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August 4, 2005, 9:00 AM ET, Alert No. 1,188.
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FCC and DOJ Approve the Merger of Sprint and Nextel

8/3. The Federal Communications Commission (FCC) announced, but did not release, a Memorandum Opinion and Order (MOO) in its antitrust merger review of the Sprint Nextel merger. It approved the merger, subject to conditions. In addition, the Department of Justice's Antitrust Division announced in a release that it has conducted an antitrust merger review, and "has closed its investigation".

The FCC did issue a short release [PDF] that describes this MOO. This release states that "the FCC believes this transaction is unlikely to result in collusive, anti-competitive behavior or create unilateral market power on the part of the merged entity. In addition, the FCC finds that there are no local markets where the post-merger competitive environment would require a divestiture of spectrum, networks, or customers."

It adds that "While the number of large nationwide carriers will be reduced from five to four as a result of the transaction, the FCC determined that carrier conduct will remain sufficiently competitive to ensure that market performance will not be impaired".

The FCC's release also addresses roaming. It states that the MOO "imposed a condition specifying that Sprint Nextel may not prevent its subscribers from reaching another carrier and completing calls via manual roaming, unless specifically requested to do so by a subscriber."

It adds that "Given the broad scope of the roaming concerns raised in this proceeding, the FCC has decided that roaming issues would be more appropriately addressed in a separate proceeding. As announced in the FCC抯 Alltel-Western Wireless merger decision, the FCC plans to initiate a proceeding in the near future to examine whether the current roaming requirements applicable to mobile telephone carriers should be modified to address current market conditions and developments in technology."

The release also states that the MOO requires Spring Nextel "to meet certain milestones for offering service in 2.5 GHz band, unless circumstances beyond its control prevent the merged entity from reaching those milestones. In addition to other specific implementation requirements agreed to by Sprint Nextel, the first milestone requires Sprint Nextel to offer service using BRS/EBS spectrum to at least 15 million Americans within four years of the effective date of the order consenting to the merger, and the second milestone requires the company to serve an additional 15 million Americans within six years."

BRS is Broadband Radio Service. EBS is Education Broadband Services. This spectrum was previously known as MDS-ITFS.

Commissioner Michael Copps wrote in a separate statement [PDF] that "while this merger does not create market dominance in any particular market, it is part of a trend that merits close and continuing monitoring by the Commission. In less than a year mergers have reduced the number of national wireless competitors by one third. Only last year consumers could choose between six national carriers. There are now only four."

Commissioner Jonathan Adelstein wrote in his separate statement [PDF] that "I am somewhat troubled by the recent trend of consolidation among mobile wireless carriers". Nevertheless, he joined the other three in supporting this MOO.

See also, statement by FCC Chairman Kevin Martin, and statement [PDF] by Commissioner Kathleen Abernathy.

This FCC proceeding is nominally a license transfer proceeding. The FCC approved the transfer of licenses issued by the FCC that are associated with this merger. Its MOO is FCC 05-148 in WT Docket No. 05-63. The DOJ acted pursuant to statutory authority to conduct antitrust merger reviews.

The DOJ stated in its release that its review "focused on the proposed merger's potential effects on competition in the provision of mobile wireless voice and data services, including push-to-talk services. The Division also studied the potential impact on competition from the combination of Sprint's and Nextel's holdings of spectrum in the 2495-2690 MHz spectrum band."

The DOJ continued that "In analyzing mobile wireless voice and data services, the Division examined the extent to which Sprint and Nextel compete for the sale of such services in many areas throughout the United States. The Division focused its investigation on local and regional markets, because customers purchasing mobile wireless telecommunications services choose among providers that offer such services where they are located and travel on a regular basis".

The DOJ concluded that its evidence "indicates that the merger will not harm customers."

It elaborated that it "examined the shares of the two carriers, how closely positioned the two carriers' offerings are in depth and breadth of coverage, the service features they offer (including push-to-talk services), and local network quality. The Division also looked at evidence related to the choices customers make in the marketplace. Based on the extensive evidence collected, the Division concluded that it is unlikely that the merged company could unilaterally exercise market power to harm competition. Remaining carriers include large carriers such as Cingular and Verizon Wireless as well as smaller regional firms, and Sprint-Nextel will have robust competitors post-merger in every local area in which they compete. Moreover, although past customer choices indicate that Sprint and Nextel often closely compete with each other in some areas, rival carriers are perceived to offer alternatives that are sufficiently close to those of Sprint and Nextel to maintain competition."

