5/10. Hewitt Pate, the Assistant Attorney General (AAG) in charge of the Department of Justice's Antitrust Division, resigned, effective June 30, 2005. See, statement by Attorney General Alberto Gonzales.

Pate (at right) joined the Antitrust Division in 2001 as a Deputy AAG under former AAG Charles James. When James left after a short tenure, President Bush nominated Pate to be AAG. The Senate confirmed him in June of 2003. Pate previously worked in the antitrust section of the law firm of Hunton & Williams.

Pate has pursued international cooperation and convergence in competition law and enforcement through the International Competition Network. However, he has also differed, especially with the European Union, on key issues, such as Microsoft.

Pate also differed with the EU on unilateral conduct and mandatory intellectual property licensing generally.

See, story titled "Pate Addresses US EU Differences on Antitrust, Microsoft, and IPR" in TLJ Daily E-Mail Alert No. 913, June 8, 2004; story titled "Pate Criticizes EC Decision Regarding Microsoft" in TLJ Daily E-Mail Alert No. 869, April 5, 2004; and story titled "US Antitrust Chief Says EU's Microsoft Decision Could Harm Innovation and Consumers" in TLJ Daily E-Mail Alert No. 863, March 25, 2004.

The Antitrust Division, under Pate's leadership, has generally allowed companies to complete procompetitive mergers. However, Pate's tenure is also marked by the Antitrust Division's failed attempt to block Oracle's acquisition of PeopleSoft.

On February 26, 2004, the U.S. and several states filed a complaint against Oracle alleging that its proposed acquisition of PeopleSoft would lessen competition substantially in interstate trade and commerce in violation of Section 7 of the Clayton Act, which is codified at 15 U.S.C. § 18. The plaintiffs sought an injunction of the proposed acquisition. See, story titled "Antitrust Division Sues Oracle to Enjoin Its Proposed Acquisition of PeopleSoft" in TLJ Daily E-Mail Alert No. 846, March 1, 2004.

On September 9, 2004, following trial, the District Court issued its Findings of Facts, Conclusions of Law and Order Thereon [164 pages in PDF]. It held that the government failed to meet its burden of showing by a preponderance of the evidence that the proposed merger is likely substantially to lessen competition in a relevant product and geographic market. See, story titled "DOJ Loses Oracle Case" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

Pate pursued cartel offenses. The DOJ stated in a release that "Since he became Assistant Attorney General, more than $717 million in criminal fines were obtained against 31 corporations and 37 individuals as a result of criminal antitrust prosecutions."

President Bush has not yet nominated a successor, or announced his intent to nominate.

5/10. The Senate approved the conference report on HR 1268, the "Emergency Supplemental Appropriations Act for Defense, The Global War on Terror, and Tsunami Relief, 2005" on a roll call vote of 100-0. See, Roll Call No. 117. The House approved the conference report on May 5, 2005. President Bush supports the bill, and will likely soon sign it into law.

This conference report includes HR 418, the "REAL ID Act of 2005". Title II of the REAL ID Act is titled "Improved Security for Driver's Licenses and Personal Identification Cards". It sets minimum standards that states must follow for issuing a driver's license or identification card to an individual. The bill also sets minimum standards for what information must be included on drivers' licenses and identification cards.

The REAL ID Act also provides that "To be eligible to receive any grant or other type of financial assistance made available under this title, a State shall participate in the interstate compact regarding sharing of driver license data, known as the `Driver License Agreement´, in order to provide electronic access by a State to information contained in the motor vehicle databases of all other States."

See, story titled "House Approves Bill Providing for Federally Regulated Identification Cards and Databases" in TLJ Daily E-Mail Alert No. 1,130, May 6, 2005.

5/4. Rep. Rick Boucher (D-VA) wrote a letter [PDF] to Federal Communications Commission (FCC) Chairman Kevin Martin, and to the other Commissioners, regarding the Rural Health Care Support Mechanism of the Universal Service Fund.

