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July 25, 2007, Alert No. 1,616.
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FCC to Adopt 700 MHz Band Rules at July 31 Event

7/25. The Federal Communications Commission (FCC) released the agenda [2 pages in PDF] for its event on July 31, 2007, titled "Open Meeting". The FCC is scheduled to adopt rules regarding the upcoming auction of spectrum in 700 MHz band for wireless services. It is also scheduled to adopt an order regarding roaming obligations of CMRS providers.

The FCC is scheduled to adopt a Second Report and Order that contains service rules for the 698-746,747-762 and 777-792 MHz Bands. This is WT Docket No. 06-150. This pertains to the auction of spectrum usage rights in spectrum that is currently occupied by television broadcasters in Channels 52-69.

This item also pertains to the following proceedings and docket numbers: "Revision of Commission’s Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems" (CC Docket No. 94-102), "Section 68.4(a) of the Commission’s Rules Governing Hearing Aid-Compatible Telephones" (WT Docket No. 01-309), "Biennial Regulatory Review -- Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various Rules Affecting Wireless Radio Services" (WT Docket No. 03-264), "Former Nextel Communications, Inc. , Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission’s Rules" (WT Docket No. 06-169), "Implementing a Nationwide, Broadband, Interoperable Public Safety Network in the 700 MHz Band" (PS Docket No. 06-229), and "Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010" (WT Docket No. 96-86).

The FCC is also scheduled to adopt a Report and Order (R&O) regarding roaming obligations of Commercial Mobile Radio Service (CMRS) providers.

This R&O is in the FCC's proceedings tilted "Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers" and "Automatic and Manual Roaming Obligations Pertaining to Commercial Mobile Radio Services", and numbered WT Docket No. 05-265 and WT Docket No. 00-193 respectively.

The agenda lists only these two items.

This event is scheduled for 10:00 AM on Tuesday, July 31, 2007 in the FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW. The event will be webcast by the FCC. The FCC does not always consider all of the items on its published agenda. The FCC sometimes adds items to the agenda without providing the "one week" notice required 5 U.S.C. § 552b. The FCC does not always start its events at the scheduled time, or at all. The FCC usually does not release at its events copies of the items that it adopts at its events. The FCC has not always written the items that it adopts at its events.

DUSTER Bhatia Discusses Trade with Asia and Korea US FTA

7/24. Karan Bhatia, a Deputy U.S. Trade Representative (USTR), gave a speech [PDF] in Washington DC to the Washington International Trade Association (WITA) titled "U.S. Trade Relations with Asia".

He said that "We must work to open these fast-growing markets to U.S. goods, services and investment and we must retain the openness of our markets to theirs. We must work to promote lasting economic reform among trading partners in the region and integrate them into the multilateral rules-based system to help develop and grow their economies. We must create institutions that firmly tie Asia’s economies to ours, and we must dedicate the resources to make sure those institutions succeed."

He then focused on the Korea U.S. free trade agreement (KORUS FTA). He said that "Other than a successful conclusion to the Doha Round, enactment of the KORUS FTA may be the single most important action that can be taken today to further U.S. trade objectives in the region."

He argued that this is a "gold standard FTA that boasts state-of-the-art rights and protection for investors, landmark commitments by Korea on market access for services, substantial new protections for intellectual property rights".

"If we succumb to protectionism within our own borders, and allow KORUS to fail", said Bhatia, "the repercussions promise to be severe and enduring. If unable to effectuate a strong and comprehensive FTA that clearly benefits the United States, U.S. credibility in Asia will be dealt a serious blow as trading partners will be left to question our commitment to our vital relationships in the region."

He added that Korea is already negotiating trade agreements with the EU, Canada and India, and "may be contemplating launching with China as well".

He concluded that "I am ultimately confident that Congress will see the critical importance of KORUS, and it will be ratified." He also said that since the KORUS FTA was signed on June 30, "it qualifies to be considered by Congress in an up-or-down vote as stipulated by the Trade Promotion Authority that expired on July 1."

