EchoStar wrote in a release that "Under terms of the settlement, EchoStar has paid to Hughes $600 million in cash, and Hughes will retain its 81 percent ownership position in PanAmSat".

The proposed merger floundered because of the controversial decision of the Federal Communications Commission (FCC) declining to approve the transfer of FCC licenses associated with the merger, followed by the Department of Justice's (DOJ) action to block the merger.

See also, TLJ story titled "FCC Declines to Approve EchoStar DirectTV Merger", October 10, 2002.

The debate at this point is largely hypothetical. It perhaps reflects early positioning by participants in a possible future legal and regulatory contest.

The CBUI, which includes Microsoft, Disney, NAM, ITAA, CEA, Apple, Amazon, eBay, and others, wrote last month to state that "The myriad benefits of the Internet Age flow from one fundamental feature -- the ability of consumers and businesses to communicate with one another and lawfully to create, share and access information, all without obstruction from network service providers."

Of course, the "network service providers", including the cable companies providing cable modem service, and the ILECs providing DSL service, have not blocked or limited anyone's ability to communicate over their network facilities. Hence, there is not yet a ripened conflict between any CBUI member and any network service provider.

The NCTA, which represents cable companies, wrote in response that "We agree that consumer access to Internet content is, and should be, full and unfettered. To the extent the Coalition suggests that government action is necessary to achieve this result, however, we must strongly disagree." That is, it points out that there is now no conflict, but the FCC should do nothing that might prevent it from discriminating against any content, application or service provider operating on the periphery of its members' networks. Thus, this suggests that it is possible that a cable company might do so in the future, and the FCC, and other policy making bodies, would then be faced with a concrete dispute.

The content group (CBUI) elaborated in its letter on Internet openness. It wrote that "Even before the Internet was invented, the FCC and policymakers around the globe recognized the value of this principle. They are to be commended for having assured for decades that, by law, network operators cannot infringe or encumber the relationships among their customers or between their customers and destinations on the network. Adherence to this principle has led to the development of a competitive market for data processing, content distribution, Internet access, interactive services, and the development of devices attached to those offerings. We urge the Federal Communications Commission to bring this fundamental rule forward, into the broadband era."

The CBUI added that "We are extremely concerned, however, that the robustness and innovativeness of the Internet will be at risk and broadband adoption will be slowed unless the FCC takes the necessary steps to preserve this principle."

NCTA, in rebuttal, called this "common carrier-like requirements on cable operators". It wrote that "Cable operators offer their subscribers unrestricted access to Internet content and the ability to run applications of their choice because consumers demand those capabilities, not because cable companies were ordered to do so by the government. The imposition of cumbersome, unneeded government requirements on cable operators would actually impede broadband deployment. It would entangle operators in regulatory disputes and create the risk that market participants will exploit government process to delay or hobble rivals."

The NCTA goes on to state that the CBUI "does not provide any evidence of harm". But then, the NCTA offers no assurances that it will not, in the future, create such evidence.

The NCTA letter dismisses the Coalition of Broadband Users and Innovators as "led by Microsoft and The Walt Disney Company". In fact, the group is far larger and broad based.

It includes major companies that conduct sales, provide services, and facilitate discussion, over the Internet, but do not themselves own any part of the network, or have contracts with network companies guaranteeing access to the network. These companies include Amazon, eBay and and Yahoo.

The CBUI also includes companies (and the trade groups that represent them) that make computer equipment and consumer electronics equipment used in Internet communications. These include the Apple, Consumer Electronics Association, Radio Shack, and the National Association of Manufacturers.

The FCC and NTIA added that the meeting's "purpose was to institutionalize and elevate the coordination between the two agencies beyond historical levels, given the importance of spectrum management to the country." The FCC and NTIA added that "in the near future they will execute a new Memorandum of Understanding (MOU) detailing the terms of their interaction. Since the execution of the original MOU in the 1940's, the FCC and the NTIA's predecessor have managed spectrum without updating that document."

Powell (at right) stated in a release that "Our spectrum policies need to reflect this dynamic marketplace and to be flexible enough to keep up with innovation. I am pleased that Assistant Secretary Victory has made spectrum policy one of her top priorities. NTIA and the FCC are essential partners on the frontier of spectrum policy reform and I look forward to working closely with Assistant Secretary Victory on these important initiatives."