He stressed the importance of telemedicine and telehealth services in rural districts, such as his own, in far western Virginia. He stated that technological advances are "tremendously beneficial for patients in rural settings, who can avoid the time and expense associated with travel to the distant medical center. The patient can simply go to a clinic in his hometown that has telemedicine capability, and while he stays in the local examining room, the specialist located hundreds of miles away can conduct the examination and render a diagnosis."

Rep. Boucher continued that "In the absence of our universal service policy, the high cost of delivering and receiving telemedicine services would make the cost prohibitive for many of the health care providers ..."

He urged the FCC "to retain our core basic universal service policy: affordable access for everyone" when reviewing universal service support for health care communications. He further proposes several specific changes to the FCC's universal service rules.

Rep. Boucher is a senior member of the House Commerce Committee, and its Subcommittee on Telecommunications and the Internet, which oversee the FCC.

The FCC amended its rules regarding health clinics in November of 2003. See, story titled "FCC Expands Universal Service Support for Rural Clinics and Telemedicine" in TLJ Daily E-Mail Alert No. 779, November 14, 2003. It further amended its rules by adopting, on December 15, 2004, its "Second Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking". See, story titled "FCC Expands Rural Telemedicine Subsidy Program" in TLJ Daily E-Mail Alert No. 1,040, December 17, 2004. Rep. Boucher submitted the present letter in response to the rule making portion of this item.

This is WC Docket 02-60. The FCC has received over 200 comments. To access all comments, go to the FCC web site's comments search page, and enter the docket number (02-60) in the first dialog box.

5/10. The U.S. Court of Appeals (11thCir) issued its opinion [22 pages in PDF] in AIBG v. US, holding that certain telephone services purchased by the American Bankers Insurance Group (AIBG) from AT&T are not subject to the excise tax on communications.

26 U.S.C. § 4251 imposes a 3 percent excise tax on certain communications services. This tax is sometimes referred to by its detractors as the "Spanish American War tax", since it was originally imposed to help fund that war. 26 U.S.C. § 4252 contains the applicable definitions. This case involves interpretation of these definitions.

The statute relied upon by AT&T and the IRS in taxing AIBG references "a toll charge which varies in amount with the distance and elapsed transmission time". But, the charges for the services purchased by AIBG were uniform; they did not vary by distance. They did vary by elapsed time.

The IRS took the position that the word "and" really means "or", and hence, a charge that does not vary with distance, but that does vary with elapsed time, is covered and taxable.

The Court of Appeals recited the pertinent facts. "Between October 1, 1998, and March 31, 2002, taxpayer, ABIG, purchased interstate, international, and (in five states) intrastate long distance service from AT&T. ABIG paid a uniform toll rate for all interstate calls made within the United States, uniform toll rates for all intrastate long distance calls made within the five states in which it purchased service, and toll rates for international calls (other than calls to and from Mexico) that varied only according to which country the calls were being placed."

AT&T collected from AIBG federal excise taxes on these services pursuant to 26 U.S.C. § 4252(b)(1) and then gave the money to the Internal Revenue Service (IRS).

AIBG filed refund claims with the IRS. The IRS ignored these refund claims.

AIBG then filed a complaint in U.S. District Court (SDFl) seeking a refund of its money. The District Court granted summary judgment to the IRS. AIBG appealed. The Court of Appeals reversed, and directed the District Court to enter judgment for AIBG.

§ 4251 imposes a tax on certain "communications services". § 4251(b) provides that the term ''communications services'' means "(A) local telephone service; (B) toll telephone service; and (C) teletypewriter exchange service". This case concerns "toll telephone service".

26 U.S.C. § 4252(b) provides that "toll telephone service" means

"(1) a telephonic quality communication for which
   (A) there is a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication and
   (B) the charge is paid within the United States, and
(2) a service which entitles the subscriber, upon payment of a periodic charge (determined as a flat amount or upon the basis of total elapsed transmission time), to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radio telephone stations in a specified area which is outside the local telephone system area in which the station provided with this service is located."

The District Court reasoned that the tax on toll telephone service could be imposed on services where charges vary by distance or by elapsed transmission time. That is, the District Court substituted the word "or" for the statute's word "and".

