Tech Law Journal Daily E-Mail Alert
November 14, 2002, 9:00 AM ET, Alert No. 549.
TLJ Home Page | Calendar | Subscribe | Back Issues
FCC and DOJ Approve AT&T Comcast Merger
11/13. The proposed merger of AT&T and Comcast received approval from the Federal Communications Commission (FCC) and the Department of Justice (DOJ). The FCC adopted, but did not release, a Memorandum Opinion and Order (MOO) authorizing the transfer of licenses from AT&T and Comcast to a new entity, AT&T Comcast. However, the FCC conditioned it approval upon divestment of all interest in Time Warner Entertainment (TWE). In addition, the DOJ, which has statutory authority to conduct antitrust merger reviews, issued a release in which it stated that it "will not challenge the transaction".

This is the FCC's proceeding titled "In the Matter of Applications for Consent to the Transfer of Control of Licenses from Comcast Corporation and AT&T Corp., Transferors, to AT&T Comcast Corporation, Transferee". It is MB Docket No. 02-70.

The FCC also stated that its Order requires AT&T and Comcast to place TWE into an irrevocable trust on the day the merger closes, and to fully divest themselves of any interest in TWE within 5 1/2 years after the merger's closing. The Order further provides that during the divestiture period, AT&T Comcast is prohibited from involvement in the video programming activities of TWE.

The DOJ wrote that "Following the announcement by the Federal Communications Commission that it would approve Comcast Corporation's proposed acquisition of AT&T Broadband, Inc. as restructured to place certain Time Warner Entertainment assets in a trust, the Department of Justice announced today that it will not challenge the transaction. After a thorough investigation and analysis that included a large number of interviews of industry participants and a review of documents from various firms in the business, the Department's Antitrust Division has closed its investigation into the merger."

The FCC vote was 3-1, with Commissioner Michael Copps voting against. He wrote in his dissent [PDF] that "The sheer economic power created by this mega-combination, and the opportunities for abuse that would accompany it, outweigh the very limited public interest benefits that either the Applicants or the majority find here."

He noted that AT&T and Comcast argue that the merger would result in "accelerated deployment of facilities based high-speed internet service, digital video, and other broadband services" and that they "cite economic efficiencies that will result from their agreement and how these will benefit the combined company's ability to do business." He countered that "there are some such efficiencies. Yet, while Comcast talks about the need to upgrade and modernize AT&T's broadband deployment, one wonders why this corporate resuscitation is better achieved by conglomeration and $30 billion of additional debt rather than through competition in the marketplace."

Gene Kimmelman of the Consumers Union criticized the decision. He wrote in a release that "This is a dangerous merger that allows one company to control video programming and high-speed Internet services for more than 40 percent of cable households in America. It is mind-boggling how federal officials have let the largest cable companies consolidate and thereby dictate the choices of cable channels and high-speed Internet services for consumers nationwide."

James Cicconi, AT&T General Counsel, stated in a release that "We're very pleased with the FCC's approval of this transaction. This represents a major milestone in delivering quality broadband services to consumers and value to our shareowners. We commend the FCC for its careful and comprehensive review of this merger, and we look forward to completing the transaction shortly."

Rep. Rick Boucher (D-VA) reacted to the FCC's decision in this matter, as well as in the EchoStar DirecTV merger. He wrote that "I am appalled that coming off the heels of the denial of the EchoStar Hughes merger application, on which the FCC acted prior to our nation's antitrust authorities, the FCC would now allow the massive combination of cable properties into the newly formed AT&T Comcast Corporation.  Claiming that this combination of cable companies will spur new investment and have a positive impact on the deployment of broadband services while only recently ignoring the 15 percent of Americans who would have received local television stations and perhaps the only viable broadband option through the EchoStar Hughes combination, rings disingenuous and hollow to rural America."

On October 10, 2002, the FCC announced at that it declined to approve the transfer of licenses from EchoStar Communications Corporation and Hughes Electronics Corporation, a subsidiary of General Motors Corporation, to a new entity". EchoStar and Hughes both provide direct broadcast satellite (DBS) service via their Dish Network and DirecTV. The FCC designated the application for a full evidentiary hearing before an Administrative Law Judge.

Rep. Boucher continued that "There is a great potential for consumers to be harmed from the FCC's cursory review of the AT&T Comcast merger application, including the FCC's unwillingness to place on the record under protective order the fundamental agreement which underlies the ability of users to access content of unaffiliated ISPs through the newly merged cable companies' lines. The FCC's disparate treatment of these cable and satellite mergers demonstrates vividly that the FCC still prefers to view the digital world through antiquated separate technology lenses."