Moreover, he said, the Congress should renew trade promotion authority, which allows the President, through his trade representatives, to negotiate trade agreements that the Congress can approve or reject, but not amend.

FTC Releases Annual Report on HSR Merger Reviews

7/24. The Federal Trade Commission (FTC) released its 29th annual report [51 pages in PDF] to the Congress titled "Hart-Scott-Rodino Annual Report Fiscal Year 2006". This pertains to the antitrust merger reviews conducted by the FTC and the Department of Justice's (DOJ) Antitrust Division.

The report summarizes the HSR merger reviews for SBC/AT&T (see, page 11), Verizon/MCI (page 11), and Alltel/Midwest Wireless (page 14).

The report does not address the pending XM/Sirius merger review.

Section 201 of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which is now Public Law No. 94-435, amended the Clayton Act by adding a new Section 7A, which is codified at 15 U.S.C § 18a. This report does not address antitrust merger reviews conducted by the Federal Communications Commission (FCC), which are not authorized under the HSR Act.

The report also provides summary data. "In fiscal year 2006, 1,768 transactions were reported under the HSR Act, representing about a four percent increase from the 1,695 transactions reported in fiscal year 2005". The report lists 1,014 for FY 2003 and 1,454 for FY 2004.

These numbers of annual reported transactions are way down from a high of 4,926 transactions reported in FY 2000. However, that was before the Congress enacted legislation raising the reporting thresholds.

The report states that the FTC challenged 16 transactions in FY 2006, "leading to nine consent orders and seven abandoned transactions". It adds that the DOJ challenged 16, "leading to eight consent decrees, two abandoned transactions, and six other transactions that were restructured after the Division informed the parties of its antitrust concerns relating to the transaction."

4th Circuit Rules on ILEC Cash Rebates and Resale Rate Setting

7/25. The U.S. Court of Appeals (4thCir) issued its opinion [28 pages in PDF] in BellSouth v. Sanford, a case regarding Section 251 resale of telecommunications services at wholesale rates, and the effect of ILEC's offerings of gift cards and cash rebates to its customers upon public utility commission rate setting under Section 252.

The Court of Appeals held that "the value of an incumbent provider's incentive offers to subscribers, such as gift cards and cash rebates, when extended to subscribers for more than 90 days, created a promotional retail rate that must be offered to would-be competitors, less a wholesale discount."

In this case, BellSouth is an incumbent local exchange carrier (ILEC) in the state of North Carolina. (It has since merged with AT&T.)

The Telecommunications Act of 1996 imposed upon ILECs the obligation to "offer for resale at wholesale rates any telecommunications service that the carrier provides at retail to subscribers who are not telecommunications carriers" and "not to prohibit, and not to impose unreasonable or discriminatory conditions or limitations on, the resale of such telecommunications service, except that a State commission may, consistent with regulations prescribed by the Commission under this section, prohibit a reseller that obtains at wholesale rates a telecommunications service that is available at retail only to a category of subscribers from offering such service to a different category of subscribers". These obligations are codified at 47 U.S.C. § 251(c)(4).

Then, 47 U.S.C. § 252(d)(3) provides that "For the purposes of section 251(c)(4) of this title, a State commission shall determine wholesale rates on the basis of retail rates charged to subscribers for the telecommunications service requested, excluding the portion thereof attributable to any marketing, billing, collection, and other costs that will be avoided by the local exchange carrier."

In this case, the relevant "state Commission" is the North Carolina Utilities Commission (NCUC).

BellSouth proposed in a filing with the NCUC to offer its customers "a coupon for a check for $100 as an incentive to subscribe to one or more regular residence lines and two or more features." It added that it would not extend this offer to competing providers under Section 251(c)(4).

The NCUC ruled that BellSouth's incentives decreased the retail rate for the purpose of calculating the wholesale rate.

The NCUC determined that retail customers effectively paid less for their telephone service in the amount of the incentives. It concluded that BellSouth was required to pass on the value of such incentives as a price reduction when selling its services to resellers, unless it could show that such restrictions on resale were "reasonable and nondiscriminatory."

