. On July 24, the SAC reported (and released the
language of) the bill. The Senate Report is numbered 107-218.
See, extended excerpts from S 2778 as reported, including the
entire text pertaining to the USPTO,
NTIA,
NIST,
BXA,
Technology
Administration, Antitrust
Division, FCC,
FTC,
and USTR.
The various documents which contain the President's budget
proposal are collected in an Office of Management and Budget
(OMB) web
site. |
|
|
| Ashcroft Testifies to
Senate Judiciary Committee Regarding Electronic Surveillance |
7/26. Attorney General John Ashcroft
testified before a Senate
Judiciary Committee oversight hearing on the Department of Justice. He
addressed electronic surveillance.
Ashcroft wrote in his prepared
testimony that "Surveillance technology was allowed
to atrophy, eroding our ability to adapt to new threats.
Information, once the best friend of law enforcement, became
the enemy."
For example, "As information restrictions increased,
intelligence capabilities atrophied. Intelligence gathering
techniques created in an era of rotary phones failed to keep
pace with terrorists utilizing multiple cell phones and the
internet. As technology outpaced law enforcement, adaptability
was lost."
However, Ashcroft concluded that "The Patriot Act also
modernized our surveillance tools to keep pace with
technological change. We now have authority under FISA to
track terrorists who routinely change locations and make use
of multiple cell phones. Thanks to the new law, it is now
clear that surveillance tools that were created for hard line
telephones -- pen registers, for instance -- apply to cell
phones and the internet as well."
Sen. Orrin Hatch
(R-UT), the ranking Republican on the Committee, wrote in his prepared
statement that "you announced amended guidelines that
will assist the FBI in conducting investigations capable of
preventing terrorist attacks. In my view, these guideline
changes support, and in fact are critical to, the FBI's
reorganization plan. While there appears to be bipartisan
support for the revised guidelines, concerns have been voiced
about their scope. It seems clear to me, however, that if we
are serious about ensuring that the FBI can operate
proactively, and investigate future, rather than merely past
crimes, the FBI must have the ability to do things our
Constitution permits, like search the Internet, use commercial
data mining services, and visit public places."
See also, prepared
statement of Sen.
Patrick Leahy (D-VT), Chairman of the Committee. |
|
|
| FRB Governor Says
E-Commerce Will Increase Economic Viability of Rural Areas |
| 7/26. Federal
Reserve Board Governor Mark Olson
gave a speech
titled "Economic Change in Rural America" in Fergus
Falls, Minnesota. He stated that "With the dramatic shift
in job growth to service related industries, many other
factors affect the economic viability of a given rural area.
Examples of such factors are the proximity to metropolitan
areas and the access to major highway systems. For the past
two decades, these two factors have been the most important in
distinguishing strong economic performers in rural areas.
Though the statistics do not yet indicate it, these
characteristics will likely fade in importance as the growth
in electronic commerce continues to minimize the need for
proximity to urban areas." |
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| People and Appointments |
| 7/26. Covad named Richard
Jalkut to its board of directors. See, release. |
|
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|
| Qwest to Revise Revenue
Statements |
7/29. Qwest Communications
announced that it will restate revenues. It released a statement
that "the company has determined that it has in some
cases applied its accounting policies incorrectly with respect
to certain optical capacity asset sale transactions in 1999,
2000 and 2001."
The statement continues that "The company analyzed its
application of the revenue recognition policies approved by
its previous auditor, Arthur Andersen LLP, with respect to
optical capacity sales and concluded that those policies were
incorrectly applied to optical capacity asset transactions in
1999, 2000 and 2001 which totaled approximately $1.16 billion
in recognized revenue ..."