Rep. Boucher is a member of the House Commerce Committee, and its Telecom Subcommittee. He has advocated approval of the proposed satellite merger on the basis that it would facilitate the provision of broadband Internet access services in rural areas via satellite. See, story titled "EchoStar DirecTV Merger and Broadband Internet Access" in TLJ Daily E-Mail Alert No. 321, December 5, 2001. See also, October 28, 2002 letter from Rep. Boucher to Attorney General John Ashcroft regarding the DOJ's pending review of the proposed merger of Echostar and Directv.

Greenspan Testifies on Economic Outlook
11/13. Federal Reserve Board (FRB) Chairman Alan Greenspan testified before the Joint Economic Committee on the economic outlook. "A year ago, we were struggling to understand the potential economic consequences of the events of September 11", said Greenspan. "The United States economy, however, proved to be remarkably resilient: In the event, real GDP over the past four quarters grew 3 percent -- a very respectable pace given the blows that the economy endured." See, text of testimony.

  Alan Greenspan

However, he added that "several forces have continued to weigh on the economy: the lengthy adjustment of capital spending, the fallout from the revelations of corporate malfeasance, the further decline in equity values, and heightened geopolitical risks. Over the last few months, these forces have taken their toll on activity, and evidence has accumulated that the economy has hit a soft patch."

He also focused on computing and communications. He reiterated the point that "With margins under pressure, businesses have also been reallocating their capital so as to use it more productively. Moreover, for equipment with active secondary markets, such as computers and networking gear, productivity may also have been boosted by a reallocation to firms that could use the equipment more efficiently. For example, healthy firms reportedly have been buying equipment from failed dot-coms."

He also stated that "Arguably, the pickup in productivity growth since 1995 reflects largely the ongoing incorporation of innovations in computing and communications technologies into the capital stock and business practices. Indeed, the transition to the higher permanent level of productivity associated with these innovations is likely not yet completed. Once the current level of risk recedes, businesses will no doubt move to exploit the profitable investment opportunities made possible by the ongoing advances in technology."

USTR Plans FTA Negotiations with Australia
11/13. U.S. Trade Representative (USTR) Robert Zoellick notified Congressional leaders of his plans to initiate negotiations for a free trade agreement (FTA) with Australia. Among the topics to be covered are access to the telecommunications services sector, promotion of e-commerce, customs duties on electronically delivered products, and protection of intellectual property rights (IPR).

See, USTR release, letter [PDF] to Rep. Denny Hastert (R-IL), and substantially identical letter [PDF] to Sen. Robert Byrd (D-WV).

Telecommunications. He wrote that he plans to "Pursue a comprehensive approach to market access, including enhanced access for U.S. services firms to telecommunications and any other appropriate services sectors in Australia’s market."

  Robert Zoellick

Electronic Commerce. Zoellick wrote that he plans to "Seek to affirm that Australia will allow goods and services to be delivered electronically on terms that promote the development and growth of electronic commerce." He also plans to "Seek to ensure that Australia does not apply customs duties in connection with digital products or unjustifiably discriminate among products delivered electronically."

Intellectual Property Rights. Zoellick wrote that he plans to "Seek Australia's ratification of the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty" and "to establish standards that build on the foundations established in the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPs Agreement) and other international intellectual property agreements, such as the WIPO Copyright Treaty and Performances and Phonograms Treaty." (Parentheses in original.)

He also wrote that he plans to "Seek to enhance the level of Australia’s protection for intellectual property rights beyond TRIPS in new areas of technology, such as internet service provider liability."

He also wrote that he will seek "patent protection and protection of undisclosed test data and other information" more in line with U.S. standards.

Finally, Zoellick wrote that he will "Seek to strengthen Australia's domestic enforcement procedures, such as increasing criminal penalties so that they are sufficient to have a deterrent effect on piracy and counterfeiting."

Tech Crime & Fraud Report
11/13. A trial jury of the U.S. District Court (NDCal) returned a guilty verdict against Robert Prevett on one count of insider trading in violation of 15 U.S.C. §§ 78j and 78ff. This is a case involving insider trading in the stock of Nvidia, which makes graphics processors and media communications devices. USAO release.

