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February 17, 2009, Alert No. 1,901.
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Obama Signs Spending Bill

2/17. President Obama signed into law HR 1 [LOC | WW], the deficit spending bill, in Denver, Colorado.

Neither Obama, nor House or Senate Democratic leaders, released a copy of this bill until just before midnight, the night before Congressional passage on February 13.

It was enacted, as President Obama stated in a release, with an "unprecedented level of transparency".

The process for enactment of the USA PATRIOT Act was perhaps the most rushed and non-transparent process during the Bush administration for a major piece of legislation. The two bills can be compared on quantitative criteria.

The time that elapsed between introduction of HR 1 (January 26) and passage by the House and Senate (February 13) was 18 days.

The first publicly released copy of the bill that evolved into the USA PATRIOT Act was the Bush administration's release of its draft titled "Anti Terrorism Act of 2001" on September 19, 2001. This was revised by the introduction of HR 2975 (October 2), at a marathon House Judiciary Committee (HJC) markup (October 3), and by House amendment and passage (October 12). The Senate passed another version, S 1510, the day before (October 11). The conference produced a new bill, HR 3162, which passed the House (October 24) and the Senate (October 25). Thus, the legislative process for the USA PATRIOT Act was 38 days -- more than twice as long as for HR 1.

As for length, the USA PATRIOT Act is 271 pages in single spaced GPO PDF. HR 1 is 1071 pages in double spaced PDF, or about twice as long as the USA PATRIOT Act.

Also, House Republican leaders in 2001 allowed a long and open HJC mark up, an attribute of openness. See, story titled "House Judiciary Committee Passes PATRIOT Act" and related stories in TLJ Daily E-Mail Alert No. 279, October 4, 2001. But then, the House Rules Committee sent a different version of the bill to the House floor, which is not an open procedure.

Also, while the Bush administration's conduct during consideration of the USA PATRIOT Act could hardly be characterized as open or transparent, administration officials did make numerous appearances before Congressional committees, and at speaking events around Washington DC, to explain and answer questions about the content of the bill. The Bush administration acted with less secrecy than did the Obama administration on HR 1.

For an incomplete summary of the technology related provisions of HR 1, see the following stories in TLJ Daily E-Mail Alert No. 1,899:
  House and Senate to Vote on Conference Report on Spending Bill
  Summary of Broadband Grants Provisions in Spending Bill
  Spending Bill Includes More DTV Transition Funding
  Spending Bill Includes Research Funding
  Spending Bill Includes Smoot Hawley Provision

CEA Chief Criticizes Spending Bill, Protectionism, Unionization Mandates, and Anti-Immigration Policy

2/17. Gary Shapiro, head of the Consumer Electronics Association (CEA), gave a speech to the Media Institute in Washington DC in which he condemned in blunt language the just enacted spending bill, HR 1 [LOC | WW], and the news media's failure to report on it.

  Photo of Gary Shapiro, copyright CEA.
  Gary Shapiro
Copyright CEA

Shapiro said that the bill will create an immense debt to be paid by future generations; he also questioned whether it will stimulate the economy. He said that "The irresponsibility and the lack of discussion are breathtaking."

He also criticized the bill's protectionist language, arguing that it will invite retaliation from trade partners, and thereby create the same harm that resulted from the depression era Smoot Hawley bill.

Shapiro excoriated the news media at length for its failure to accurately report on the content and consequences of this bill. He said that "Our national conspiracy to ignore financial reality will doom us to second class status and we will all be responsible for our silence."

He also condemned a legislative proposal and an executive order that contain unionization mandates, stating that they will drive jobs abroad.

He also condemned the Bush administration's post September 11, 2001, restrictions on immigration. He expressed hope that the U.S. will now be more welcoming to innovators, entrepreneurs and students.

He also condemned the proliferation of innovation inhibiting intellectual property based litigation.

Trade group officials tend to have well developed understandings and opinions regarding laws and policies. However, they rarely disclose these in public with the frankness demonstrated in this speech.

Shapiro conceded that "I am taking an unusual tack for an association executive."

The CEA is a trade group with over 2,200 companies as members. These include developers, makers and distributors of a wide range of consumer electronics products. The membership also includes many companies whose primary activities are phone service, cable service, VOIP service, software, retail stores, online retailing, and online services.