Qwest also announced that it will web cast a conference call
Monday, July 29, at 9:00 AM EDT to discuss the current status
of the ongoing analysis of the company's accounting policies
and practices. Qwest Ch/CEO Dick Notebaert and VCh/CFO Oren
Shaffer will participate. See, Qwest
release. |
|
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| Monday, July 29 |
9:00 AM. Qwest
Communications will web cast a conference call to discuss
its accounting. Qwest Ch/CEO Dick Notebaert and VCh/CFO Oren
Shaffer will participate. See, Qwest
release. Qwest announced in a statement
that "the company has determined that it has in some
cases applied its accounting policies incorrectly with respect
to certain optical capacity asset sale transactions in 1999,
2000 and 2001." The statement continued that "The
company analyzed its application of the revenue recognition
policies approved by its previous auditor, Arthur Andersen
LLP, with respect to optical capacity sales and concluded that
those policies were incorrectly applied to optical capacity
asset transactions in 1999, 2000 and 2001 which totaled
approximately $1.16 billion in recognized revenue ..."
9:00 AM - 5:00 PM. Day one of a two day meeting of the Federal Accounting Standards
Advisory Board (FASAB). RSVP by July 22 by calling 202
512-7350. See, notice
in Federal Register. Location: Room 5N30, GAO Building.
1:30 - 3:30 PM. The FCC's WRC-03
Advisory Committee, Informal Working Group 7: Regulatory
Issues and Future Agendas, will hold a meeting. See, notice
[PDF]. Location: The Boeing Company, 1200 Wilson Blvd.,
Arlington, VA.
Deadline to submit comments to the FCC's regarding
its Annual Assessment of the Status of Competition in the
Market for the Delivery of Video Programming. See, notice
in Federal Register. |
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| Tuesday, July 30 |
8:30 AM - 12:00 NOON. The Information
Technology Association of America (ITAA) and the Center for Strategic and
International Studies (CSIS) will host a conference titled
"Wireless Security: Challenges and Solutions".
Richard Clarke, Special Advisor to the President for
Cyberspace Security, will give the keynote address at 8:50 AM.
See, notice
and agenda. RSVP by July 26, 2002 to kwoolley @itaa.org or 703
284-5323. Location: CSIS, 1800 K Street, NW.
9:00 AM - 5:00 PM. Day two of a two day meeting of the Federal Accounting Standards
Advisory Board (FASAB). RSVP by July 22 by calling 202
512-7350. See, notice
in Federal Register. Location: Room 5N30, GAO Building.
9:30 AM. The Senate
Commerce Committee will hold a hearing "to examine
finances in the telecommunications marketplace, focusing on
maintaining the operations of essential communications
facilities". The scheduled witnesses included FCC Chairman Michael Powell,
John Sidgmore (P/CEO of WorldCom),
John Legere (CEO of Global
Crossing), and Afshin Mohebbi (P/COO of Qwest). Press contact: Andy
Davis at 202 224-6654. Location: Room 253, Russell Building.
10:00 AM. The Senate
Finance Committee will hold a hearing on the role of the
Extraterritorial Income Exclusion Act (P.L. 106-519) in the
international competitiveness of U.S. companies. Location:
Room 215, Dirksen Building.
10:00 AM - 12:00 NOON. The State Department's International
Telecommunication Advisory Committee (ITAC) will meet. See, notice
in Federal Register. Location: Room 5533, State Department.
1:30 - 4:30 PM. The U.S. Trade
Representative's Industry Sector Advisory Committee on
Services (ISAC-13) will hold a meeting. The meeting will be
open from 1:30 until 2:10. The remainder of the meeting is
closed. See, notice
in Federal Register. Location: Room 6087B, Department of
Commerce, 14th Street and Constitution Ave., NW. |
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| Wednesday, July 31 |
10:00 AM. The Senate
Judiciary Committee will hold a hearing to examine class
action litigation issues. See, notice.
Press contact: Mimi Devlin at 202 224-9437.
Location: Room 226, Dirksen Building.
11:30 AM - 12:30 PM. The U.S.
Chamber of Commerce will host a luncheon titled "The
President's Homeland Security Strategy: Implications for
Business". The speaker will be Tom
Ridge. The price to attend is $55 for members and $95 for
non-members. See, notice.
Location: 1615 H Street, NW.
12:30 PM. Sen. Max Baucus
(D-MT) will give a luncheon speech. Location: Ballroom,
National Press Club, 529 14th St. NW, 13th Floor.