11/13. The U.S. Court of Appeals (7thCir) issued its opinion [PDF] in USA v. Chad Hughes and Gary Bovey, appeals from sentencing in a currency counterfeiting case. The Appeals Court noted that the defendants "produced the counterfeit bills with a Hewlett Packard ink jet printer" and "bonded paper". The defendants argued for shorter sentences on the grounds that they merely photocopied bills. The District Court rejected this argument, because it found that the bills were "very realistic". The Appeals Court affirmed the District Court's sentences.

11/13. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (SDNY) against, Inc., a company that operates commercial websites and engages in e-commerce retailing, and two of its principals, alleging, among other things, fraud in violation of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5. The complaint alleges that 800America "is committing an egregious financial fraud by falsifying virtually all of its reported revenues and millions in expenses and assets"; it also alleges unregistered offerings, insider trading, and misrepresentations in its public filings and to the public. The complaint seeks injunctive relief, an asset freeze, and other relief. The Court issued a temporary restraining order. See also, SEC release.

11/13. The Federal Trade Commission (FTC) announced an initiative to fight deceptive spam and Internet scams. See, FTC release.

People and Appointments
11/13. Thomas Chandler was named Chief of the Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau's Disability Rights Office (DRO). Cheryl King was named to the new position of Deputy Chief of the Office. Former DRO Chief Pam Gregory will become a special advisor to the chief. See, FCC release (FCC).


11/13. President Bush announced his intent to appoint John Chambers and Albert Edmonds to be members of the National Infrastructure Advisory Council (NIAC). Chambers is P/CEO of Cisco Systems. Edmonds is President of US Government Solutions at EDS. See, White House release.

11/13. The Intellectual Property Owners Association (IPO) announced the appointment of several committee chairmen. Larry Welch of Eli Lilly was named chairman of the Harmonization / World Patent Committee. Lee Caffin of Aventis Pharmaceuticals was named chairman of the International Prosecution Practice Committee. Ken Stachel of PPB Industries was named chairman of the European Union Competition Regulations Committee. Richard Weiss of Nortel Networks was named chairman of the IP Licensing Committee.

Thursday, November 14
The House will meet at 10:00 AM.

Day one of a three day conference of the Federalist Society. At 1:45 - 3:15 PM there will be a panel titled "Privacy in the Post-September 11 World". The speakers will be Viet Dinh (DOJ), Lino Graglia (University of Texas School of Law), Robert Levy (Cato), Barry Steinhardt (ACLU), George Terwilliger (White & Case), and Judge Edith Clement (Court of Appeals, 5th Circuit). At 3:50 - 5:20 PM there will be a panel titled "Telecommunications Group: Privacy, Telecommunications, and Technology: Does Emerging Technology Force New Privacy Considerations?" The speakers will be Kathleen Abernathy (FCC Commissioner), Stewart Baker (Steptoe & Johnson), Jerry Berman (CDT), Reid Cox (Center for Individual Freedom), James Harper (, and Judge Stephen Williams (Court of Appeals, D.C. Circuit). See, schedule and online registration page. Location: Mayflower Hotel, 1127 Connecticut Ave., NW.

The Cato Institute will host a day long conference titled "Telecom and Broadband Policy After the Market Meltdown". See, notice. Webcast. Location: Cato, 1000 Massachusetts Ave., NW.

TIME? Day one of a two day conference hosted by Cellular Telecommunications and Internet Association (CTIA) titled "Homeland Security Critical Issues Forum". Its subject matter will include network security and reliability, physical and cyber security, network vulnerabilities, and how other critical infrastructures may impact CMRS networks. The event is closed to the public. At 12:30 PM Dick Clarke, Special Advisor to the President for Cyberspace Security and Chairman of the President’s Critical Infrastructure Protection Board, will speak. A CTIA release states that "Only lunch sessions are open to the media. Credentials required for admittance." For more information, contact Kimberly Kuo at 202 736-3202 or Location: Omni Shoreham Hotel, Empire Ball Room, 2500 Calvert Street, NW.

8:30 - 9:30 AM. The High Tech Broadband Coalition (HTBC) will host a press briefing breakfast regarding its participation in the FCC's proceedings pertaining to regulatory treatment of high speed Internet access. The HTBC wants the FCC to relax regulatory restraints imposed on incumbent local exchange carriers (ILECs) in the roll out of high speed Internet access. The participants will include E. Van Cullens (Westell), Jim Hjartarson (Catena Networks), Michael Norris (NextLevel Communications), Gregory Jones (Texas Instruments), Jerry Fiddler (Wind River Systems), George Nolan (Siemens), George Brunt (Alcatel), Doug Clark (ADC), Matt Flanigan (TIA), and Gary Shapiro (Consumer Electronics Association). Press contact: Jeri Clausing (BSA) at (202 530-5127 or Location: National Association of Manufacturers, 1331 Pennsylvania Ave., Suite 600, NW. Enter off F St. between 13th & 14th Streets.

