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September 16, 2004, 9:00 AM ET, Alert No. 978.
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DOJ Charges Infineon With Felony Price Fixing; Infineon Pleads Guilty

9/15. The U.S. Department of Justice (DOJ) filed a criminal information in the U.S. District Court (NDCal) against Infineon Technologies AG, charging price fixing in violation of 15 U.S.C. § 1. Simultaneously, Infineon agreed to plead guilty and to pay a $160 Million fine. See also, DOJ release and Infineon release.

The information alleges that "From on or about July 1, 1999 until on or about June 15, 2002, defendant INFINEON and its coconspirators, entered into and engaged in a combination and conspiracy in the United States and elsewhere to suppress and eliminate competition by fixing the prices of Dynamic Random Access Memory ("DRAM") to be sold to certain original equipment manufacturers of personal computers and servers ("OEMs")."

The information also explains that "DRAM is the most commonly used semiconductor memory product. DRAM provides high-speed storage and retrieval of electronic information in personal computers, servers and other devices."

This plea agreement requires court approval. The DOJ did not release a copy of a plea agreement.

John AshcroftAttorney General John Ashcroft stated that "This case sends the message that high-tech price-fixing cartels will not be tolerated -- a message reinforced by the largest criminal fine levied in a Department of Justice case in the past three years ... Vigorous antitrust enforcement is important to our nation's economy. We are committed to pursuing illegal price-fixing cartels that harm American consumers, regardless of whether they are at home or abroad."

Hewitt Pate, the Assistant Attorney General in charge of the DOJ's Antitrust Division, stated that "This case reinforces the importance of antitrust enforcement in high-technology markets, one of the most important sectors of the American economy."

Pate has spoken often about cartels and price fixing. Most recently, on September 10, 2004, he gave a speech in Tokyo, Japan. He spoke at length about how the DOJ uncovers, prosecutes and deters cartels and price fixing. (See, the 11th through 22nd paragraphs of the prepared text of his speech.)

The Statute. 15 U.S.C. § 1 now provides, that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court"

The Congress just amended this and other antitrust provisions in HR 1086, a composite bill that includes the "Antitrust Criminal Penalty Enhancement and Reform Act". President Bush signed this bill on June 22, 2004. It is now Public Law No. 108-237. See, story titled "Bush Signs Standards Development Organization Advancement Act" in TLJ Daily E-Mail Alert No. 927, June 28, 2004.

This bill greatly increased the maximum fines and prison terms for price fixing and other offenses, thereby incenting companies like Infineon to reach plea agreements like the one just announced. Title II of HR 1086 is the "Antitrust Criminal Penalty Enhancement and Reform Act". Title II raises penalties for violations of 15 U.S.C. § 1 (combinations in restraint of trade, including cartels, and price fixing), 15 U.S.C. § 2 (monopolies), and 15 U.S.C. § 3.

DRAM Purchasers. The information states that "The OEMs that were affected by the conspiracy to suppress and eliminate competition were: Dell Inc., Compaq Computer Corporation, Hewlett-Packard Company, Apple Computer, Inc., International Business Machines Corporation and Gateway, Inc."

Infineon stated in its release that "The wrongdoing charged by the DoJ was limited to certain OEM customers. Infineon is already been in contact with these customers and has achieved or is in the process of achieving settlements with all of these OEM customers."

Impending Charges. This information charges only Infineon. It does not charge any of the individual directors, officers or employees of Infineon, or any other DRAM producers. However, the information does allege unnamed "coconspirators".

Infineon stated in its release that "the matter has been fully resolved between Infineon and the DoJ".

James Griffin, the DOJ's Antitrust Division's Deputy Assistant Attorney General for Criminal Enforcement stated that "Infineon is the first company to agree to plead guilty to price-fixing charges in our ongoing investigation of antitrust violations in the DRAM industry ... Infineon will provide valuable assistance in our continued investigation of the DRAM industry."

Legal Terminology. In criminal procedure, the term "information" means a written document that charges a person or entity with a crime, and hence informs the accused of the crime. An information is written by a prosecutor, and initiates a criminal court proceeding. However, unlike an indictment, it is not returned (that is, issued) by a grand jury.

