|FTC Report on Broadband Policy Cautions
Against Network Neutrality Mandate
6/27. The Federal Trade Commission (FTC) released a
report [170 pages in
PDF] titled "Broadband Connectivity Competition Policy". See also, FTC
It finds that "There is evidence that the
broadband Internet access industry is moving in the direction of more, not less,
competition, including fast growth, declining prices for higher-quality service,
and the current market-leading technology (i.e., cable modem) losing
share to the more recently deregulated major alternative (i.e., DSL). We
nonetheless recognize that not every local broadband market in the United States
may enjoy vigorous competition."
It recommends that "policy makers proceed with caution in
evaluating proposals to enact regulation in the area of broadband Internet
access. The primary reason for caution is simply that we do not know what the
net effects of potential conduct by broadband providers will be on all
consumers, including, among other things, the prices that consumers may pay for
Internet access, the quality of Internet access and other services that will be
offered, and the choices of content and applications that may be available to
consumers in the marketplace."
It continues that "With respect to data discrimination,
broadband providers have conflicting incentives relating to blockage of and
discrimination against data from non-affiliated providers of content and
applications. In the abstract, it is impossible to know which of
these incentives would prove stronger for each broadband provider. Further, even
assuming such discrimination were to take place, it is unknown whether the net
effect on consumer welfare would be adverse. Likewise, it is not possible to
know in the abstract whether allowing content and applications providers to pay
broadband providers for prioritized data transmission will be beneficial or
harmful to consumers."
The report adds that "Policy makers also should carefully consider the potentially
adverse and unintended effects of regulation in the area of broadband Internet access before
enacting any such regulation. Industry-wide regulatory schemes -- particularly those
imposing general, one-size-fits-all restraints on business conduct – may well have adverse
effects on consumer welfare, despite the good intentions of their proponents."
FTC Commissioner Jonathan Liebowitz wrote in a
statement [3 pages in PDF] that "There is a real reason to fear that,
without additional protections, some broadband companies may have strong
financial incentives to restrict access to content and applications."
He wrote, citing the FCC's Madison River proceeding, that "a broadband
provider with monopoly power in a local market might use that power to block or
degrade some applications or content that compete with applications or content
the broadband company itself provides."
Groups that represent providers of broadband access services praised the FTC report.
Steve Largent, head of the CTIA -- The Wireless
Association, stated in a
release that "The
Internet regulation scheme has forever been built on a hypothetical, ``what-if´´ scenario
and today this flimsy theory has met yet another round of cold, hard, real-world facts that
render it unworthy of our nation’s attention and resources."
Walter McCormick, head of the USTelecom,
stated in a
that "The FTC found what consumers already know – that they have a variety of
competitive choices from cable, DSL, wireless, satellite and other alternative providers for
high-speed Internet services, and there is no problem that requires regulation of the
Internet. We applaud the FTC’s thorough analysis and appreciate its commitment to ensuring
that consumers continue to have access to a robust marketplace.”
Kyle McSlarrow, head of the National Cable &
Telecommunications Association (NCTA), praised the report in a
Advocates of network neutrality mandates criticized the FTC report.
Gigi Sohn, head of the Public
Knowledge, stated in a release that "the report falls far short in its
analysis of a competitive market and the related issue of Net Neutrality.
Despite the fervent wishes of the FTC staff, there is not a competitive market
for high-speed Internet services. New technologies, particularly wireless
technologies, are not soon going to have the same robust qualities or market
penetration as the duopoly cable and telephone-company services."
Derek Turner of the Free Press stated in a release that "The same phone and cable
companies whose anti-competitive policies created this sorry situation are now proposing
to become gatekeepers over Internet content and services. But the FTC seems content to
stand on the sidelines."
Turner added that "The FTC has an explicit duty to protect
consumers. Yet this study includes no empirical research on competition in the
local broadband market. They simply take the incumbents at their word that the
U.S. broadband marketplace is competitive -- even though most U.S. consumers
have at best two choices for broadband at home. The phone and cable companies
have a tremendous incentive to favor their own applications and content at the
expense of their competitors. In fact, that's exactly what their top executives
have announced they plan to do."
|AG Gonzales Discusses International IP
6/27. Attorney General Alberto
Gonzales gave a
speech in Seattle,
Washington, regarding government enforcement of intellectual property laws.
He said that the Department of Justice
(DOJ) is "committed more than ever before to aggressively enforcing the law in
this area and to advocating for stronger legal protections from Congress for
American entrepreneurs and their products".
The DOJ submitted
draft legislation [29 pages in PDF] titled "Intellectual Property Protection
Act of 2007" to the Congress on May 14, 2007. See also, DOJ
Gonzales' May 14, 2007, speech to the U.S. Chamber of Commerce regarding
intellectual property protection and this draft bill.