BellSouth then filed a complaint against Jo An Sanford, and the other NCUC Commissioners, and the NCUC, in U.S. District Court (WDNC) challenging the order of the NCUC.

The District Court held that the NCUC order is invalid, and further held that an ILEC's incentives to retail subscribers, other than direct reductions in price, need not be taken into account in calculating the wholesale rate to be charged would be competitors.

The NCUC brought the present appeal. The Court of Appeals reversed the District Court, and remanded, with instructions to grant summary judgment for the NCUC.

This case is BellSouth Communications, Inc. v. Jo Ann Sanford, et al., U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 06-1678, an appeal from the U.S. District Court for the Western District of North Carolina, D.C. No. 3:05-cv-00345, Judge Graham Mullen presiding. Judge Niemeyer wrote the opinion of the Court of Appeals, in which Judge T.S. Ellis, sitting by designation, joined. Judge Williams wrote a concurring opinion.

People and Appointments

7/23. President Bush named Ann Johnston to be Special Assistant to the President for Legislative Affairs. She was Johnston was previously SVP of Capitol Hill Consulting Group. See, White House release.

More News

7/25. A grand jury of the U.S. District Court (SDNY) returned an indictment that charges Carole Argo, a former Chief Financial Officer of SafeNet, Inc., with violation of federal securities and other laws in connection with alleged backdating of employee stock option grants. SafeNet provides software information security products and services. The Department of Justice (DOJ) stated in a release [4 pages in PDF] that SafeNet is based in Maryland, and that Argo is "of Baltimore, Maryland". It brought this action in New York.

7/25. A grand jury of the U.S. District Court (CDCal) returned an indictment that charges Ira Isaacs with the online sale of obscene DVDs. The Department of Justice (DOJ) stated in a release that the indictment charges Isaacs, "doing business as Stolen Car Films and LA Media, with four counts of using an interactive computer service to sell and distribute obscene films on DVD, two counts of using a common carrier to distribute obscene DVDs, and two counts of failing to label sexually explicit DVDs ..." The DOJ release alleges obscenity, but does not allege the Isaacs' activities involved child pornography.

7/24. The Department of the Treasury (DOT) announced that Henry Paulson (Secretary of the Treasury) will travel to the People's Republic of China on July 30-31 to discuss the U.S.-China Strategic Economic Dialogue (SED). He will meet with President Hu and Vice Premier Wu Yi in Beijing. See, DOT release. The U.S. and the PRC established the SED in September of 2006 to address intellectual property rights, market access, and other issues. See, story titled "US and PRC Announce Strategic Economic Dialogue" in TLJ Daily E-Mail Alert No. 1,455, September 25, 2007.

7/23. The Government Accountability Office (GAO) released a report [64 pages in PDF] titled "Information Technology: Treasury Needs to Strengthen Its Investment Board Operations and Oversight". The report finds that while the Department of the Treasury "has established many of the capabilities needed to select, control, and evaluate its IT investments, the department has significant weaknesses that hamper its ability to effectively manage its investments."

7/23. The Progress and Freedom Foundation (PFF) announced that Eric Schmidt, CEO of Google, will be the keynote speaker at its "Aspen Summit", to be held at the St. Regis Hotel in Aspen, Colorado, on August 19-21, 2007. Other speakers will include David Gross (Department of State), Robert McDowell (FCC Commissioner), and William Kovacic (FTC Commissioner). See, PFF release and event agenda.

Washington Tech Calendar
New items are highlighted in red.
Thursday, July 26

The House will meet at 10:00 AM for legislative business. The House may consider HR 3093 [LOC | WW], the "Departments of Commerce and Justice, and Science, and Related Agencies Appropriations Bill, 2008", and/or HR 2419 [LOC | WW], the "Farm Bill Extension Act of 2007", subject to rules. See, Rep. Hoyer's weekly calendar [PDF].