The Court of Appeals reasoned that the word "and" means "and", not "or". It held that the meaning of the word "and" is not ambiguous. Therefore, it held that the District Court erred.

On appeal, the IRS also tried to fit its collection of the tax under § 4252(b)(2) or § 4252(a). The Court of Appeals rejected these arguments.

This case is American Bankers Insurance Group v. U.S.A., U.S. Court of Appeals for the 11th Circuit, No. 04-10720, an appeal from the U.S. District Court for the Southern District of Florida, D.C. No. 03-21822 CV-PCH

The IRS has also demonstrated an interest in expanding the excise tax, by administrative fiat, to certain information services. See, story titled "IRS Publishes Advance NPRM Regarding Expanding the Excise Tax on Telephones to Include New Technologies" in in TLJ Daily E-Mail Alert No. 931, July 6, 2004.

It would appear that a court applying a strict statutory construction of 26 U.S.C. § 4251, et seq., as in the present case, would overturn any such IRS rules or rulings.

Meanwhile, on April 27, 2005, Rep. Gary Miller (R-CA), and 39 other Representatives, introduced HR 1898, the "Telephone Excise Tax Repeal Act of 2005". See, story titled "Rep. Miller Introduces Bill to Repeal Excise Tax on Phones" in TLJ Daily E-Mail Alert No. 1,128, May 4, 2005.

5/10. President Bush nominated John Sullivan to be General Counsel of the Department of Commerce (DOC). If confirmed by the Senate, he will replace Theodore Kassinger, who has left the DOC. See, White House release. President Bush announced his intent to nominate Sullivan on April 26, 2005. See, White House release. Sullivan is Deputy General Counsel of the Department of Defense. Before that, he was an attorney in the Washington DC office of the law firm of Mayer Brown Rowe & Maw.

5/9. William Mercer was named Principal Associate Deputy Attorney General at the Department of Justice (DOJ), effective in June. He is the U.S. Attorney for the District of Montana. See, DOJ release.

5/9. Penrose Albright, the Assistant Secretary for Programs, Plans & Budgets in the Department of Homeland Security's (DHS) Science & Technology directorate, resigned. See, statement by Secretary of Homeland Security Michael Chertoff.

5/10. Adrienne Kroepsch joined Warren Communications News, publisher of Communications Daily and other publications, as an Assistant Editor. She covers the satellite beat. She previously worked for the American Association for the Advancement of Science.

5/10. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) released a report [38 pages in PDF] titled "Radio Frequency Identification: Opportunities and Challenges in Implementation". This paper focuses on the technology of, and likely applications for, RFID technology. The report also briefly touches on intellectual property rights issues (at pages 30-31) and privacy and security issues (at pages 33-37).

5/9. The Copyright Office published a notice in the Federal Register that recites, describes, and sets the effective date (June 8, 2005) for, its rule changes regarding reports of use of sound recordings under the statutory license for preexisting subscription services. See, Federal Register, May 9, 2005, Vol. 70, No. 88, at Pages 24309 - 24310.

The House will meet at 10:00 AM for legislative business. There are no technology related items on the agenda. See, Republican Whip Notice.

The Senate will meet at 9:30 AM for morning business. It will then resume consideration of HR 3, the Transportation Equity Act.

9:30 AM. The Senate Judiciary Committee (SJC) has scheduled an executive business meeting. The agenda lists one item, the asbestos bill. The SJC frequently cancels meetings without notice. The SJC rarely follows its agenda. See, notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing on spyware. Press contact: Melanie Alvord (Stevens) 202 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov. See, notice. The hearing will be webcast by the SCC. Location: Room 253, Russell Building.

11:00 AM. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled "Securing Consumers' Data: Options Following Security Breaches". The hearing will be web cast by the Committee. Location: Room 2123, Rayburn Building.