The U.S. Constitution provides that "No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury ..." Infineon could have asserted its right to an indictment. However, since this case was negotiated, and involved a plea agreement, a formal indictment was not necessary.

House and Senate Committees to Hold Hearings on Wireless Number Privacy

9/15. The Senate Commerce Committee scheduled a hearing for Tuesday, September 21 on S 1963, the "Wireless 411 Privacy Act". The House Commerce Committee will likely hold its own hearing on 411 privacy.

Sen. Arlen Specter (R-PA) and Sen. Barbara Boxer (D-CA) introduced S 1963 on November 25, 2003.

S 1963 recites in its findings that wireless customers "benefit from the fact that wireless phone numbers have not been publicly available", and that, "up until now, the privacy of wireless subscribers has been safeguarded and thus vastly diminished the likelihood of subscribers receiving unwanted or annoying phone call interruptions on their wireless phones".

It further states that "the wireless industry is poised to begin implementing a directory assistance service so that callers can reach wireless subscribers, including subscribers who have not given such callers their wireless phone number".

The bill concludes that "because wireless users are typically charged for incoming calls, consumers must be afforded ... control over the disclosure of their wireless phone number".

S 1963 would provide that "A provider of commercial mobile services ... may not include the wireless telephone number information of any current subscriber in any wireless directory assistance service database unless" it "obtains express prior authorization" from the subscriber. Also, for new subscribers, the provider would be required to give notice of the right not to be listed in a directory assistance service database, and to provide convenient mechanisms for the subscriber to decline to be listed. It also requires that service providers cannot charge for not listing phone numbers.

The companion bill in the House is HR 3558. See, story titled "Rep. Markey and Rep Pitts Introduce Bill to Limit Wireless Directory Assistance" in TLJ Daily E-Mail Alert No. 784, November 21, 2003. See also, S 1973.

Sen. John McCain (R-AZ), Rep. Joe Barton (R-TX), and Rep. Fred Upton (R-MI) sent a letter to wireless phone companies asking for information about whether they will offer wireless directory assistance, whether they will allow subscribers to keep their numbers private, and whether they plan to charge consumers for privacy.

rightSen. McCain is the Chairman of the Senate Commerce Committee, and will preside at next week's hearing. Rep. Barton (at right) is the Chairman of the House Commerce Committee. Rep. Upton is the Chairman of the Subcommittee on Telecommunications and the Internet.

The letter states that "Recent press accounts indicate that a consortium of five of the six national wireless carriers, with the assistance of the Cellular Telecommunications & Internet Association, are creating a multi-carrier database of subscribers’ phone numbers in order to provide the wireless phone numbers of their customers to consumers who call directory assistance services (also known as “411” services). While presenting an opportunity for wireless telephone consumers, including subscribers without wireline phones and small business users, to make their telephone numbers more widely available to friends and to potential customers, this action also raises issues of wireless telephone number privacy that are of great interest to the American public and to Congress." (Parentheses in original.)

The letter was sent to Timothy Donahue of Nextel, Robert Dotson of T-Mobile, Gary Forsee of Sprint, Stanley Sigman of Cingular, Dennis Strigl of Verizon Wireless, and John Zeglis of AT&T Wireless. It references upcoming hearings, and propounds the following questions, to be answered by September 20:

   "1. If you offer wireless directory services, will your subscribers be given a choice of whether to have their number(s) listed in a directory or not?  If so, how would they exercise such choice (i.e. opt-in or opt-out), and would it vary depending on whether it was a new or existing subscriber making the choice?
   2. Do you plan to charge subscribers to keep their wireless number(s) unlisted?
   3. Are your current terms of service with customers consistent with your responses to questions 1 and 2?"

Rep. Dreier Addresses the eBay Economy

9/14. Rep. David Dreier (R-CA) spoke in the House about eBay. He said that "last week, we had a great statement made by Vice President Cheney talking about the new 21st century vibrant economy. He pointed to the fact that there are, in this new economy, 430,000 Americans who make their income, their living, selling on eBay."

Rep. David Dreier

Rep. Dreier (at right) said that "They are entrepreneurs." See, Congressional Record, September 14, 2004, at Page H7079.

