Tech Law Journal Daily E-Mail Alert
November 19, 2008, Alert No. 1,859.
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FCC Commission Tate Addresses NARUC Convention

11/17. Federal Communications Commission (FCC) Commissioner Deborah Tate gave a speech [15 pages in PDF] to the National Association of Regulatory Utility Commissioners (NARUC) convention in New Orleans, Louisiana.

She discussed developments in information technologies and communications in the past decade, and major FCC proceedings.

She discussed federalism in the context of division of political power between state and federal governments. She said that "our government is still based on the principles of federalism. Certainly the Telecom Act clearly enunciated the concept of shared federalism."

The discussed the transformation of FCC regulation of broadband services from Title II to Title I, and the Supreme Court's opinion in the Brand X case. She said that "When the Supreme Court upheld the FCC's determination that broadband provided over cable networks is an information service, a door was opened for the Commission to expand this classification to other methods of providing broadband. We extended this to DSL service in 2005, broadband over power-lines in 2006 and wireless broadband in 2007."

She said that by removing the strict "legacy obligations from these services, the Commission took a great step toward the unencumbered deployment of broadband. I believe this deregulation has led to continued and substantial -- billions of dollars -- in investment. Making sure that companies continue to roll out new fiber is of the utmost importance."

She discussed the FCC's white space proceeding. She reiterated her position that she wants the FCC to "set aside a specific portion of this spectrum now for rural backhaul".

She discussed protecting children online from "child predators", "child pornography", "online addictions" and "cyberbullying".

She also discussed the FCC's universal service tax and subsidy programs and its intercarrier compensation regime. She said that she "will work closely with my fellow commissioners and state colleagues" on these issues.

But, she acknowledged that "the composition of the FCC will change in the next few months".

She also discussed FCC spectrum auctions, e-rate subsidies for schools, broadband mapping, and other issues.

FCC Chairman Martin has stated that the FCC will meet on Thursday, December 18, 2008.

Cato Paper Argues Against Network Neutrality Legislation

11/12. The Cato Institute released a paper [44 pages in PDF] titled "The Durable Internet: Preserving Network Neutrality without Regulation". The author is the Timothy Lee, a Cato adjunct scholar.

The paper argues that network neutrality legislation "would be premature" because "even in the absence of robust broadband competition network owners are likely to find deviations from the end-to-end principle unprofitable", and because regulations "inevitably come with unintended consequences".

This paper does not advance the argument that the relevant markets are competitive, and that this competition renders regulation unnecessary.

The paper elaborates that "Network owners who try to profit from discriminatory practices will encounter stiff resistance from an army of tech-savvy users who rapidly develop and disseminate countermeasures and workarounds. Network owners will find that they lack the leverage to effectively control the behavior of online firms and users and that efforts to limit the activities of their own customers are financial and publicr elations disasters. Network owners who try to construct a “walled garden” of proprietary applications and content are likely to be similarly disappointed, as proprietary services fail to keep pace with the open Internet."

Thus, the paper concludes that "ISPs are likely to respect network neutrality not because they want to but because economic and technological constraints leave them little choice."

It also argues that "Concerns that network owners will undermine free speech online are particularly misguided. Network owners have neither the technology nor the manpower to effectively filter online content based on the viewpoints being expressed, nor do profit-making businesses have any real incentive to do so."

"History suggests that regulatory efforts to protect the customers of major infrastructure owners often end badly." That is, "industry incumbents often find ways to turn the regulatory system to their own benefit". Then, instead of protecting consumers, federal regulatory agencies, such as the Interstate Commerce Commission, ended up protecting regulated companies from competition.

The paper also argues that network neutrality proponents "should think twice about demanding new regulatory regimes that could create barriers to entry for new market entrants. Complying with regulatory regimes requires the services of lawyers, lobbyists, accountants, and other highly paid professionals. Every dollar spent on these activities is a dollar that cannot be spent on R&D or new infrastructure. Regulations designed with today’s technologies in mind could in practice bar new entrants within novative business models and technologies."

Cuban Rebuts Some SEC Allegations

11/18. Mark Cuban's web site, titled "blog maverick: the mark cuban weblog", published further information about the Securities and Exchange Commission's (SEC) civil complaint [9 pages in PDF] filed against Cuban on November 17, 2008, in the U.S. District Court (NDTex) alleging securities fraud.