11:00 AM. The Cato Institute will host a panel discussion titled "Does the World Trade Organization Serve America's Interests in the Global Economy?". The speakers will be Douglas Irwin (Dartmouth College), Grant Aldonas (recent Undersecretary of Commerce for International Trade), and Rep. Ron Paul (R-TX). See, notice. The event will be webcast by Cato. Lunch will follow the program. Location: Cato, 1000 Massachusetts Ave., NW.

TIME CHANGE. 2:00 - 4:00 PM. The House Science Committee's Subcommittee the Environment, Technology, and Standards will hold a hearing titled "Europe, China, and the Use of Technical Standards as Trade Barriers: How should the U.S. Respond?" The witnesses will be Hratch Semerjian (acting Director of the National Institute of Standards and Technology), Don Deutsch (Oracle), David Karmol (American National Standards Institute), Robert Noth (Deere & Company), and Joe Bhatia (Underwriters Laboratory). The hearing will be webcast. Location: Room 2318, Rayburn Building.

2:30 PM. The Senate Foreign Relations Committee's  European Affairs Subcommittee will hold a hearing on the U.S. European Union regulatory cooperation on emerging technologies. Location: Room 419, Dirksen Building.

4:00 PM. The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet and Intellectual Property will hold a hearing titled "Oversight of Public Performance Rights Organizations". The hearing will be webcast by the HJC. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

RESCHEDULED FOR JUNE 22. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) seminar on voice over internet protocol (VOIP).

Deadline to submit nominations for the Federal Communications Bar Association's (FCBA) Young Lawyer's Committee's (YLC) elections, to be held on May 18. All nominations must be e-mailed to Jason Friedrich or Pam Slipakoff by May 11. For more information, contact Jason Friedrich at jason dot friedrich at dbr dot com or 202 354-1340 or Pam Slipakoff at pamslip at yahoo dot com or 202 418-7705.

The House will meet at 10:00 AM for legislative business. There are no technology related items on the agenda. See, Republican Whip Notice.

POSTPONED. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold its third hearing on the Committee Print of HR __ [52 pages in PDF], the "Patent Act of 2005". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

8:00 AM. The Federal Communications Bar Association (FCBA) will host a breakfast. The speaker will be Gary Shapiro, P/CEO of the Consumer Electronics Association (CEA). The price to attend varies from $30 to $55. See, registration form [MS Word]. Location: J.W. Marriott Hotel, 1331 Pennsylvania Ave., NW.

RESCHEDULED FOR MAY 19. 9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

9:30 AM. The U.S. Court of Appeals (DC) will hear oral argument in Christopher Shays v. FEC, No. 04-5352. Judges Edwards, Henderson and Tatel will preside. Location: Prettyman Courthouse, 333 Constitution Ave., NW.

10:00 AM - 12:00 NOON. The House Science Committee will hold a hearing titled "The Future of Computer Science Research in the U.S." The witnesses will be John Marburger (Director of the President's Office of Science and Technology Policy), Anthony Tether (Director of the Defense Advanced Research Projects Agency), William Wulf (President of the National Academy of Engineering), and Tom Leighton (Chief Scientist of Akamai Technologies). Location: Room 2318, Rayburn Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing on S 967 and issues related to the broadcast of prepacked news stories produced by government agencies. Press contact: Melanie Alvord (Stevens) 202 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov. See, notice. The hearing will be webcast by the SCC. Location: Room 253, Russell Building.

10:00 - 11:30 AM. The American Enterprise Institute (AEI) and the National Defense University (NDU) will host a panel discussion titled "Will Technology Be a Source of Chinese Influence in Asia?" The speakers will be Ernest Preeg (Manufacturers Alliance), Tai Ming Cheung (University of California San Diego), Will Martin (World Bank), Claude Barfield (AEI), and Phillip Saunders (NDU). See, notice. Location: AEI, 12th floor, 1150 17th St., NW.

10:15 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Antitrust Policy and Vertical Restraints". The speakers will include David Evans (LECG), Luke Froeb (FTC), and Michael Waldman (Cornell University). See, notice. Location: AEI, 12th floor, 1150 17th St., NW.