"Over the weekend, there were a number of pundits who criticized him, saying, Well, because of the slow economy, that Vice President Cheney was advocating that people go down and find something in the basement and sell it on eBay, and that will take care of them."

Rep. Dreier continued, "The fact of the matter is, that is not what he was saying. He was talking about an industry that did not exist 10 years ago; eBay did not even exist. Today, we have got nearly half a million Americans earning their living on eBay. Frankly, if you look at the number of people who are selling things on eBay, it is in the millions."

AG Ashcroft Addresses Cyber Crime

9/13. Attorney General John Ashcroft gave a speech to the High Technology Crime Investigation Association in which he provided an overview of cyber threats, and the Department of Justice's (DOJ) cybercrime related activities.

He wrote in the prepared text of this speech that "Over the past few decades, we have seen human ingenuity unleash new ideas, new products, and new ways of doing business. Freedom and innovation created the personal-computing revolution -- a revolution that has extended the influence of the Internet beyond all known borders to expand commerce, increase trade, and deliver unimagined possibilities to new spheres of human aspiration."

"But with this tremendous boon to economic growth and human potential, we have seen a small group of predators try to make cyberspace a place for crime and terrorism. It is the duty of the justice community to fight these predators."

He also stated that "We know from bitter experience that malicious code can invade the most advanced networks of our nation’s most innovative companies, threatening our economic leadership and livelihood. We have seen worms and viruses attack our government’s critical infrastructure, disrupting basic services and even potentially endangering national security. And with the increased use of the Internet and especially peer-to-peer networking, we have seen malicious code spread more quickly and infect more personal computers than ever before."

People and Appointments

Arden Bement9/15. President Bush nominated Arden Bement (at right) to be Director of the National Science Foundation (NSF) for the remainder of a six year term expiring August 2, 2010. Bement is currently the acting Director of the NSF and Director of the Department of Commerce's National Institute of Standards and Technology (NIST). See, White House release and second release. Phil Bond, the Under Secretary of Commerce for Technology, said in a statement that Hratch Semerjian, the Deputy Director of the NIST, would become acting Director of the NIST if the Senate confirms Bement to be NSF Director.

9/15. President Bush nominated Michael Seabright to be a Judge of the U.S. District Court for the District of Hawaii. See, White House release.

More News

9/15. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS/BXA), which regulates exports, announced in a release that it fined Lattice Semiconductor Corporation $560,000 for exporting semiconductor microchips and related technical data to the People's Republic of China. The BIS stated in its release that the fine pertains to "extended temperature range programmable logic devices". The BIS did not allege that Lattice actually exported chips. Rather, the BIS states that Lattice employed Chinese nationals in the U.S. The BIS stated that this constitutes a "deemed export" in violation of its export administration regulations (EAR).

9/14. The Office of the U.S. Trade Representative (USTR) announced the signing of a free trade agreement (FTA) between the U.S. and Bahrain. See, USTR release. The USTR did not release the text of an FTA. Rather, its released a short summary.

9/14. Sen. Dianne Feinstein (D-CA) introduced S 2801, a bill pertaining to Social Security account number privacy protections, fraudulent misuse of the Social Security account numbers, and identity theft. It was referred to the Senate Finance Committee.

9/13. Rep. Chris Shays (R-CT) introduced HR 5067, a bill prohibit the double taxation of telecommuters. It was referred to the House Judiciary Committee. See also, story titled "Dodd and Lieberman Introduce Bill to End Double State Taxation of Teleworkers" in TLJ Daily E-Mail Alert No. 976, September 14, 2004.

There will be no issue of the TLJ Daily E-Mail Alert tomorrow, Friday, September 17, 2004.
Washington Tech Calendar
New items are highlighted in red.
Thursday, September 16

Rosh Hashanah.

The House will not meet.

The Senate will meet at 10:00 AM, in pro forma session only.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Polygram Hold Inc v. FTC, No. 03-1293. The Federal Trade Commission (FTC) filed its administrative complaint against Polygram and others on July 30, 2001 alleging unfair methods of competition in violation of Section 5 of the FTC Act by agreeing with competitor Warner Communications to restrict price competition and forgo advertising, in connection with the sale of audio and video recordings titled "Three Tenors". The FTC issued its order [8 pages in PDF] and the opinion [61 pages in PDF] of Chairman Timothy Muris on July 24, 2003, finding that the agreement between PolyGram and Warner unreasonably restrained trade and constitutes an unfair method of competition. Judges Ginsburg, Edwards and Rogers will preside. Prettyman Courthouse, 333 Constitution Ave., NW.