Trade Protectionism. The CEA states in its web site that "High tech is America's largest export sector ($220 billion), making up 21 percent of total U.S. exported goods in 2006." (Parentheses in original.)

Shapiro said in his February 17 speech that "we have been successful innovators and creators because we have been leaders in trade and in IP protection. We have opened our borders and traded freely with other nations. This has allowed us to export our innovations and our content and stand up in a principled way to those who sought local content restrictions."

He continued that "free trade is under attack as agreements that would create U.S. jobs are left to languish."

He did not elaborate on specific free trade agreements (FTAs). However, after Democrats gained control of the House in the 2006 elections, the Congress all but stopped approving FTAs. In particular, the Congress did not approve concluded FTAs with Korea, Columbia, and Panama. The U.S. has yet to negotiate mutually beneficial FTAs with Taiwan, Indonesia, and other trade partners.

"Worse", said Shapiro, "in the stimulus package we saw Buy America provisions enacted into law which ironically hurt the American companies they seek to protect."

HR 1, at Division A, Title XVI, Section 1605, provides that "None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of' a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States."

Shapiro expressed relief that HR 1 did not also require "that medical IT exclusively use American companies. These same American companies will tell you that they are almost certain to win any fair competitive process. Yet, insisting that such competitions be limited to American companies would have encouraged other countries to impose similar requirements in their software procurements -- thus blocking American companies from competing."

He concluded that "the protectionist provisions which remained in the stimulus package are precisely the Smoot-Hawley type of efforts that led to the Great Depression."

Unionization Mandates. He said that "we have been successful because we rely on a marketplace which rewards successful innovators. Until recently, it was considered good to be a successful entrepreneur. The distaste for Wall Street excess is quickly creeping over to other areas and risk-taking entrepreneurs are being punished. Anyone can be an entrepreneur, an innovator or creator and we should not begrudge those who succeed in the free market."

He added that "risk takers create jobs and innovation flourishes if risk takers can ramp up and ramp down quickly."

"Recent proposals by unions to allow sudden unionization without a private ballot and then have government arbitrators set work conditions threaten the ability of any business to innovate. More, such unwise proposals could perversely provide an incentive for companies to move jobs overseas", said Shapiro.

The Congress has not yet enacted this proposal.

Shapiro continued, "And sadly recent executive orders barring government contractors from discouraging unionization and requiring that government projects use only union workers not only adds costs but discourages entrepreneurial companies from selling to the government."

He did not elaborate. However, on January 30, 2009, Obama signed an executive order titled "Economy in Government Contracting". It disallows disbursements to federal contractors if they communicate with their employees about their views during a labor organizing drive. Shapiro did not note this order's limitation of First Amendment rights.

IT Litigation. Shapiro also addressed policy issues that predate the Obama administration, including litigation. He said that "We have maintained a strong system of intellectual property rights and have rigorously opposed commercial piracy. And although we have our differences on private copying, these are differences at the fringe as we have all learned that we need each other and that new technologies can be embraced for profit."

But, he argued that "Huge penalties on innovations based on speculation of infringement have restricted product introductions and decimated startup companies."

Immigration Policy. He called for changes in Bush era immigration policy. "Sadly, after September 11 we flipped a switch and discouraged immigration", including by people who would "have studied or created in America".

So, "other nations welcome these students, entrepreneurs and engineers. Our reputation for unfriendliness creates an impression of xenophobia and increasingly repels the best and the brightest."

Shapiro said that this "is harmful to our future."

He continued that "I am also hopeful that the Obama Administration reverses course and affirmatively tries to attract the best and brightest. Even if we start modestly, just at the University level, we are creating ambassadors of goodwill when they leave. But if we are strategic, we will not insist they leave when they get their degree, but encourage them to stay. More, if we care about our competitiveness we will expand the H1B visa program and get the highly skilled talent here rather than forcing our companies to locate their facilities elsewhere in the world."

Deficit Spending Bill. Shapiro complained that the US is "racking up over $800 billion" in debt with HR 1, and spending "trillions bailing out companies that made poor decisions".