9:00 AM. Day two of a two day meeting of Information Systems Technical Advisory Committee (ISTAC) of the Commerce Department's Bureau of Industry and Security (formerly known as the Bureau of Export Administration). The ISTAC advises the BIS on technical questions that affect the level of export controls applicable to information systems equipment and technology. The meeting will be partly open, and partly closed. The agenda for the open portion of the meeting includes a presentation on China's high performance computing market and a presentation on semiconductor manufacturing trends. The agenda for the closed portion of the meeting is secret. See, notice in the Federal Register, October 22, 2002, Vol. 67, No. 204, at Page 64868. Location: Room 3884, Hoover Building, 14th Street between Pennsylvania and Constitution Ave., NW.

10:00 AM. The Senate Judiciary Committee will hold a business meeting. Location: Room 226, Dirksen Building.

12:00 NOON. Deputy Treasury Secretary Kenneth Dam will give a speech to the Tax Foundation 65th National Conference. Location: Four Seasons Hotel, 2800 Pennsylvania, Ave., NW.

2:00 PM. The Senate Judiciary Committee's Subcommittee on on Technology, Terrorism, and Government Information will hold a hearing titled "America Still Unprepared -- America Still in Danger: The October 2002 Hart -- Rudman Terrorism Task Force Report". Sen. Dianne Feinstein (D-CA) will preside. Location: Room 226, Dirksen Building.

Friday, November 15
Day two of a three day conference of the Federalist Society. At 1:30 - 3:00 PM there will be a panel titled "Corporations, Securities and Antitrust Group: Competition and Regulatory Federalism". The speakers will be Timothy Muris (FTC Chairman), Hewitt Pate (Antitrust Division), and Judge Diarmuid O'Scannlain (Court of Appeals, 9th Circuit). At 3:15 - 4:45 PM there will be a panel titled "Financial Services and Electronic Commerce Group: The USA PATRIOT Act, Homeland Security, and the Financial Services Industry". The speakers will be David Aufhauser, General Counsel, U.S. Department of Treasury), Andrew Cochran (House Financial Services Committee), John Pickering (Balch & Bingham), James Rockett (McCutchen, Doyle, Brown & Enerson), Mary Beth Buchanan (U.S. Attorney, Western District of Pennsylvania). See, schedule and online registration page. Location: Mayflower Hotel, 1127 Connecticut Ave., NW.

9:00 AM - 3:30 PM. EntrepreneurPR will host an event titled "Small Business Intellectual Property Conference". The scheduled speakers include Sharon Marsh (Administrator for Trademark Policy and Procedure, USPTO) and Michael See (Small Business Administration). The price to attend is $125. The notice states that there are "no fees for members of the media or government staff". Location: Room 311, Cannon House Office Building.

TIME? Day two of a two day conference hosted by Cellular Telecommunications and Internet Association (CTIA) titled "Homeland Security Critical Issues Forum". Its subject matter will include network security and reliability, physical and cyber security, network vulnerabilities, and how other critical infrastructures may impact CMRS networks. The event is closed to the public. At 12:30 PM, Nancy Wong, Deputy Director, National Outreach and Awareness, Critical Infrastructure Assurance Office (CIAO), will speak. A CTIA release states that "Only lunch sessions are open to the media. Credentials required for admittance." For more information, contact Kimberly Kuo at 202 736-3202 or Location: Omni Shoreham Hotel, Empire Ball Room, 2500 Calvert Street, NW.

CANCELLED: TO BE DECIDED WITHOUT ORAL ARGUMENT. 9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Aerco Broadcast Corp v. FCC, No. 01-1466. Judges Sentelle, Henderson and Silberman will preside. Location: Courtroom 20, 333 Constitution Ave., NW.

Monday, November 18
7:00 AM - 2:00 PM. The Information Technology Association of America (ITAA), Northern Virginia Technology Council, Business Software Alliance (BSA), and others, will host a conference titled "Technology and Homeland Security: A Symposium with Public Sector CIOs". The speakers include Rep. Tom Davis (R-VA), Steve Cooper (CIO of the Office of Homeland Security), and Mark Everson (Office of Management and Budget). The price to attend is $65. To register, or for more information, contact Michael Kerr at Location: The Ritz Carlton Tysons Corner, 1700 Tysons Boulevard, McLean, VA.