10:30 AM. Dane Snowden, Chief of the Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau, will hold a press briefing. RSVP to Rosemary Kimball at 202 418-0511 or Location: FCC, 445 12th St., SW, Hearing Room B/Conference Room, TW A-402/A-442.

Deadline for the President to submit a report to the Congress on the establishment and operation of the Terrorist Screening Center, established on September 16, 2003, by Homeland Security Presidential Directive/Hspd-6. This report is required by Section 360 of HR 2417, the "Intelligence Authorization Act for Fiscal Year 2004". See, story titled "Bush Signs Intelligence Authorization Bill" in TLJ Daily E-Mail Alert No. 799, December 15, 2003.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding Amateur Radio Service rules. The FCC adopted this NPRM on March 31, 2004, and released it on April 15, 2004. This NPRM is FCC 04-79 in WT Docket No. 04-140. See, notice in the Federal Register, August 17, 2004, Vol. 69, No. 158, at Pages 51028 - 51034.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to the Wireline Competition Bureau's (WCB) public notice inviting interested parties to update the record pertaining to petitions for reconsideration of the 1997 Price Cap Review Order. This is in CC Docket Nos. 94-1 and 96-262. See, notice [PDF].

Friday, September 17

The House will meet a 10:00 AM. No votes are expected. See, Republican Whip Notice.

11:00 AM. Jessica Litman (Wayne State University Law School) will present a paper titled "Sharing and Stealing" [47 pages in PDF] at an event hosted by the Dean Dinwoodey Center for Intellectual Property Studies at the George Washington University Law School (GWULS). For more information, contact Robert Brauneis at 202 994-6138 or The event is free and open to the public. See, notice. Location: GWULS, Faculty Conference Center, Burns Building, 5th Floor, 716 20th Street, NW.

Extended deadline to submit nominations to the U.S. Patent and Trademark Office (USPTO) for positions on the Patent Public Advisory Committee (PPAC) and the Trademark Public Advisory Committee (TPAC) with terms that begin November 27, 2004. See, original notice in the Federal Register, August 2, 2004, Vol. 69, No. 147, at Pages 46136 - 46137, and notice of extension in the Federal Register, September 3, 2004, Vol. 69, No. 171, at Page 53895.

Monday, September 20

12:30 PM. Secretary of the Treasury John Snow will give a luncheon speech. Location: National Press Club, 529 14th St. NW, 13th Floor.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to it Public Notice [PDF] requesting interested parties to provide comments on filings by AT&T and TracFone Wireless regarding eligible telecommunications carrier (ETC) designations and the Lifeline and Link-Up universal service support mechanism. This is CC Docket No. 96-45 and WC Docket No. 03-109.

Tuesday, September 21

2:30 PM. The Senate Commerce Committee will hold a hearing on S 1963, the "Wireless 411 Privacy Act". Location: Room 253, Russell building.

1:00 - 4:00 PM. The Department of Commerce's (DOC) Technology Administration (TA) will host a roundtable titled "Technology Recycling: Achieving Consensus for Stakeholders: Roundtable on Electronics Recycling". See, notice. Location: DOC, Auditorium, 1401 Constitution Avenue, NW.

Wednesday, September 22

9:30 AM. The Senate Commerce Committee will hold a business meeting. Location: Room 253, Russell building.

9:30 AM. The Department of Homeland Security's (DHS) Homeland Security Advisory Council will hold a meeting, part of which will be closed to the public. The open portion will be held from 9:30 - 11:15 AM. See, notice in the Federal Register, September 8, 2004, Vol. 69, No. 173, at Pages 54299 - 54300. Location: U.S. Coast Guard Headquarters, 2100 Second Street, SW.