Cuban's web site states that "The SEC knows their case centers on one telephone conversation between two individuals -- 4 years ago. The SEC claims there was an agreement between these parties to the conversation to keep certain information confidential. We interviewed Guy Faure, the former CEO of Mamma.com Inc., with whom the SEC claims Mr. Cuban made an agreement. We had a court reporter transcribe the interview. There was no agreement to keep information confidential."

Cuban's web site contains an excerpt from that transcript. Cuban's web site does not state that this was a deposition, or otherwise taken under oath or penalty of perjury. The web site continues that "The SEC knows this-they have the transcript, yet they brought the case anyway. Why? Do they have a different statement from Mr. Faure?"

It concludes, "Why did the SEC end their multi-year investigation of Mamma.com Inc. for alleged securities laws violations days before interviewing present and former Mamma.com Inc. executives about this matter? Was the timing a coincidence? We think not."

See also, story titled "SEC Charges Mark Cuban with Insider Trading" in TLJ Daily E-Mail Alert No. 1,858, November 18, 2008.

This case is Securities and Exchange Commission v. Mark Cuban, U.S. District Court for the Northern District of Texas, Dallas Division, D.C. No. 3-08CV2050-D.

ITIF Releases State New Economy Index

11/18. The Information Technology and Innovation Foundation (ITIF) and the Kaufman Foundation released a joint report [88 pages in PDF] titled "2008 State New Economy Index: Benchmarking Economic Transformation in the States".

This report states that the purpose of this index "is to measure the economic structure of states." It focuses on "To what degree does the structure of state economies match the ideal structure of the New Economy?"

It is based on 29 variables, organized in 5 categories.

The report identifies each of the 29 variables. It lists each states' score and rank for each variable, and its overall score and rank.

For the overall index, the top ten states are Massachusetts, Washington, Maryland, Delaware, New Jersey, Connecticut, Virginia, California, New York, and Colorado.

The 29 variables are as follows:

Knowledge jobs

  • employment in IT occupations in non-IT sectors
  • the share of the workforce employed in managerial, professional, and technical occupations
  • the education level of the workforce
  • the average educational attainment of recent immigrants
  • the average education attainment of recent U.S. inter-state migrants
  • employment in high value-added manufacturing sectors
  • employment in high-wage traded services

Globalization

  • the extent to which the state's manufacturing and service workforce is employed producing goods and services for export
  • the share of the workforce employed by foreign-owned companies

Economic Dynamism

  • the share of jobs in fast-growing gazelle firms
  • the degree of job churning (which is a product of new business startups and existing business failures)
  • the number of Deloitte Technology Fast 500 and Inc. 500 firms
  • the value of companies’ IPOs
  • the number of entrepreneurs starting businesses
  • the number of individual inventor patents issued

Digital Economy

  • the percentage of the population online
  • Internet domain names
  • deployment of IT in public schools
  • the use of IT to deliver state government services
  • the percentage of farmers online and using computers
  • the deployment of broadband telecommunications
  • health IT

Innovation Capacity

  • share of jobs in high-tech industries
  • scientists and engineers as a share of the workforce
  • the number of patents relative to the size of the workforce
  • industry R&D as a share of worker earnings
  • non-industrial R&D as a share of GSP
  • movement toward a green economy
  • venture capital invested as a share of worker earnings
More News

11/19. Sen. Max Baucus (D-MT) and Sen. Chuck Grassley (R-IA) sent a letter [PDF] to President Ma Ying-jeou of the Republic of China regarding trade issues, and in particular, "Taiwanese barriers to U.S. agricultural products". They stated that "We were proponents of Taiwan's accession to the World Trade Organization (WTO). It is troubling that Taiwan is engaging in repeated abuses of food safety requirements designed to exclude U.S. agricultural imports from your market -- actions that may violate WTO rules." Sen. Baucus and Sen. Grassley are the Chairman and ranking Republican on the Senate Finance Committee, which has jurisdiction over international trade matters. Both Senators represent states that export agricultural products.

11/19. The Department of Justice's (DOJ) Antitrust Division release a document [29 pages in PDF] that explains the DOJ's antitrust leniency program, under which "a corporation can avoid criminal conviction and fines, and individuals can avoid criminal conviction, prison terms, and fines, by being the first to confess participation in a criminal antitrust violation, fully cooperating with the Division, and meeting other specified conditions."