He added that war spending adds to the national debt. He also warned that while the interest rates at which the government borrows are now low, "Sometime soon, those that we owe money to are going to look elsewhere or insist on higher interest rates."

"Our generation will be noted for two things. We are the generation that embraced digital technology, not only the cell phone, the HDTV and digital music, but the Internet and all the glory and richness it provides. But we also will be forever known as the generation which saddled our children with a debt which will take generations to pay. The irresponsibility and the lack of discussion are breathtaking."

He concluded that "we are in a recession and people are losing their jobs and every inclination is to do something. But we are also in a free market system which has a business cycle. In the late 70s we had gas rationing, double digit employment and interest rates approaching 20 percent. We survived without panicking. By comparison, today we are on path to increase public debt by some 3 trillion dollars in the next 3 years alone -- more than we added in the 50 years from 1940 to 1990."

News Media. Shapiro then laid much blame upon the news media for their failure in reporting on HR 1.

He criticized CNN for giving its platform to "xenophobic and protectionist Lou Dobbs".

He also asked, "as we add trillions of dollars of debt where is the media scrutiny?"

He noted that while proponents of HR 1 label argued that it is a "stimulus" to the economy, "many economists disagreed and argued that there is little or no evidence that government spending can make a difference before the business cycle turns".

He asked, "Has the media been so decimated by the economy and new media that thoughtful analysis of these immense proposals is off the table? And where was the outcry over this shift from immediate stimulus and job creation to massive government employment and industrial policy?"

And, "Where were the news stories when the Congressional Budget office recently reported that the stimulus package would have no positive impact on the economy? Has the media simply lost interest in anything but the battle? Have the facts and substantive issues become irrelevant?"

He concluded that the new media "has failed us recently".

"If our ancestors were as passive as our citizens and press today, we would all still be sipping tea and paying for it in pound notes", said Shapiro.

AT&T Fined $8 Million for E-Rate Practices

2/13. The Department of Justice (DOJ) announced in a release that AT&T Technical Services Corp. (AT&T-TSCO) will pay a fine of $8,266,414.33 in connection with alleged illegal conduct associated with the Federal Communications Commission's (FCC) fraud plagued e-rate tax and subsidy program.

The DOJ alleged that AT&T-TSCO "engaged in non-competitive bidding practices for E-rate contracts", "claimed and received E-rate funds for goods and services that were ineligible for the program's discounts", and "overbilled the E-Rate program".

Under the e-rate program telecommunications users are taxed to subsidize telecommunications services, internet access, and internal wiring at schools and libraries. The program, which is perpetual, was created in a decade ago as a temporary program to connect schools and libraries to the internet.

In This Issue

This issue contains the following items:
  Obama Signs Spending Bill
  CEA Chief Criticizes Spending Bill, Protectionism, Unionization Mandates, and Anti-Immigration Policy
  AT&T Fined $8 Million for E-Rate Practices
  Software Counterfeiters Indicted

Washington Tech Calendar
New items are highlighted in red.
Tuesday, February 17

The House will not meet the week of February 16-20.

The Senate will not meet the week of February 16-20.

POSTPONED. Deadline for full power television stations to cease analog broadcasting. See, S 352 [LOC | WW], the "DTV Delay Act".

8:30 AM - 4:45 PM. The U.S.-China Economic and Security Review Commission will hold a meeting titled "China's Role in the Origins of and Response to the Global Recession". See, notice in the Federal Register, January 13, 2009, Vol. 74, No. 8, at Page 1768. Location: Room 562, Dirksen Building, Capitol Hill.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Globalstar v. FCC, App. Ct. No. 08-1046. This is a petition for review of an FCC order regarding Big LEO spectrum. See, FCC brief [67 pages in PDF]. Judges Sentelle, Garland and Edwards will preside. Location: 333 Constitution Ave., NW.

10:00 AM. Deadline for all commenters, except foreign governments, to submit comments to the Office of the U.S. Trade Representative (OUSTR) regarding countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. These comments assist the OUSTR in fulfilling its obligations under Section 182 of the Trade Act Act of 1974. See, notice in the Federal Register, January 23, 2009, Vol. 74, No. 14, Page 4263-4264.