8:00 - 11:00 AM. There will be an event titled "Homeland Security Financing Briefing". It is organized by Equity International. For more information, contact Bill Loiry or Carrie Brown at 202 756 2244. Location: Holeman Lounge, National Press Club, 529 14th St., NW.

Deadline to submit comments to the President's Critical Infrastructure Protection Board regarding the document titled "National Strategy to Secure Cyberspace", which was released on September 18. For more information, contact Tommy Cabe at 202 456-5420. See, notice in the Federal Register.

Tuesday, November 19
9:30 AM - 12:00 PM. The Department of State's (DOS) Office of the Coordinator for International Communications and Information Policy will host a public meeting to receive comments regarding the role of International Mobile Satellite Organization (IMSO) with respect to the Global Maritime Distress and Safety System (GMDSS), aeronautical safety services, and service to rural and remote areas of developing countries, including the principle and the legal methodology of a possible extension or expansion of IMSO's mandate. See, notice in the Federal Register . For more information, contact Brian Hunt at 202 647-5832 or huntbj Location: DOS, 2201 C Street NW.

12:15 PM. The FCBA's Common Carrier Committee will host a brown bag lunch. The speakers will be the FCC Commissioners' wireline competition advisors. Location: Willkie Farr & Gallagher, 1875 K Street, 2nd Floor, NY Conference Room.

5:30 - 6:45 PM. Richard Posner, Judge of the U.S. Court of Appeals (7thCir), will give a lecture titled "The Political Economy of Intellectual Property Law" at an AEI-Brookings Joint Center event. A wine and cheese reception will follow at 6:45 PM. See, online registration page. Location: AEI, Wohlstetter Conference Center, 12th Floor, 1150 17th Street, NW.

6:00 - 8:00 PM. The FCBA will host a CLE seminar titled "The FCC’s Triennial Review of Unbundled Network Elements: How Significant are UNE-P and other UNEs to Local Competition?" Registrations and cancellations due by 5:00 PM on November 15. Location: Dow Lohnes & Albertson, Suite 800, 1200 New Hampshire Avenue, NW.

Deadline to submit reply comments to the FCC regarding its request to refresh its record regarding customer proprietary network information (CPNI) implications when a carrier goes out of business, sells all or part of its customer base, or seeks bankruptcy protection. This is the FCC's Third Further Notice of Proposed Rulemaking in CC Docket Nos. 96-115, 96-149 and 00-257. See, notice in the Federal Register.

Deadline to submit applications for planning and construction grants to the NTIA for public television facilities under the Public Telecommunications Facilities Program (PTFP). See, notice in the Federal Register.

Wednesday, November 20
8:30 AM - 4:30 PM. The Commerce Department's Bureau of Industry and Security (BIS) will host a one seminar titled "Essentials of Export Controls". It will cover compliance with the Export Administration Regulations (EAR). The price to attend is $150. See, BIS notice. For more information, contact Yvette Springer at 202 482-6031. Location: Grand Hyatt Washington, 1000 H. Street, NW.

12:00 NOON. The FCBA's Transactional Practice Committee will host a brown bag lunch on the Sarbannes Oxley Act. RSVP to Donna Farber at Location: Latham & Watkins, Lincoln Square Bldg., Suite 1000, 555 Eleventh St., NW.

12:30 PM. The FCBA will host a luncheon. The speaker will be NFL Commissioner Paul Tagliabue. The price is $45 for members, $35 for government & law student members, and $55 for non-members. Registrations and cancellations are due by 5:00 PM on November 15. For more information, call 202 293-4000. Location: JW Marriott Hotel, 1331 Pennsylvania Avenue, NW.

More News
11/13. The Federal Communications Commission (FCC) adopted a Report and Order [117 pages in PDF] amending its Broadcast Auxiliary Service (BAS) rules. The Order states that this is "to permit BAS stations to introduce new technologies and create a more efficient BAS that can more readily adapt as the broadcast industry converts to the use of digital technology, such as digital television (DTV)." See also, FCC release [PDF].

11/12. The U.S. Court of Appeals (1stCir) issued its opinion in In Re Cabletron, a class action securities case involving the pleading standards of the Private Securities Litigation Reform Act of 1995 (PSLRA).

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.