11/18. President Bush issue an Executive Order that amends Executive Order 9397 regarding federal agency use of social security numbers (SSNs) and other identifiers. The just released item provides, among other things, that "It is the policy of the United States that Federal agencies should conduct agency activities that involve personal identifiers in a manner consistent with protection of such identifiers against unlawful use." Former President Franklin Roosevelt issue EO 9397 on November 22, 1943. It directed certain agencies to use SSNs.

11/18. The Bureau of Industry and Security (BIS) published a notice in the Federal Register that announces, describes, recites, and sets the effective date (November 18, 2008) for, its rules changes to its Export Administration Regulations (EAR) regarding certain end-user/end-use controls. These changes impact, among other things, high performance computers, encryption products, and software. See, Federal Register, November 18, 2008, Vol. 73, No. 223, at Pages 68321-68328.

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In This Issue

This issue contains the following items:
 • FCC Commission Tate Addresses NARUC Convention
 • Cato Paper Argues Against Network Neutrality Legislation
 • Cuban Rebuts Some SEC Allegations
 • ITIF Releases State New Economy Index
 • People and Appointments (including the possibility that Obama will nominate Eric Holder for AG)
 • More News (including developments in trade with Taiwan, and the DOJ's antitrust leniency program)

People and Appointments

11/18. Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), commented in a release on the possibility that President elect Obama may nominate Eric Holder to be Attorney General. Sen. Leahy stated that "I have known Eric Holder for many years. He has served as a prosecutor, judge and high ranking law enforcement official. He would make an outstanding nominee, and should have the support of Senators from both sides of the aisle if President-elect Obama were to choose him for this critical position." Holder is a partner in the Washington DC office of the law firm of Covington & Burling. He was U.S. Attorney for the District of Columbia, and later Deputy Attorney General, during the Clinton administration.

11/19. Jules Polonetsky and Christopher Wolf (Proskauer Rose) formed a group titled "Future of Privacy". The group's web site states that it will be run by Polonetsky, who was previously chief privacy officer at AOL. The advisory board includes law professors, such as Danile Solove (GWU) and Peter Swire (Ohio State). It also includes information technology and communications industry representatives, such as Dorothy Attwood (AT&T), Peter Cullen (Microsoft), Carol DiBattiste (LexisNexis), David Hoffman (Intel), and Harriet Pearson (IBM). It also includes representatives of other groups, such as Ari Schwartz (CDT), Simon Davies (Privacy International), and Chris Hoofnagle (UC Berkeley). The group's web site does not disclose the sources of its funding. This is standard. The Computer and Communications Industry Association (CCIA) issued a statement in which it expressed "some skepticism about a group heavily funded by large corporations with sketchy records on privacy -- especially with credible groups like the Electronic Privacy Information Center, Electronic Frontier Foundation and the Center for Democracy & Technology already tackling electronic privacy issues."

Washington Tech Calendar
New items are highlighted in red.
Thursday, November 20

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's schedule for week of November 17. Rep. Hoyer's schedule for November 20 states that "following the Pledge of Allegiance, the House is expected to recess subject to the Call of the Chair awaiting further action from the Senate."

The Senate will meet at 9:30 AM. It will resume consideration of the motion to proceed to HR 6867 [LOC | WW], the "Unemployment Compensation Extension Act of 2008".

8:30 - 10:00 AM. The Information Technology and Innovation Foundation (ITIF) will host an event titled "ITIF Breakfast Forum: The Netherlands’ National Pay-per-Use Road-Pricing Initiative". The speaker will be Al Joris (General Director of The Netherlands’ Centre for Transport and Navigation in the Ministry of Transport). This system will employ satellite tracking technology and on board mileage data systems. See, notice. Location: ITIF, Suite 200, 1250 Eye St., NW.

8:30 AM - 5:30 PM. The National Science Foundation's (NSF) Advisory Committee for Social, Behavioral, and Economic Sciences will meet. The agenda includes "CyberInfrastructure, Cyber-enabled Discovery and Innovation". See, notice in the Federal Register, November 3, 2008, Vol. 73, No. 213, at Page 65414. Location: NSF, 4201 Wilson Boulevard, Stafford I, Third Floor, Room 375, Arlington, VA.