The Senate will meet at 9:30 AM. It will resume consideration of HR 2638 [LOC | WW], the "Department of Homeland Security Appropriations Act, 2008".

9:00 AM. The Department of the Treasury (DOT) will host a series of events beginning at 9:00 AM that pertain to "Business Taxation and Global Competitiveness". Secretary of the Treasury Henry Paulson will speak at 9:00 AM. There will be a "Plenary Session" titled "Business and Economic Perspectives" at 9:05 AM. There will be a "Roundtable Discussion" titled "Economic Distortions Created by Business Tax System" at 10:15 AM. There will be a "Roundtable Discussion" titled "Impact of the Current International Tax System on Competitiveness" at 11:30 AM. Paulson will speak again at 12:45 PM. There will be a ped and pad news conference at 1:00 AM. A DOT notice states that "Media without Treasury press credentials should contact Frances Anderson at" 202-622-2960 or frances dot anderson at do dot treas dot gov with the following information: full name, Social Security Number, and date of birth. See, DOT notice. Location: DOT, 1500 Pennsylvania Ave., NW.

9:00 AM. The Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Information Systems Technical Advisory Committee will hold a closed meeting. See, notice in the Federal Register: July 6, 2007, Vol. 72, No. 129, at Page 36955. Location: DOC, Room 3884, 14th Street between Constitution and Pennsylvania Avenues, NW.

9:30 AM - 12:45 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled "Legal Cybersleuth's Guide to Investigative Research". The speakers will be Carole Levitt and Mark Rosch of Internet For Lawyers" . See, notice. For more information, call 202-626-3488. The price to attend ranges from $80-$115. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

9:30 AM. The Global Business Dialogue will hold a meeting titled "Korea-US FTA". Location: National Press Club, 13th Floor, 529 14th St. NW.

10:00 AM - 12:00 NOON. The House Science Committee will hold a hearing titled "The Globalization of R&D and Innovation, Pt. II: The University Response". The witnesses will be David Skorton (Cornell University), Philip Altbach (Boston College), Gary Schuster (Georgia Institute of Technology), and Mark Wessel (Heinz School of Public Policy and Management). Press contact: Alisha Prather at alisha dot prather at mail dot house dot gov or 202-225-6375, or Brandis Griffith at brandis dot griffith at mail dot house dot gov. Location: Room 2318, Rayburn Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Preparing Consumers for the Digital Television Transition". See, notice. Location: Room 253, Russell Building.

10:00 AM - 5:00 PM. Day four of a four day hearing of the Copyright Office (CO) regarding the operation of, and continued necessity for, the cable and satellite statutory licenses under the Copyright Act. See, notice in the Federal Register, May 23, 2007, Vol. 72, No. 99, at Pages 28998-29000. Location: Copyright Office Hearing Room, 4th Floor, Madison Building, 101 Independence Ave., SE.

10:00 AM. The House Homeland Security Committee's (HHSC) Subcommittee on Intelligence, Information Sharing and Terrorism Risk Assessment will hold a hearing titled "Private Sector Information Sharing: What Is It, Who Does It, and What’s Working at DHS". The hearing will be webcast by the HHSC. For more information, contact Dena Graziano or Adam Comis at 202- 225-9978. Location: Room 311, Cannon Building.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Commercial and Administrative Law will hold a hearing on the Internet Tax Freedom Act. See, notice. Location: Room 2141, Rayburn Building.

12:00 NOON. Senate Republicans will hold a news conference regarding the nomination of Judge Leslie Southwick to be a Judge of the U.S. Court of Appeals for the 5th Circuit. Location: Room SD-192, Dirksen Building.

1:30 PM. The House Judiciary Committee's (HJC) Subcommittee on Commercial and Administrative Law will hold an oversight hearing on the Federal Bureau of Investigation (FBI). See, notice. Location: Room 2141, Rayburn Building.