The FCC and NTIA outlined the topics addressed at the meeting. These included "The existing process for coordinating government and commercial use of the spectrum; A mutual interest in fostering intensive use of the spectrum while diminishing the potential for harmful interference to existing spectrum users and new entrants; Emerging technologies with potential for addressing a variety of spectrum access and interference concerns; The issue of alternative licensing regimes and the success of the unlicensed model in promoting innovation; Strengths and weaknesses of various licensing models, and the factors that should be weighed when considering adoption of particular licensing regimes, with a particular focus on sharing best practices to speed reform."

Other participants in the meeting included Michael Gallagher (Deputy Assistant Secretary of Commerce, NTIA), Fred Wetland (Acting Assistant Administrator for the Office of Spectrum Management, NTIA), Bryan Tramont (Senior Legal Advisor to Powell), Edmond Thomas (Chief of the FCC's Office of Engineering & Technology), and Tom Sugrue (Chief of the FCC's Wireless Telecommunications Bureau).

Muris began by stating that this speech is about "my philosophy about the appropriate content of the FTC's competition policy strategy and to explain the logic of the positive agenda used to implement the strategy. Because I have discussed our enforcement program in great detail on other occasions, I will place that program in a broader context and describe some of our non-enforcement projects in greater detail than I have previously done."

He then listed four general principles that "should inform the development of the FTC's competition policy strategy and the preparation of a positive agenda for executing the strategy". First, "Play an active role in promoting competition as the basic principle of economic organization through strong enforcement and focused advocacy". Second, "Focus its antitrust enforcement resources on conduct that poses the greatest threat to consumer welfare".

Third, "Make full use of the agency's distinctive institutional capabilities by applying the entire range of its policy instruments to solve competition policy problems". And fourth, "Attach a high priority to improving the institutions and processes by which antitrust policy is formulated and applied".

Muris then elaborated on each of these four principles in order. "More than a mere collection of laws, the antitrust laws and the pro-competition ethic they embody serve as an organizing principle in our country's economy. Antitrust plays a major role in shaping our markets, institutions, and the relationships among market participants", said Muris. "Effective antitrust enforcement may preclude direct, command-and-control regulation of sectors of the economy, avoiding the significant inefficiencies such regulation entails. By spurring competition, antitrust contributes to a market system that provides lower prices, encourages greater innovation, and generates faster responses by business to changing consumer needs and desires."

He stated that "Rules of contract and property law may not provide effective deterrence of, or remedies for, anticompetitive conduct." He added in a footnote that "the rights conferred by other legal regimes, such as intellectual property law, may appear to conflict with the goals of antitrust. Over the past ten months, the FTC and the Department of Justice have been exploring these issues in our hearings on Competition and Intellectual Property Law and Policy in the Knowledge Based Economy. We will issue a report on the topic next year. I think the tensions or conflicts are overblown. Properly understood, IP law and antitrust law both seek to promote innovation and enhance consumer welfare."

He then said government can deal with anticompetitive conduct either through antitrust law, or through "comprehensive sectoral regulation", which is "often at great costs". He praised antitrust law, and criticized sectoral regulation. "Sectoral regulation may be appropriate in certain, limited applications, but it is the antithesis of competition, with its restrictions on price, entry, and conduct. A large and sad literature documents how sectoral regulation often has harmed consumers by imposing needless controls on entry, pricing, and new product development."

He did not address the Federal Communications Commission (FCC), which has long engaged in sectoral regulation, and more recently, antitrust law as well.

Muris next lamented at length two limitations on federal antitrust authority -- the Noerr doctrine and the state action doctrine. He elaborated that government is huge, and state governments engage in rent seeking behavior that harms consumers.

He said that he has formed an FTC "State Action Task Force" that "has been conducting a careful analysis of existing state action case law, seeking to identify opportunities to direct the development of that case law in a manner that promotes competition and enhances consumer welfare. I anticipate that these opportunities will include bringing cases and participating in state and local regulatory proceedings."

He also briefly criticized the notion of creating statutory antitrust exemptions. He said that they "usually cannot withstand scrutiny". Of note to technology lawyers is a reference in his footnote 52, which lists the attempt in the 107th Congress to create an exemption for sharing cyber security related information. Sen. Robert Bennett (R-UT) is a leading proponent of this exemption.