10:00 AM. The Senate Judiciary Committee will hold a hearing titled "A Review of Counter-Terrorism Legislation and Proposals, including the USA PATRIOT Act and the SAFE Act". The USA PATRIOT Act is the "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001". It was passed by the 107th Congress as HR 3162. It became Public Law 107-56 on October 26, 2001. The SAFE Act is S 1709, the "Security and Freedom Ensured Act of 2003". It was introduced by Sen. Larry Craig (R-ID) on October 2, 2003. See, story titled "Senators Craig and Durbin Introduce Bill to Modify PATRIOT Act" in TLJ Daily E-Mail Alert No. 753, October 6, 2003. Sen. Orrin Hatch (R-UT) will preside. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.

12:00 NOON - 1:30 PM. The DC Bar Association's Law Practice Management Section will host a presentation titled "50 Hot Technology Tips And Web Sites: What Lawyers Should Know". The speaker will be Reid Trautz (DC Bar Lawyer Practice Assistance Program). See, notice. Prices vary from $15 to $25. For more information, call 202 626-3463. Location: D.C. Bar Conference Center, B-1 Level, 1250 H Street, NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch. The topic will be "Universal Service Fund: A Primer". The speakers will be Paul Garnett (CTIA), Tina Pidgeon (GCI), Dan Mitchell (NTCA), Tom Buckley (FCC), and Eric Einhorn (SBC). For more information, contact Jason Friedrich at or Pam Slipakoff at Location: Drinker Biddle & Reath,1500 K Street NW, 11th floor.

1:30 - 3:30 PM. The World Radiocommunication Conference (WRC-07) Advisory Committee's Informal Working Group 2: Satellite Services and HAPS will meet. See, notice [PDF] Location: Leventhal Senter & Lerman, 2000 K Street, NW, 7th Floor.

3:30 PM. The Senate Judiciary Committee will hold a hearing on judicial nominations. Sen. Mike DeWine (R-OH) will preside. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.

Thursday, September 23

9:00 AM - 4:00 PM. The Executive Office of the President's (EOP) Office of Science and Technology Policy's (OSTP) National Science and Technology Council's (NSTC) Committee on Technology's Interagency Working Group on Information Technology Research & Development (ITR&D) will hold a meeting that is closed to the public. For more information, contact Virginia Moore at or 703 292-4873. Location: National Science Foundation (NSF), 4201 Wilson Blvd.

10:00 AM - 1:00 PM. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council (NRIC) will hold a meeting. The agenda includes E911 issues. FCC Chairman Michael Powell is scheduled to participate. See, notice and agenda [PDF] and notice in the Federal Register, September 1, 2004, Vol. 69, No. 169, at Page 53446. Location: FCC, Commission Meeting Room (TW-C305), 445 12th Street, SW.

TIME? The Trade Policy Staff Committee (TPSC) and the Office of the U.S. Trade Representative (USTR) will hold a public hearing to assist the USTR in preparing its annual report to the Congress on China's compliance with the commitments that it made in connection with its accession to the World Trade Organization (WTO). Persons wishing to testify orally at the hearing must provide written notification and a copy of their written testimony by 12:00 NOON on September 10, 2004. Written comments are due by 12:00 NOON on September 15, 2004. See, notice in the Federal Register, July 29, 2004, Vol. 69, No. 145, at Pages 45369 - 45370. Location: ?

12:30 PM. The Federal Communications Bar Association (FCBA) will host a luncheon. The speaker will be Michael Gallagher, Director of the National Telecommunications and Information Administration (NTIA). Prices to attend vary. See, registration form [PDF]. Registrations and cancellations are due by 5:00 PM on September 20. Location: J.W. Marriot Hotel, 1331 Pennsylvania Ave., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its further notice of proposed rulemaking (FNPRM) to determine whether mobile satellite service (MSS) operators using different technologies could share additional spectrum in the 1610-1626.5 MHz band (L-band). This FNPRM is FCC 04-134 in IB Docket No. 02-364 and ET Docket No. 00-258. See, notice in the Federal Register, August 9, 2004, Vol. 69, No. 152, at Pages 48192 - 48194.

Friday, September 24

10:00 AM -12:00 PM. The Federal Communications Commission's (FCC) Office of Engineering and Technology (OET) will host a tutorial titled "Optical Network Interoperability". Location: FCC, Commission Meeting Room (TWC-305), 445 12th Street, SW.

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