Gonzales (at right)
continued that "We must strengthen our global law enforcement efforts, ensure strong
intellectual property laws, increase resources devoted to IP law enforcement, and work to
increase the number of international operations we conduct jointly with other
He noted that "in 2006, we convicted 57 percent more defendants for criminal
copyright and trademark offenses than in 2005. Of those convictions, the number of defendants
receiving prison terms of more than two years increased even more sharply -- up 130
He also said that "when I travel abroad and meet with my counterparts in other
countries, I make sure to include IP crimes in the discussion. Just last month, at a meeting
of G8 Justice and Home Affairs ministers in Germany, my counterparts and I adopted a set
of principles to enhance international cooperation in fighting IP crime, and we'll continue
this work over the coming year."
Gonzales also touched on investigation and prosecution of cyber crimes,
including the use of botnets.
|ITIF Releases Report on IT Related
Unfair Trade Practices
6/21. The Information Technology and
Innovation Foundation (ITIF) released a
report [41 pages in
PDF] titled "The Rise of the New Mercantilists: Unfair Trade Practices in the
Innovation Economy". The authors are the ITIF's Robert Atkinson and Julie
Hedlund. See also, summary.
The report states that "many nations" are "erecting a whole host of unfair
and protectionist policies focused on systematically disadvantaging foreign, including U.S.,
companies in global competition". These protectionist policies include "raising
the relative price of foreign IT products and services by applying tariffs, taxes, subsidies,
and excessive antitrust enforcement; acquiring foreign IT products and services without
paying for them through digital theft and forcing U.S. companies to give up their
intellectual property; and/or blocking or limiting access of foreign companies to markets
through standards, government procurement, data privacy and other policies."
The report offers several recommendations. First, it states that most of these nations
are members of the World Trade Organization (WTO). Hence,
it argues that the "administration should vigorously and unequivocally enforce other
nations' IT trade commitments under the WTO."
It also recommends that the Congress increase the appropriation for the
Office of the U.S. Trade Representative (OUSTR), and that
the OUSTR "should include the elimination of IT-based trade distortions among several
important priorities when negotiating new bilateral trade agreements".
It also suggests that "Congress should encourage companies to build WTO cases
by allowing them to take a 25 percent tax credit for expenditures related to
bringing WTO cases".
The report also identifies some of the major IT protectionists, and their
practices. It lists rampant intellectual property theft in the People's Republic
of China (PRC) and Russia. It also states that the PRC "Developed a wireless
encryption standard (the Wireless Local Area Network Authentication and Privacy
Infrastructure (WAPI) standard) without international collaboration in order to
limit foreign IT companies’ access to its market and give its domestic companies
a competitive advantage." (Parentheses in original.)
It also states that Korea unfairly subsidizes Hynix Semiconductor Inc., and
that it "forced Microsoft to develop two different versions of its Windows
software in order to give domestic producers of media players a competitive
It also states that France uses "copyright law to force U.S. companies to
make their copyright software protection (digital rights management)
interoperable". (Parentheses in original.)
|People and Appointments
6/28. President Bush nominated Admiral Mike Mullen to be the next
Chairman of the Joint Chiefs of Staff, and General James Cartwright to be
the next Vice Chairman of the Joint Chiefs of Staff. See,
transcript of White House ceremony.
6/28. President Bush nominated Reed O'Connor to be a Judge of the
U.S. District Court for the Northern District of
Texas. O'Connor is a federal prosecutor. See, White House
and release of
Sen. Jon Cornyn (R-TX) and
Sen. Kay Hutchison (R-TX).
6/21. President Bush announced his intent to appoint Susan Allen, Ching-Wu
Chu, Darleane Hoffman, Linda Katehi, and Rodney Brown to be
members of the President's Committee on the National Medal of Science. All appointments are
for a three year term expiring on December 31, 2009, except Brown, who would be appointed
for the remainder of a three year term expiring on December 31, 2007, and for a three year
term expiring on December 31, 2010. See, White House
6/28. The U.S. Patent and Trademark Office
(USPTO) published a
notice in the Federal Register that announces that "upon the completion
of development and testing of its new redundant design coding system,
but no earlier than sixty (60) days from the date of this Notice, the USPTO
will: (1) Begin coding with the new coding system all new registrations of marks
that include design elements; (2) stop adding design coded registrations to the
paper search collection; and (3) begin microfilming the paper search collection
of registered marks that include design elements. When microfilming is complete,
the USPTO will remove the paper search collection of registered marks that
include design elements. The microform collection will be available to the
public in the Public Search Facility at 600 Dulany Street, Alexandria, Virginia.