Finally, it added that "Although Sprint-Nextel will be the largest holder of licenses in the 2495-2690 MHz spectrum band, the Division was unable to conclude that the merger's combination of this spectrum poses a competitive problem."

Sprint stated in a release that "This completes all required regulatory approvals for the merger, and the companies expect to close the merger shortly."

FTC Takes Action Against Deceptive Marketing of Adware

8/3. The Federal Trade Commission (FTC) issued an administrative Complaint [3 pages in PDF] against Advertising.com and John Ferber alleging violation of Section 5 of the FTC Act in connection with their deceptive marketing and installation of adware on consumers' computers. The parties simultaneously entered into an Agreement Containing Consent Order [7 pages in PDF].

The complaint alleges that "Respondents caused ads for SpyBlast to be served on consumers' computers" that "represented that because the consumer's computer was broadcasting an Internet IP address, it was at risk from hackers."

Then, "Consumers who clicked on this advertisement were shown an ActiveX ``security warning创 installation box with a hyperlink describing SpyBlast as ``Personal Computer Security and Protection Software from unauthorized users创 and telling them ``once you agree to the License Terms and Privacy Policy -- click YES to continue.创"

The complaint continues that "If a consumer clicked ``Yes,创 the software was installed, even if the consumer had not clicked on the hyperlink. Only if a consumer clicked on the hyperlink describing SpyBlast as ``Personal Computer Security and Protection Software from unauthorized users创 before clicking ``YES,创 did SpyBlast's End User Licensing Agreement (``EULA创) appear. ... The EULA contained a statement that consumers agreed to receive marketing messages, including pop-up ads, in exchange for getting SpyBlast. It also stated that respondent Advertising.com collected information about SpyBlast users, including ``URLs of visited pages and [the user's] IP address,创 and that this information allowed the company ``to send [a user] advertisements that might be of interest to [the user].创" (Parentheses and brackets in original.)

The complaint further states that "The adware collected information about SpyBlast users, including URLs of visited pages and the user抯 IP address, and this information allowed respondents to send users advertisements that respondents believed might be of interest to them. Consumers received a substantial number of pop-up advertisements as result of respondents installation of this adware onto their computers."

The complaint alleges that the respondents' failure "to disclose adequately that SpyBlast includes adware that causes consumers to receive pop-up advertisements" is a deceptive practice that violates the FTC Act.

The parties also settled. The Agreement Containing Consent Order requires Advertising.com, which is now owned by America Online, to disclose to consumers that its adware is bundled with its SpyBlast software. The agreement requires no fine or other monetary penalty or payment. The respondents admit no wrongdoing.

See also, FTC release.

Zoellick Discusses Trade and IPR in China

8/2. Robert Zoellick, the Deputy Secretary of State, held a news conference in Beijing, People's Republic of China, in which he discussed many issues. He touched on trade and intellectual property. See, transcript.

Robert ZoellickZoellick (at right) announced that "I know that the Chinese leaders have moved the country enormously in the direction of markets and improving the livelihood for China's people. At the same time, that makes China more influential in the world and you can see the effects of this integration, whether you look at commodities prices, whether you look at exchange rates, whether you look at issues of IPR and counterfeiting, whether you look at manufacturing markets. China is a significant influence on the world economy."

He added that "part of our challenge going forward is to see how to try to cooperate in terms of strengthening those systems, whether they be the international trade systems, whether they be -- sort of -- capital and currency flows."

Zoellick also reminded reporters that "I am no longer the U.S. Trade Representative".

Also, the Office of the U.S. Trade Representative (USTR), which is now headed by Robert Portman, published a notice in the Federal Register on August 3 in which it announced that it will hold a public hearing in Washington DC on September 14, 2005, regarding on the People's Republic of China's compliance with its World Trade Organization (WTO) commitments to assist it in preparing an annual report to the Congress. See, notice in the Federal Register, August 3, 2005, Vol. 70, No. 148, at Pages 44714 - 44715.

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FCC Postpones Meeting from Thursday to Friday

8/3. The Federal Communications Commission (FCC) postponed its meeting of August 4 until August 5. See, original agenda [PDF] and notice of postponement [PDF].