Muris concluded that "Too many business practices stand outside the universe of conduct that should be subject to antitrust scrutiny." However, he did not address the Telecommunications Act of 1996, the Goldwasser case, or related cases.

He then moved on to his second principle, regarding strong enforcement.

Here, he again addressed intellectual property. He said that "The pharmaceutical and standard setting cases discussed infra highlight an area in which the agency is devoting substantial resources to identify enforcement targets -- the nexus between intellectual property and antitrust. Some firms are trying to extend their IP rights unlawfully. A number of our recent non-merger cases focus on whether firms took actions to ``protect´´ their IP rights in a manner that we allege is illegal. The agency has responded to the centrality of intellectual property issues in these cases and other investigations, in part, by forming an Intellectual Property Case Generation Working Group whose responsibility it is to identify and investigate widespread or significant practices that have anticompetitive effects without corresponding consumer benefits."

He then waded through enforcement involving horizontal mergers and horizontal agreements, single firm conduct, and vertical mergers and vertical agreements. In particular, he covered the Dell and Rambus matters, which involved standard setting and patents. For example, wrote Muris, the Dell matter "involved the alleged failure of a participant in a standard setting process to disclose its patent position, contrary to the rules of the organization, and then, after its technology was adopted in the standard, the company sought to enforce the patent. Such conduct can result in higher costs for consumers when there are substantial costs in switching to an alternative technology. The competitive danger is greater in these IP cases than in some other standard setting situations because of the risk of monopolization by a single firm. In addition, patent obstacles may make the monopoly more durable than would otherwise be the case."

He also reviewed the Synopsys Avant merger, which involved two complementary integrated circuit design software products.

He then addressed his third principle, regarding making use of the FTC's institutional attributes. He stated that "These capabilities include expansive power to conduct studies or perform research about the economy; a broad charter to act as an advocate for competition before other government bodies; and authority to use administrative adjudication to resolve competition policy disputes."

And here, he focused on the FTC's e-commerce task force. He said that "In August 2001, I created a Task Force to examine possible anticompetitive efforts to restrict competition on the Internet. The Task Force is analyzing state regulations, such as occupational licensing and physical office requirements, that may have pro-consumer or pro-competition rationales, but that nevertheless may restrict the entry of new Internet competitors. The Internet Task Force also is examining barriers that arise when private parties employ potentially anticompetitive tactics, such as when suppliers or dealers apply collective pressure to limit online sales. These possible barriers fall at the intersection of competition and consumer protection (with restrictions on the former often justified in the name of the latter) and at the intersection of law and empirical economics -- confluences that the Commission is particularly well suited to address." (Parentheses in original.)

He added that the FTC "has opened several investigations concerning possible anticompetitive restrictions on e-commerce, and the Task Force has taken the lead in drafting several competition advocacy pieces."

He also called for more economic research and development. He said that "To position ourselves to make intelligent contributions to competition policy through litigation or non-litigation instruments, we must make substantial investments in what might be called competition policy research and development."

Finally, he addressed his fourth principle, regarding improving competition policy institutions and processes. He discussed, among other things, various international agreements and cooperation.

The speech was titled "Looking Forward: The Federal Trade Commission and the Future Development of U.S. Competition Policy". Muris addressed the Milton Handler Annual Antitrust Review.

The meeting agenda indicates that the FCC will likely adopt several spectrum related notices of inquiry. The FCC's Spectrum Policy Task Force (SPTF) released its Report [73 pages in PDF] on November 15. Several items on the agenda relate to issues addressed in the report.

One item is a NOI regarding "the effectiveness of current regulatory tools in facilitating the delivery of spectrum based services to rural areas and the extent to which rural telephone companies and other entities seeking to serve rural areas have opportunities to provide spectrum based services."

Another item is a NOI "concerning the possibility of permitting unlicensed transmitters to operate in additional frequency bands". The agenda further specifies that this would be spectrum bands "Below 900 MHz and in the 3 GHz Band".

Another item is a NOI "seeking information that can be used to analyze the status of competition in the CMRS industry for purpose of its Eighth Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services."