9:00 AM - 1:00 PM. The Department of Homeland Security's (DHS) U.S. Customs and Border Protection's (CBP) Advisory Committee on Commercial Operations of Customs and Border Protection and Related Homeland Security Functions  will meet. The agenda includes "Intellectual Property Rights Enforcement". See, notice in the Federal Register, November 5, 2008, Vol. 73, No. 215, at Page 65871. Location: Rotunda Ballroom, Ronald Reagan Building, 1300 Pennsylvania Ave., NW.

9:00 AM - 5:30 PM. Day four of a five day closed meeting of the National Institute of Standards and Technology's (NIST) Judges Panel of the Malcolm Baldrige National Quality Award. The panel will conduct final judging of the 2008 applicants. See, notice in the Federal Register: October 28, 2008, Vol. 73, No. 209, at Page 63946. Location: NIST, Administration Building, Lecture Room E, Gaithersburg, MD.

10:00 AM. The U.S. District Court (DC) will hold a sentencing hearing in US v. E-Gold, D.C. No. 07-cr-0109, a criminal prosecution of a business that enabled people to engage in anonymous online financial transactions. See, story titled "DOJ Obtains Guilty Pleas in E-Gold Case" in TLJ Daily E-Mail Alert No. 1,797, July 22, 2008. Location: Courtroom 2.

10:30 AM. The U.S. District Court (DC) will hold a telephone conference in Juniper Networks v. Bahattab, D.C. No. 07-cv-1771, a patent case.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Wireless Committee will host a lunch titled "Wireless Facilities Siting". The speakers will be Brian Fontes (National Emergency Number Association), Christopher Guttman-McCabe (CTIA), Bill Hackett (T-Mobile), and Jeffrey Steinberg (Deputy Chief of the FCC's Wireless Telecommunications Bureau's (WTB) Spectrum and Competition Policy Division. See, notice and registration page. The price to attend is $15. Location: Sidley Austin, 1501 K St., NW.

1:00 - 2:30 PM. The House Intelligence Committee (HIC) will hold a closed hearing. Location: Room H-405, Capitol Building.

1:00 PM. The Department of Health and Human Services' (DHHS) American Health Information Community's (AHIC) Confidentiality, Privacy, & Security Workgroup may meet. AHIC meetings are often noticed, but cancelled. Location: Switzer Building, 330 C St., SW.

1:30 PM. The U.S. District Court (DC) will hold a telephone conference in Covad Communications v. Revonet, D.C. No. 06-cv-1892.

5:30 - 7:30 PM. The DC Bar Association will host a closed event titled "Espionage and Family Law: The Use and Abuse of Electronic Surveillance". The speakers will be Eric Wenger (Department of Justice, Criminal Division), Guilherme Roschke (American Bar Association), and Sharon Nelson (Sensei). The price to attend ranges from $20 to $55. For more information, contact 202-626-3463. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

Day one of a two day conference titled "9th Security 2008 Conference and Exhibition". At 2:00 PM there will be a panel titled "Effective Security Architectures and Protecting Personally Identifiable Information". The speakers will include Hugo Teufel (Chief Privacy Officer of the Department of Homeland Security), Ken Mortensen (Department of Justice) and Ron Ross (NIST). See, agenda. Location: Ronald Reagan Building , 1300 Pennsylvania Ave., NW.

Friday, November 21

The House may meet at 9:00 AM for legislative business. It may consider bailout legislation. See, Rep. Hoyer's schedule for week of November 17.

8:00 AM - 5:30 PM. Day five of a five day closed meeting of the National Institute of Standards and Technology's (NIST) Judges Panel of the Malcolm Baldrige National Quality Award. The panel will conduct final judging of the 2008 applicants. See, notice in the Federal Register: October 28, 2008, Vol. 73, No. 209, at Page 63946. Location: NIST, Administration Building, Lecture Room E, Gaithersburg, MD.

8:30 - 11:45 PM. Day two of a two day meeting of the National Science Foundation's (NSF) Advisory Committee for Social, Behavioral, and Economic Sciences. See, notice in the Federal Register, November 3, 2008, Vol. 73, No. 213, at Page 65414. Location: NSF, 4201 Wilson Boulevard, Stafford I, Third Floor, Room 375, Arlington, VA.