Various published reports, citing unnamed sources, stated on Wednesday that the reason for the postponement is that the FCC may add a fourth item to the agenda. This item would be an order pertaining to digital subscriber line (DSL) service.

FCC Chairman Kevin Martin discussed this issue in a speech on July 26. He argued that "we should place all broadband providers on equal footing so that they can fairly compete in the marketplace -- not in front of regulators". He added that Supreme Court's June 26 opinion [59 pages in PDF] in NCTA v. Brand X, which pertains to the FCC's regulatory treatment of cable modem service, "provides us the opportunity to make this happen."

Martin also stated that "I have already shared with my colleagues a proposal that would give telcos the same deregulatory treatment as cable. It is my strong hope that this order will be adopted as soon as possible so that consumers can reap the benefits of continued infrastructure investment and the increased deployment of broadband services."

The three items already on the meeting agenda are (1) a Notice of Inquiry (NOI) concerning the effects of anticompetitive conduct and circuit disruption by foreign carriers on U.S. international routes, (2) a NOI that requests comments to assist it in preparing its 12th annual report on the status of competition in the market for the delivery of video programming, and (3) an Order on Reconsideration regarding its service rules for advanced wireless services in the 1710-1755 MHz and 2110-2155 MHz bands (WT Docket No. 02-353).

This event is now scheduled for 9:30 AM on Thursday, August 5, 2005 in the FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW.

Washington Tech Calendar
New items are highlighted in red.
Thursday, August 4

POSTPONED TO FRIDAY, AUGUST 5. 9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. See, agenda [PDF]. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

The House will not meet on Monday, August 1 through Monday, September 5. See, House calendar and Republican Whip Notice.

The Senate will not meet on Monday, August 1 through Monday, September 5. See, Senate calendar.

The Supreme Court is between terms. The opening conference of its October 2005 Term will be held on September 26, 2005.

9:30 AM - 12:00 NOON. The Heritage Foundation will host an event titled "Challenges Facing the 21st Century U.S. Workforce". The first panel is titled "Technology and Evolving Labor Markets". The speakers will be Diana Furchtgott-Roth (Hudson Institute), Daniel Pink (Wired Magazine), and David Barnes (IBM). The second panel (at 10:30 AM) is titled "Labor Laws -- Ripe for Reform?". The speakers will be Janemarie Mulvey (Employment Policy Foundation), Paula Collins (Texas Instruments), William Conerly (American Institute of Full Employment). The keynote address (at 11:30 AM) will be delivered by Secretary of Labor Elaine Chao. See, notice. Location: Heritage, 214 Massachusetts Ave., NE.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Ultratech, Inc. v. Tamarack Scientific Co., No. 05-1107. The is an appeal from the U.S. District Court (NDCal) in a patent infringement case involving technology for making semiconductors. The District Court case is No. C 03-3235 CRB (JL). Location: U.S. Court of Appeals, LaFayette Square, 717 Madison Place, Courtroom 402.

10:00 AM - 12:00 NOON. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will meet to prepare for the Americas Regional Preparatory Meeting for the World Telecommunication Development Conference (WTDC-06) in Lima, Peru, from August 9-11, 2005. See, notice in the Federal Register, June 22, 2005, Vol. 70, No. 119, Page 36224. Location: DOS, Room 2533A.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding a petition for a declaratory ruling that certain provisions of the California Consumer Legal Remedies Act (CLRA), as applied to interstate telephone calls, are not preempted by the Telephone Consumer Protection Act (TCPA). See, notice in the Federal Register, June 15, 2005, Vol. 70, No. 114, at Pages 34725 - 34726. This proceeding is CG Docket No. 02-278.

Friday, August 5

RESCHEDULED FROM THURSDAY, AUGUST 4. 9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. See, agenda [PDF]. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

1:00 - 4:00 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled "The USA Patriot Act: A Primer". The speakers will be Sharie Brown (Foley & Lardner) and others. The price to attend ranges from $80-$125. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) regarding its document titled "Green Paper", which describes and evaluates four options to reform restriction practice. The USPTO plans to draft a "White Paper" that includes proposed legislation reforming restriction practice. See, notice in the Federal Register, June 6, 2005, Vol. 70, No. 107, at Pages 32761 - 32762.