There are two other items. The FCC will consider a Further Notice of Proposed Rulemaking concerning "access to emergency services from services and devices that may not be currently within the scope of the Commission’s E911 rules", and the FCC's Wireless Telecommunications Bureau will report on "the status of unintentional wireless 911 calls".

The meeting will be held in the Commission Meeting Room, TW-C305, at the FCC offices at 445 12th Street, SW. It is open to the public, and web cast.

The ACTPN advises the U.S. Trade Representative (USTR) on matters concerning objectives and bargaining positions before entering into a trade agreement, the operation of any trade agreement once entered into, and other matters arising in connection with trade policy of the United States. See, ACTPN Charter.

The list of prospective members includes representatives of major export industries, including technology companies, as well as domestic industries threatened by foreign imports, such as steel and textiles.

The President's list includes several heads of several leading technology companies, including Samuel Palmisano (P/CEO of IBM), Meg Whitman (P/CEO of eBay), Hector Ruiz (P/CEO of Advanced Micro Devices), and Thomas Mottola (Ch/CEO of Sony Music Entertainment).

Many software, hardware, equipment, services, telecommunications, and entertainment media companies derive a significant proportion, if not most, of their revenues from international sales. Hence, they tend to have a strong interest in free trade, and low or zero tariffs. Technology and entertainment companies also tend to support trade agreements that include provisions strengthening intellectual property laws, and enforcement, abroad. Telecom companies tend to support trade agreements that include provisions that require other nations to remove barriers to competition with incumbent government telecom monopolies or dominant providers.

The 2001 list of ACTPN members includes Louis Gerstner (IBM) and Jack Valenti (Motion Picture Association of America). The telecom sector was represented by Roy Neel (formerly head of the U.S. Telephone Association), and Solomon Trujillo (formerly with US West).

The list just announced by President Bush contains no CEOs of ILECs or IXCs. However, it does include Robert Grady, of Carlyse Group. This is a private global investment firm that focuses on, among other things, information technology, telecommunications, and media. Louis Gerstner will become its Chairman on January 7, 2003. See, release. Its managing directors include William Kennard (former FCC Chairman), and veterans of U.S. telecom and tech companies. Grady himself was previously a Managing Director at Robertson Stephens, a technology investment bank based in San Francisco. He is now the managing partner of Carlyle Venture Partners I and II, which focus on technology infrastructure for enterprises, software, technology and services for communications networks, and healthcare information technology and devices.

The list of new ACTPN members may also include a telecom sector representative. Although, it is not a well known person. It lists a "Morgan Yaping Wang, CEO and Chairman, Angeles Optics, Inc."

The White House press office did not return calls from TLJ. The Office of the USTR refused to comment to TLJ. Reports filed with the Federal Elections Commission (FEC) record contributions made by a Morgan Yaping Wang, a Yaping Wang, and a Morgan Wang. See, for example, Political Money Online's page [PDF] from the Republican National Committee's (RNC) Republican National State Elections Committee June 2001 report, covering receipts for the month of May, 2001. It lists a $100,000.00 soft money contribution from a Morgan Yaping Wang.

A RNC representative responded to TLJ that "after my extensive search for Mr. Morgan Yaping Wang, I have found no information on him."

10:00 - 11:30 AM. The FCC will hold a public forum to unveil the new concept designs for online filings. Location: FCC, 12th Street, SW, Conference Room #1, 8th Floor.

10:20 - 10:45 AM. The Department of Commerce (DOC) will host an event for the signing of a Protocol Agreement between the U.S. and the P.R. China pertaining to technology. Commerce Secretary Don Evans and Chinese Minister of Science and Technology Xu Guanhua will sign the agreement. The DOC stated in a release that the agreement "reaffirms each country’s continued commitment to strengthen the on-going bilateral dialogue on technology, innovation and entrepreneurship." The DOC also stated that "Future cooperation will focus on exchanging perspectives on a range of issues related to technology innovation, standards, technology transfer, financing research and development, and intellectual property rights protection." For more information, contact Trevor Francis at 202 482-4883 or TFrancis@doc.gov. Location: Secretary Evans' Conference Room, 5th Floor, DOC, 14th and Constitution Ave., NW.