1:45 - 5:00 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled "An A to Z Guide to Tech Tools, Terms & Tips for Lawyers". The speakers will be Carole Levitt and Mark Rosch of Internet For Lawyers" . See, notice. For more information, call 202-626-3488. The price to attend ranges from $80-$115. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

2:00 PM. The House Foreign Affairs Committee's Subcommittee on Terrorism, Nonproliferation, and Trade will hold a hearing titled "Exports Controls: Are We Protecting Security and Facilitating Exports?". The witnesses will be Christopher Padilla (head of the Department of Commerce's Bureau of Industry and Security), Stephen Mull (Department of State), Beth McCormick (head of the Department of Defense's Defense Technology Security Administration), John Douglass (head of the Aerospace Industries Association of America), Will Lowell (Lowell Defense Trade). See, notice. Location: Room B-318, Rayburn Building.

3:30 PM. The Senate Finance Committee (SFC) will hold a hearing on S 1607 [LOC | WW], the "Exchange Rate Oversight Reform Act of 2007". See, notice. Location: Room 215, Dirksen Building.

Friday, July 27

The House may meet at 9:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

POSTPONED. 9:30 AM. The House Judiciary Committee (HJC) will hold a hearing on HR 2128 [LOC | WW], the "Sunshine in the Courtroom Act of 2007", a bill that would allow the U.S. Supreme Court, U.S. Courts of Appeals and U.S. District Courts to "permit the photographing, electronic recording, broadcasting, or televising to the public of any court proceeding". See, notice. Location: Room 2141, Rayburn Building.

Monday, July 30

5:00 PM. The National Science Foundation (NSF) will host a closed meeting, on site and by teleconference, regarding an Office of the Inspector General report. See, notice in the Federal Register, July 18, 2007, Vol. 72, No. 137, at Page 39467. Location: National Science Board Office, NSF, 4201 Wilson Blvd., Arlington, VA.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its request to refresh the record of its 2001 Further Notice of Proposed Rulemaking (FNPRM) regarding "the status of the market for the provision of telecommunications services in Multiple Tenant Environments (MTEs), and on whether the prohibition on exclusive access contracts in commercial MTEs should be extended to residential MTEs". See, notice in the Federal Register, May 30, 2007, Vol. 72, No. 103, at Pages 29928-29929. This item is DA 07-1485 WT Docket No. 99-217 and CC Docket No. 96-98.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its Draft Special Publication 800-38D [29 pages in PDF] titled "Recommendation for Block Cipher Modes of Operation: Galois/Counter Mode (GCM) for Confidentiality and Authentication".

Tuesday, July 31

9:00 AM - 4:30 PM. The U.S.-China Economic and Security Review Commission (USCC) will hold a hearing. The USCC web site stated that the title is "Freedom of Expression in China: Internet and Media Controls". The USCC's notice in the Federal Register states that the hearing is titled "Access to Information in the People's Republic of China", and that it will examine "developments in Chinese information control mechanisms". See, Federal Register, July 18, 2007, Vol. 72, No. 137, at Pages 39479-39480. Location: Room 385, Russell Building, Capitol Hill.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet and Intellectual Property (SCIIP) will hold a hearing titled "Ensuring Artists Fair Compensation: Updating the Performance Right and Platform Parity for the 21st Century". See, notice. Location: Room 2141, Rayburn Building.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its Draft Special Publication 800-53A [PDF] titled "Guide for Assessing the Security Controls in Federal Information Systems".

Wednesday, August 1

9:00 AM - 1:30 PM. The U.S. Chamber of Commerce will host a conference titled "Lawsuits and Global Competitiveness: Is the U.S. Litigation System a Beacon or Barrier to Foreign Investment?". See, notice. Prices vary. For more information, contact Danielle Walker at 202-463-5500 or ncfevents at uschamber dot com. Location: Chamber, 1615 H St., NW.

12:30 PM. Sen. Joe Biden (D-DE), Chairman of the Senate Foreign Relations Committee, will give a speech. Location: Ballroom, National Press Club, 529 14th St. NW, 13th Floor.

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing titled "Oversight of the U.S. Department of Commerce". See, notice. Location: Room 253, Russell Building.

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