12:30 - 1:30 PM. The Federal Communications Bar Association's (FCBA) State and Local Practice Committee will host a brown bag lunch titled "Collaboration between States, Federal Government and Industry on Uniform Outage Reporting for Carriers". The speaker will be Tom Goode, General Counsel of the Alliance for Telecommunications Industry Solutions (ATIS). See, notice and registration page. Location: Renaissance Hotel, Meeting Room 3, 999 9th St., NW.

1:00 - 3:00 PM. The Federal Communications Commission's (FCC) World Radiocommunications Conference (WRC-11) Advisory Committee's Informal Working Group 2: Terrestrial Services will meet. See, notice and FCC's WRC-11 web site. Location: FCC, South Conference Room, 2nd floor, Room 2-B516, 445 12th St., SW.

3:00 - 5:00 PM. The Federal Communications Commission's (FCC) World Radiocommunications Conference (WRC-11) Advisory Committee's Informal Working Group 3: Space Services will meet. See, notice and FCC's WRC-11 web site. Location: FCC, South Conference Room, 2nd floor, Room 2-B516, 445 12th St., SW.

5:00 PM. Deadline to submit applications to the National Institute of Standards and Technology (NIST) for participation in its 2009 SURF grant programs. These are the NIST's Gaithersburg Summer Undergraduate Research Fellowship Program, and Boulder Summer Undergraduate Research Fellowship Program. The NIST distributes grants for, among other topics, electronics and electrical engineering, and information technology. See, notice in the Federal Register, December 30, 2008, Vol. 73, No. 250, at Pages 79817-79822.

Wednesday, February 18

10:00 AM - 12:00 NOON. The Federal Communications Commission's (FCC) World Radiocommunications Conference (WRC-11) Advisory Committee's Informal Working Group 1: Maritime, Aeronautical and Radar Services will meet. See, notice and FCC's WRC-11 web site. Location: 1800 North Kent St., Suite 1060, RTCM, Rosslyn, VA.

12:15 - 1:45 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch titled "Transitions -- How to Successfully Navigate a Move into a New Position". The scheduled speakers include Marcia Shannon (Shannon & Manch), Dan Binstock (BCG Attorney Search), Peter Shields (Wiley Rein), Laura Rychak (Cox Enterprises), and Anna Gomez. RSVP to Christy Hammond at chammond at wileyrein dot com. For more information or to submit anonymous questions for the speakers, contact Cathy Hilke at chilke at wileyrein dot com or Christina Langlois at clanglois at nualumni dot com. Location: Wiley Rein, 5th floor, 1750 K St., NW.

6:00 - 8:15 PM. The Federal Communications Bar Association (FCBA) will host an event titled "Investing in Foreign Telecoms Markets: Challenges and Opportunities". See, notice and registration page. The price to attend varies. Location: Bingham McCutchen, 11th floor, 2020 K St., NW.

Thursday, February 19

10:30 AM - 12:00 NOON. The Heritage Foundation will host an event titled "Taiwan: Ideal Candidate for Free Trade Agreement". The speakers will be Chris Padilla, Rupert Hammond-Chambers (U.S.-Taiwan Business Council), and Walter Lohman (Heritage). Location: Heritage, 214 Massachusetts Ave., NE.

11:00 - 2:00 PM. George Washington University's (GWU) law school's IP Speaker Series will host a lecture by Greg Vetter. See, notice. Location: Faculty Conference Center (B505), GWU law school.

12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Practice Committee will host a lunch titled "How can telecommunications technologies, specifically wireless technologies, lead the green revolution?". Location: Sidley Austin, 6th floor, 1501 K St., NW.

Friday, February 20

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Ad Hoc Telecommunications Users Committee v. FCC, App. Ct. No. 07-1426. This is a petition for review of an FCC forbearance decision. See, FCC brief [84 pages in PDF]. Judges Sentelle, Kavanaugh and Edwards will preside. Location: 333 Constitution Ave., NW.