9:00 - 11:00 AM. The Information Technology and Innovation Foundation (ITIF) will host a debate titled "Are Broadband Markets Competitive Enough?" The speakers will be Jeff Eisenach (Chairman of Empiris), Ev Ehrlich (President of ESC Company), and John Windhausen (President of Telepoly). Eisenach and Ehrlich will argue that the broadband market is competitive, and will present two new papers titled "The Reality of Competition in the Broadband Market" and "U.S. Broadband Policies: A Market-Oriented Success Story." Windhausen will argue that the broadband market is not fully competitive. Robert Atkinson (head of the ITIF) will moderate. See, notice and registration page. Location: ITIF, Suite 200, 1250 Eye St., NW.

12:15 - 1:45 PM. The New America Foundation (NAF) will host a panel discussion titled "Homes With Tails: What If You Could Own Your Internet Connection?" The speakers will be Tim Wu (Columbia Law School), Derek Slater (Google), Robert Atkinson (Information Technology and Innovation Foundation), Sascha Meinrath (NAF), and Michael Calabrese (NAF). See, notice and registration page. Location: NAF, 7th floor, 1630 Connecticut Ave., NW.

2:15 PM. The U.S. District Court (DC) will hold a sentencing hearing in US v. E-Gold, D.C. No. 07-cr-0109, a criminal prosecution of a business that enabled people to engage in anonymous online financial transactions. See, story titled "DOJ Obtains Guilty Pleas in E-Gold Case" in TLJ Daily E-Mail Alert No. 1,797, July 22, 2008. Location: Courtroom 2.

Day two of a two day conference titled "9th Security 2008 Conference and Exhibition". See, agenda. Location: Ronald Reagan Building , 1300 Pennsylvania Ave., NW.

Monday, November 24

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Intellectual Property Practice Committee will host a brown bag lunch titled "The Copyright Royalty Board: Recent Decisions". The speakers will be Bruce Joseph (Wiley Rein), David Oxenford (Davis Wright Tremaine), Robert Garrett (Arnold & Porter), and Tom Perrelli (Jenner & Block). Location: Dow Lohnes, 1200 New Hampshire Ave., NW.

Extended deadline to submit comments to the Copyright Office (CO) in response to its request for comments regarding its proposal to raise fees for registration of claims, special services and Licensing Division services. See, original notice in the Federal Register, October 14, 2008, Vol. 73, No. 199, at Pages 60658-60662, and notice of extension in the Federal Register, October 31, 2008, Vol. 73, No. 212, at Pages 64905-64906. See also, story titled "Copyright Office Proposes to Raise Registration Fees" in TLJ Daily E-Mail Alert No. 1,843, October 15, 2008.

Tuesday, November 25

10:30 AM. The Heritage Foundation will host an event titled "Taiwan, Democracy, and the Rule of Law". The speakers will be Ching Jyh Shieh (Former Deputy Minister of the National Science Council, Republic of China) and Stephen Yates (Heritage). Location: Heritage, 214 Massachusetts Ave., NE.

Wednesday, November 26

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to the FNPRM portion of its November 5, 2008, Order on Remand regarding universal service, IP enabled services, intercarrier compensation, and other topics. See, notice in the Federal Register, November 12, 2008, Vol. 73, No. 219, at Pages 66821-66830. The FCC adopted and released this Order on Remand and Report and Order and Further Notice of Proposed Rulemaking [430 pages in PDF] on November 5. FCC Chairman Kevin Martin offered this explanation in his statement associated with this item: "Today we tell the U.S. Court of Appeals for the D.C. Circuit and the Federal-State Joint Board on Universal Service that, after years of deliberation, we are still unready to move forward with comprehensive reform of intercarrier compensation and universal service. Instead, we issue another open-ended Further Notice of Proposed Rulemaking on a variety of approaches for comprehensive reform, and my colleagues promise to act on it by December 18." This item is FCC 08-262 in WC Docket No. 05-337, CC Docket No. 96-45, and WC Docket No. 03-109, WC Docket No. 06-122, and CC Docket No. 99-200, CC Docket No. 96-98, and CC Docket No. 01-92, CC Docket No. 99-68, and WC Docket No. 04-36.

Thursday, November 27

Thanksgiving Day. See, Office of Personnel Management's (OPM) list of 2008 federal holidays.