Monday, August 8

Extended deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its notice of second further proposed rulemaking regarding horizontal and vertical cable ownership limits. The FCC adopted this Second Further NPRM on May 13, 2005, and released it on May 17, 2005. This item is FCC 05-96 in MM Docket No. 92-264. See, original notice in the Federal Register, June 8, 2005, Vol. 70, No. 109, at Pages 33679 - 33687. See also, notice of extension of deadlines, in the Federal Register, July 6, 2005, Vol. 70, No. 128, at Pages 38848 - 38849.

EXTENDED TO SEPTEMBER 7. Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to it notice of proposed rulemaking (NPRM) regarding low power FM rules. The FCC adopted its order and NPRM on March 16, 2005, and released it on March 17, 2005. It is FCC 05-75 in MM Docket No. 99-25. See, notice in the Federal Register, July 7, 2005, Vol. 70, No. 129, at Pages 39217 - 39227. See also, FCC notice [PDF] extending the deadlines.

Tuesday, August 9

2:00 - 4:00 PM. The Federal Communications Commission's (FCC) Informal Working Group 3: IMT-2000 and 2.5 GHz Sharing Issues will meet. See, FCC notice [PDF]. Location: FCC, 445 12th Street, SW, 6th Floor South Conference Room (6-B516).

6:00 - 9:15 PM. The DC Bar Association will host a the first part of a continuing legal education (CLE) seminar titled "Software Patent Primer: Acquisition, Exploitation, Enforcement and Defense". The speakers will be Stephen Parker (Novak Druce), Brian Rosenbloom (Rothwell Figg Ernst & Manbeck), David Temeles (Temeles & Temeles), and Martin Zoltick (Rothwell Figg). The price to attend ranges from $95-$170. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

Wednesday, August 10

3:05 PM. The Department of Homeland Security's (DHS) Homeland Security Advisory Council (HSAC) will meet by teleconference. The agenda includes receiving final report from the HSAC Private Sector Information Sharing Task Force. See, notice in the Federal Register, July 25, 2005, Vol. 70, No. 141, at Page 42583.

6:00 - 9:15 PM. The DC Bar Association will host a the second part of a continuing legal education (CLE) seminar titled "Software Patent Primer: Acquisition, Exploitation, Enforcement and Defense". The speakers will be Stephen Parker (Novak Druce), Brian Rosenbloom (Rothwell Figg Ernst & Manbeck), David Temeles (Temeles & Temeles), and Martin Zoltick (Rothwell Figg). The price to attend ranges from $95-$170. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

Deadline for every interconnected voice over internet protocol (VOIP) service provider to submit a report to the Federal Communications Commission (FCC) regarding the status of its obtaining from every one of its subscribers an acknowledgment of receipt of the FCC mandated statement regarding E911, and regarding the status of its distribution of the FCC mandated VOIP warning stickers. See, the order contained in the FCC's document titled "First Report and Order and Notice of Proposed Rulemaking" [90 pages in PDF], numbered FCC 05-116, adopted on May 19, 2005, and released on June 3, 2005. See also, the order contained in the FCC's document titled "Public Notice' [PDF], numbered DA 05-2085, and released on July 26, 2005. These orders were issued in FCC proceedings regarding extending elements of the regulatory regime for communications to internet protocol based services: "In the Matter of IP-Enabled Services", numbered WC Docket No. 04-36, and "E911 Requirements for IP-Enabled Service Providers", numbered WC Docket No. 05-196.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rule Making (FNPRM) regarding advancing the date on which all new television receiving equipment must include the capability to receive over the air DTV broadcast signals from July 1, 2007, to a date no later than December 31, 2006. The FCC adopted and released this item on June 9, 2005. This item is FCC 05-121 in ET Docket No. 05-24. See, notice in the Federal Register, July 6, 2005, Vol. 70, No. 128, at Pages 38845 - 38848. See also, story titled "FCC Adopts Order and NPRM Regarding Its Digital Tuner Rules" in TLJ Daily E-Mail Alert No. 1,153, June 14, 2005.

Thursday, August 11

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in its airborne cellular proceeding. The FCC adopted its notice of proposed rulemaking (NPRM) back on December 15, 2004. It is FCC 04-288 in WT Docket No. 04-435. See, story titled "FCC Announces NPRM on Cellphones in Airplanes" in TLJ Daily E-Mail Alert No. 1,039, December 16, 2004. The FCC extended the reply comment deadline by order numbered DA 05-1712, and dated June 23, 2005. See also, notice in the Federal Register, Volume 70, No. 133, at Pages 40276 - 40277.