This will ensure that all information currently available in the paper search
collection remains available to the public." See, Federal Register,
June 28, 2007, Vol. 72, No. 124, at Pages 35429-35432.
6/27. The Department of Justice (DOJ) announced in a
Citizens Communications "has agreed to remove
restrictive terms from settlement agreements that Commonwealth Telephone Enterprises had
previously entered into with two cable companies in Pennsylvania, Blue Ridge and Service
Electric, in order to alleviate antitrust concerns raised" by the DOJ.
6/26. The U.S. District Court (DC) issued a
Opinion [PDF] in U.S. v. SBC and AT&T and U.S. v. Verizon and
MCI, denying COMPTEL's and Michael Lovern's motions to intervene for the purpose
of appealing the District Court's final judgment in the Tunney Act proceedings related the the merger
of SBC and AT&T and the merger of Verizon and MCI. These cases are U.S. v. SBC
Communications, Inc. and AT&T Corp., D.C. No. 05-2102, and U.S. v. Verizon
Communications, Inc. and MCI, Inc., D.C. No. 05-2103, U.S. District Court for the
District of Columbia, Judge Emmet Sullivan presiding.
6/25. The U.S. Court of Appeals (FedCir)
issued its opinion
[10 pages in PDF] in Microstrategy v. Business Objects, affirming
the District Court's summary judgment of noninfringement and invalidity. This
case pertains to business intelligence software that retrieves, organizes, and
analyzes data stored in large databases to assist users making business
decisions. This case is Microstrategy, Inc. v. Business Objects Americas,
U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2006-1320, an appeal
from the U.S. District Court for the District of Delaware, Judge Kent Jordan presiding.
6/23. Federal Reserve Board (FRB) Governor
Frederic Mishkin gave a
speech at Duke University in Durham, North Carolina, on June 23, 2007, titled "Globalization and
Financial Development", in which he advocated free trade in goods and services,
including the opening of financial markets. He
stated that "Wealth is not something that can be attained by
remaining closed off to the rest of the world. Poorer countries would do better
by embracing globalization -- that is, opening their financial markets and their
markets for goods and services to other nations so that funds, goods, and,
often, the ideas that accompany them can flow in."
|Washington Tech Calendar
New items are highlighted in red.
|Thursday, June 28
The House will meet at 10:00 AM for
legislative business. See, Rep. Hoyer's
weekly calendar [PDF].
The Senate will meet at 9:30 AM. It will resume consideration of
S 1639 [LOC |
bill related to immigration and other matters.
9:30 AM - 12:00 NOON. The Center
for Public Integrity (CPI) and Progress & Freedom
Foundation (PFF) will host an event titled "Conference on Broadband
Statistics". The first panel is titled "What Do We Know About Availability
and Use of Broadband in the United States?". The speakers will be Joseph Waz (Comcast),
Derek Turner (Free Press), Robert Atkinson (Information
Technology & Innovation Foundation), John Horrigan (Pew Internet & American
Life Project), Kenneth Flamm
(University of Texas at Austin),
and Dennis Weller (Verizon Communications). The moderator will be Drew Clark (CIP). The
second panel is titled "What Kinds of Broadband Data Collection Policies Should
the U.S. Employ?" The speakers will be Beth Shiroishi (AT&T),
Mark Lloyd (Center
for American Progress), Drew Clark (CPI), Laura Taylor (ConnectKentucky), Clair Kaye
(Cumberland Internet Inc.), and Colin Crowell (office of
Rep. Ed Markey (D-MA)). The
moderator will be Scott Wallsten (PFF). For more information, contact Steve Carpinelli
(CPI) at 202-481-1225 or Brooke Glass (PFF) at 202-969-2952. Location: National Academy
of Sciences, 2100 C St., NW.
10:00 AM. The Senate
Judiciary Committee (SJC) may hold an executive business meeting. The agenda again
includes consideration of S 1145
| LOC |
"Patent Reform Act of 2007". The SJC rarely follows its published agenda.
Location: Room 226, Dirksen Building.
10:00 AM. The
House Small Business Committee will
hold a hearing titled "Assessing the Impact of the Copyright Royalty Board
Decision to Increase Royalty Rates on Recording Artists and Small Webcasters".
For more information, contact Kate Gilman or Austin Bonner at 202-225-4038.
Location: Room 2360, Rayburn Building.