12:15 PM. The FCBA's Mass Media Practice Committee will host a brown bag luncheon. The speakers will be Brooks Boliek (Hollywood Reporter), Bridgette Greenberg (Communications Daily), Doug Halonen (Electronic Media), Ted Hearn (Multichannel News), Bill McConnell (Broadcasting and Cable), and Leslie Stimson (Radio World). RSVP to Barry Umansky at 202 263-4128 or barry.umansky @thompsonhine.com. Location: National Association of Broadcasters (NAB), 1st Floor Conference Room, 1771 N Street, NW.

1:30 PM. The FCC will hold a meeting. See, agenda. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

12:00 NOON. The Cato Institute will host a Capitol Hill briefing titled "Yellow Light on Total Information Awareness". The scheduled speakers include Wayne Crews, Robert Levy, and Charles Peña. See, notice and online registration form. Location: 1539 Longworth House Office Building.

The FCBA will host its annual Chairman's Dinner. See, registration form [PDF]. Location: Washington Hilton and Towers.

Day one of a two day conference hosted by the Practicing Law Institute and the FCBA titled "Telecommunications Policy and Regulation". At 12:15 PM FCC Commissioner Kevin Martin will deliver a keynote address. Location: Reagan International Trade Center.

9:30 AM. The U.S. International Trade Commission (USITC) will meet regarding the preliminary countervailing duty investigation regarding DRAMs and DRAM Modules from Korea (Investigation No. 701-TA-431). See, notice published in the Federal Register. Location: Main Hearing Room, ITC Building, 500 E Street, SW.

Day two of a two day conference hosted by the Practicing Law Institute and the FCBA titled "Telecommunications Policy and Regulation". Location: Reagan International Trade Center.

EXTENDED TO JANUARY 17. Deadline to submit reply comments to the FCC in response to its Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection". This NPRM proposes that the FCC promulgate a broadcast flag rule, and seeks comment on this, and related questions. This is MB Docket No. 02-230. See also, FCC release [PDF] and Order [PDF] of October 11, 2002 extending deadlines.

12:15 PM. The FCBA's Professional Responsibility Committee will host a brown bag luncheon. For more information, contact Frank Montero at 202 663-8936. RSVP to wendy@fcba.org. Location: Arnold & Porter, 555 12th St., NW.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding its draft publication [90 pages in PDF] file titled "Security Metrics Guide for Information Technology Systems". This is NIST Special Publication 800-55. It was written by Marianne Swanson, Nadya Bartol, John Saboto, and Joan Hash in the NIST's Information Technology Laboratory's Computer Security Division. Send comments to marianne.swanson@nist.gov.

10:00 AM - 12:00 NOON. The Department of State's (DOS) U.S. International Telecommunication Advisory Committee (ITAC) will hold a meeting to discuss matters related to the World Summit on the Information Society (WSIS) scheduled for December 2003. See, notice in the Federal Register, December 3, 2002, Vol. 67, No. 232, at Page 72018. Location: National Academy of Sciences, 2100 C St. NW.

1:30 - 3:30 PM. The FCC's WRC-03 Advisory Committee, Informal Working Group 7, Regulatory Issues and Future Agendas, will meet. Location: Boeing Company, Arlington, VA.

2:00 PM. The Securities and Exchange Commission (SEC) will hold a roundtable meeting to discuss the international impact of proposed rules to be promulgated under the Sarbanes Oxley Act of 2002 on attorney conduct. Audio of the meeting will be web cast. See, SEC release. Location: SEC headquarters, 450 Fifth Street, NW.

Donaldson stated that "Until my nomination is confirmed by the Senate, I believe it would be inappropriate for me to comment on exactly what I hope to accomplish as chairman of the SEC. Let me just simply say that I am firmly committed to doing everything that I can do to restore the confidence of investors in the U.S. corporate and financial industry." See, White House release and transcript of President Bush's remarks at event introducing Donaldson.

Sen. Paul Sarbanes (D-MD), who will be the ranking Democrat on the Senate Banking Committee in the next Congress, stated in a release that "I look forward to a thorough confirmation process in which Mr. Donaldson's record will be carefully examined and his views on the challenges facing the SEC fully reviewed. Among these challenges is effective implementation of the accounting reform and investor protection legislation, including immediate full funding for the SEC and appointment of a highly qualified chairman of the accounting oversight board."