12:00 NOON. The National Telecommunications and Information Administration (NTIA) and the Federal Communications Commission (FCC) will hold a meeting. The agenda includes the role of NTIA in spectrum management, the IRAC process, and the FCC-NTIA interaction with respect to license applications, rulemaking proceedings, and spectrum management policy issues at the FCC. The speakers will be Fred Wentland (NTIA), Karl Nebbia (NTIA), Julius Knapp (FCC), and other FCC officials. The Federal Communications Bar Association (FCBA) states that this is an FCBA brown bag lunch, and that attendees should RSVP to Wendy Parish at wendy@fcba.org. Location: FCC, 7th Floor South Conference Room.

12:15 - 2:00 PM. The Forum on Technology and Innovation will host a luncheon titled "Future of U.S. Manufacturing". The speakers will be Mark Bamforth (Genzyme), Gary Heiman (Standard Textile), and Mark Mills (Digital Power Group). See, notice. Location: Room 902, Hart Building, Capitol Hill.

4:00 PM. The Senate Judiciary Committee (SJC) has scheduled a hearing on executive branch nominations. The SJC frequently cancels meetings without notice. See, notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

6:00 - 8:00 PM. Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host an event titled "Happy Hour". For more information, contact Pam Slipakoff at pamslip at yahoo dot com. Location: Modern Brasserie, 555 8th Street, NW.

The House will meet at 10:00 AM for legislative business. There are no technology related items on the agenda. See, Republican Whip Notice.

Day one of a two day event hosted by the American Cable Association titled "Annual Washington Summit".

9:00 AM - 5:30 PM. The Federal Communications Commission's (FCC) North American Numbering Council (NANC) will meet. See, notice and agenda [2 pages in PDF]. Location: FCC, 445 12th Street, SW, Room TW-C305.

10:00 AM. The House Ways and Means Committee's Subcommittee on Trade will hold a hearing titled on the future of the World Trade Organization (WTO). See, notice. Location: Room 1100, Longworth Building.

11:30 AM - 1:00 PM. The Business Software Alliance (BSA) and Center for Strategic and International Studies (CSIS) will host a panel discussion titled "Battling International Organized Cyber Crime". The keynote speaker will be Ralph Basham (Director of the U.S. Secret Service). The panelists will be Ed Appel (Joint Council of Information Age Crime), Bill Conner (Ch/CEO of Entrust), James Lewis (CSIS), Brian Nagel (U.S. Secret Service), Kim Peretti (Trial Attorney in the DOJ's Computer Crime and Intellectual Property Section), Phil Reitinger (Microsoft), and Jody Westby (PricewaterhouseCoopers). Lunch will be served. RSVP to rsvp at bsa dot org by May 11. Press contact: Wendy Rosen at 202 530-5127 or wendyr at bsa dot org. Location: 1800 K Street, NW, B-1 conference center.

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Committee will host a brown bag lunch. Location: Dow Lohnes & Albertson, 1200 New Hampshire Ave., NW, Suite 800.

Day two of a two day event hosted by the American Cable Association titled "Annual Washington Summit".

Day one of a three day event hosted by the Armed Forces Communications and Electronics Association (AFCEA) titled "TechNet International 2005: Network Centric Operation: Balancing Speed and Agility with Security". See, event web site and schedule. Location: Washington Convention Center.

12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyer's Committee (YLC) will host a brown bag lunch to hold elections. There will be no proxy voting. Voting is limited to current YLC members. All nominations must be e-mailed to Jason Friedrich or Pam Slipakoff by May 11. For more information, contact Jason Friedrich at jason dot friedrich at dbr dot com or 202 354-1340 or Pam Slipakoff at pamslip at yahoo at com or 202 418-7705. Location: Willkie Farr & Gallagher, 1875 K Street, NW, 2d Floor.

Day two of a three day event hosted by the Armed Forces Communications and Electronics Association (AFCEA) titled "TechNet International 2005: Network Centric Operation: Balancing Speed and Agility with Security". See, event web site and schedule. Location: Washington Convention Center.

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