12:15 - 1:30 PM. The
Federal Communications Bar Association's (FCBA)
Wireless Committee will host a lunch titled "CPNI Compliance". The
speakers will be Bennett Ross (Wiley Rein), Marcus Maher (Associate Bureau Chief of the
FCC's Wireline Competition Bureau), and Melissa Ngo
Reservations and cancellations are due by 12:00 NOON on June 26. Location:
Latham & Watkins, 10th floor, 555 11th
1:00 PM. The Fiber to the
Home Council (FTTH) will host a web seminar titled "Content
and the Future of Broadband".
6:00 - 8:00 PM. The DC Bar Association
will host a panel discussion titled "Meet the FTC and FCC Legal Advisors".
notice. For more information, call 202-626-3463. The price to attend ranges from
$10-$15. Location: City Club of Washington at Franklin, 1300 I St., NW, McPherson
|Saturday, June 30
Trade promotion authority expires.
|Sunday, July 1
Opening date for sending a Notice of Internet Availability of Proxy
Materials to shareholders. See, the Securities and
Exchange Commission's (SEC)
rule [119 pages in PDF]
regarding voluntary internet availability of proxy materials. See also,
notice in the Federal Register, January 29, 2007, Vol. 72, No. 18, at Pages
4147-4173. And see, story titled "SEC Adopts E-Proxy Rule Changes" in
TLJ Daily E-Mail Alert No.
1,506, December 15, 2006.
|Monday, July 2
The House will not meet on July 2-6 due to the Independence Day District
Work Period. See, House 2007
The Senate will not meet on July 2-6 due to the Independence Day District
Work Period. See, Senate 2007
11:00 AM. The
Heritage Foundation will host an event titled "Irrational Politics:
What's Happening to Free Trade?". See,
Location: Heritage, 214 Massachusetts Ave, NE.
Deadline to submit initial comments to the
Copyright Office (CO) in response to its Notice
of Inquiry (NOI) regarding the operation of, and continued necessity for, the cable
and satellite statutory licenses under the Copyright Act.. See,
notice in the Federal Register, April 16, 2007, Vol. 72, No. 72, at Pages
19039-19055. See also, technical correction
notice in the Federal Register, April 24, 2007, Vol. 72, No. 78, at Page 20374.
Deadline for those persons who are scheduled to testify at the
Copyright Office's (CO) hearings on
July 23 through July 26, 2007, regarding the operation of, and continued
necessity for, the cable and satellite statutory licenses to submit to
the CO copies of their prepared testimony. See,
notice in the Federal Register, May 23, 2007, Vol. 72, No. 99, at Pages
Deadline to submit reply comments to the Federal
Communications Commission (FCC) in response to its request for comments updating its
record on the Center for the Study of Commercialism's (CSC) Petition for Reconsideration
regarding stations that air home shopping programming and their status. See,
notice in the Federal Register, May 17, 2007, Vol. 72, No. 95, at Pages
|Monday, July 9
There will be no votes in the House.
8:30 AM - 12:00 NOON. The
Electronic Transaction Association (ETA) will host
an event titled "Second Annual ETA Payments Education and Discussion Forum".
The ETA states that this event "is designed to provide Congressional staff,
regulators, and law enforcement with a working knowledge of the acquiring side
of the electronic payments business. Topics will include an overview of the
roles/responsibilities of entities in the payments system; the components of
an electronic transaction; and industry efforts to protect cardholder data." See,
notice [PDF] and
program agenda [PDF]. For more
information, and to RSVP, contact Rob Drozdowski at 202-828-2635 x203 or rob dot drozdowski at electran
dot org. A continental breakfast will be served. There is no charge. Location: Columbus Room, Union
10:00 AM. The U.S. Court of
Appeals (FedCir) will hear oral argument in SRI International v. Internet
Security, App. Ct. No. 2007-1065, a patent infringement case. Location: Courtroom
201, 717 Madison Place, NW.
10:00 AM. The U.S. Court
of Appeals (FedCir) will hear oral argument in Cybersettle v. National
Arbitration Forum, App. Ct. No. 2007-1092, a
patent infringement case. Location: Courtroom 203, 717 Madison Place, NW.
2:00 PM. The U.S. Court of
Appeals (FedCir) will hear oral argument in Dolby Labs v. Lucent
Technologies, App. Ct. No. 2006-1583, a
patent infringement case. Location: Courtroom 201, 717 Madison Place, NW.
2:00 - 3:30 PM. The U.S.
Chamber of Commerce's Coalition Against
Counterfeiting and Piracy (CACP) will meet. For more information, contact
counterfeiting at uschamber dot com or 202-463-5500. Location: U.S. Chamber,
1615 H St., NW.
Deadline to submit petitions to deny and
initial comments to the Federal Communications Commission
(FCC) regarding its review of the proposed merger of XM Satellite Radio Holdings and
Sirius Satellite Radio. See,
Notice [5 pages in PDF] (DA 07-2417).
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