Second of three deadlines to submit proposals to the NIST
for FY 2002 Advanced
Technology Program (ATP) funds. See, notice
in Federal Register. |
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| Thursday, August 1 |
9:00 AM - 3:00 PM. The Federal
Communications Commission's (FCC) Spectrum Policy Task
Force will hold a public workshop titled "Experimental
Licenses and Unlicensed Spectrum". There will be three
panels. The first panel, titled "Role of Unlicensed
Systems in Future Spectrum Management Policies", will
include Michael Marcus (FCC), Michael Calabrese (New America
Foundation), Lawrence Lessig (Stanford), DeWayne Hendricks
(Dandin Group), David Reed (Reed.com), Peter Hadinger (TRW
Space & Electronics Group), William Chamberlain (Cobra
Electronics), Robert Phaneuf (Terabeam). The second panel,
titled "Possible Evolutionary Improvements to Unlicensed
Rules", will include Michael Marcus, Kevin Negus
(Proxim), Peirre DeVries (Microsoft), Patrick Leary
(Alvarion), Dudley Freeman (UniiGo), Art Reilly (Cisco), Vanu
Bose (Vanu), Ramesh Rao (UCSD). The third panel, regarding
experimental licenses, will include Lauren Van Wazer (FCC),
Michael Marcus, David Hilliard (Wiley Rein & Fielding),
Larry Solomon (Shook Hardy & Bacon), Michael Lynch
(Nortel), David Borth (Motorola), Leo Hoarty (Dotcast), Karl
Nebbia (NTIA), and Bruce Franca (FCC). See, FCC
notice [PDF] and agenda
[PDF]. This is ET Docket No. 02-135. Webcast. Location: FCC,
Commission Meeting Room, 445 12th Street, SW.
2:00 PM. The Senate
Judiciary Committee will hold a hearing on pending judicial
nominations. See, notice.
Press contact: Mimi Devlin at 202 224-9437. Location: Room
226, Dirksen Building.
Deadline to submit comments to the Federal Communications Commission
(FCC) regarding Qwest
Communications' Section 271 application for authorization
to provide in region interLATA service in the states of
Montana, Utah, Washington and Wyoming. See, FCC public
notice [PDF]. This is WC Docket No. 02-189. |
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| Friday, August 2 |
9:00 AM - 3:00 PM. The FCC's Spectrum
Policy Task Force will hold a public workshop titled
"Interference Protection". There will be three
panels. Panel 1, titled "Interference Challenges"
will include Dale Hatfield (consultant), Keith Larson (FCC),
Lynn Claudy (NAB), Martin Rofheart (Xtreme Spectrum), Glen
Nash (APCO), Robert Briskman (Sirius Satellite Radio), Andrew
Clegg (Cingular), Rebecca Hirsch (DOD), and Paul Steffes
(Georgia Tech). Panel 2, titled "Advanced
Technologies", will include Brian Woerner (Virginia
Tech), Ronald Repasi (FCC), Raymond Pickholtz (GWU), Douglas
Lockie (Endwave), Jack Wengryniuk (Hughes Network Systems),
and Marc Goldberg (ArrayComm). Panel 3, titled "A Better
Process", will include Charles Jackson (consultant),
Thomas Stanley (FCC), Dennis Miller (Rural Cellular
Association), Phillip Barsky (XM Radio), Nancy Jesuale
(Portland), Stephen Baruch (Leventhal Senter & Lerman),
Dale Hatfield, Mark Crosby (Access Spectrum), and John Storch
(Western Wireless). See, FCC
notice [PDF] and agenda
[PDF]. Webcast. This is ET Docket No. 02-135. Location: FCC,
Commission Meeting Room, 445 12th Street, SW.
Deadline to submit comments to the Federal Communications Commission
(FCC) in response to its request for comments on the draft of
its revised strategic plan for 2003-2008. See, FCC
notice [PDF].
Deadline to submit comments to the FCC in response
to its request for comments on the FCC's Office of Plans and Policy's
(OPP) Working
Paper No. 35 [PDF], titled "Horizontal Concentration
in the Cable Television Industry: An Experimental
Analysis" authored by Mark Bykowsky, Anthony Kwasnica and
William Sharkey. See, Public
Notice [PDF]. |
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