12:15 - 1:45 PM. The New America Foundation (NAF) will host discussion of the book [Amazon] titled "Viral Spiral: How the Commons Built a Digital Republic of Their Own". The speakers will be David Bollier (author), Sascha Meinrath (NAF), and Michael Calabrese (NAF). See, notice and registration page. Location: NAF, 7th floor, 1630 Connecticut Ave., NW.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) regarding the Rural Cellular Association's (RCA) May 20, 2008, petition for rulemaking [25 pages in PDF] regarding "the widespread use and anticompetitive effects of exclusivity arrangements between commercial wireless carriers and handset manufacturers" and "rules that prohibit such arrangements". See, notice in the Federal Register, October 23, 2008, Vol. 73, No. 206, at Pages 63127-63128. This proceeding is RM No. 11497. See, FCC notice of extension [PDF], and notice of extension in the Federal Register, December 12, 2008, Vol. 73, No. 240, at Pages 75629-75630.

Deadline to submit comments to the National Science Foundation's (NSF) National Coordination Office for Networking Information Technology Research and Development (NCO/NITRD) that contain "promising game-changing ideas with the potential to reduce vulnerabilities to cyber exploitations by altering the cybersecurity landscape". See, notice in the Federal Register, December 30, 2008, Vol. 73, No. 250, at Pages 79919-79921.

Monday, February 23

The House will return from its one week recess.

10:00 AM - 12:00 NOON. The Federal Communications Commission's (FCC) World Radiocommunications Conference (WRC-11) Advisory Committee's Informal Working Group 4: Regulatory Issues will meet. See, notice and FCC's WRC-11 web site. Location: FCC, North Conference Room, 6th floor, Rooms 6-B112 and 6-B142, 445 12th St., SW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding the October 8, 2008, Petition for Rulemaking [18 pages in PDF] submitted by the CTIA regarding transitioning certain cellular licensing rules to a geographic market area based licensing system. See, FCC's Public Notice numbered DA 09-5, and notice in the Federal Register, January 22, 2009, Vol. 74, No. 13, at Pages 4036-4037. This proceeding is RM No. 11510.

Tuesday, February 24

9:00 AM - 5:00 PM. The Federal Communications Bar Association (FCBA) will host an event titled "The Communications Act and the FCC at 75 Seminar". Prices vary. See, registration page. Location: Wiley Rein, 1776 K St., NW.

10:00 AM. The Senate Banking Committee (SBC) will hold a hearing to receive the Federal Reserve Board's (FRB) Semiannual Monetary Policy Report to the Congress. The witness will be Ben Bernanke, FRB Chairman. See, notice. Location: Room 216, Hart Building.

11:00 AM. The Supreme Court will hear oral argument in Carlsbad Technology v. HIF Bio, Sup. Ct. No. 07-1437, a petition for writ of certiorari to the U.S. Court of Appeals (FedCir), App. Ct. No. 2006-1522. See, Supreme Court docket and question presented. Location: Supreme Court, 1 First St., NW.

12:00 NOON - 2:00 PM. The DC Bar Association and the DC Chapter of the Copyright Society will host a closed event titled "The Copyright Office Speaks". The speaker will be Marybeth Peters, Register of Copyright. See, notice. Prices vary from $55 to $65. For more information, call 202-626-3488. Location: City Club of Washington, 1300 I St., NW.

2:30 PM. The Senate Judiciary Committee's (SJC) Subcommittee on Antitrust, Competition Policy and Consumer Rights will hold a hearing titled "The Ticketmaster/Live Nation Merger: What Does it Mean for Consumers and the Future of the Concert Business?". The SJC will webcast this event. See, notice. Location: Room 226, Dirksen Building.

6:00 - 7:00 PM. The DC Bar Association will host an event titled "Kauffman Foundation Distinguished Lecture in Antitrust, Entrepreneurship & Innovation". See, notice. For more information, call Jennifer Dabson at 202-274-4077. Location: American University law school, 6th floor, 4801 Massachusetts Ave., NW.

Software Counterfeiters Indicted

1/30. The U.S. District Court (DAriz) unsealed a 19 count indictment that charges Christopher Loring Walters, a fugitive, and Matthew Thomas Purse with conspiracy, mail and wire fraud, criminal copyright infringement, and trafficking in counterfeit labels, packaging or containers in connection with their sale of counterfeit software via eBay.

The Office of the U.S. Attorney for the District of Arizona (USAO) stated in a release that this is "one of the largest counterfeiting schemes of this type to date nationwide".

The USAO stated that "from September 2004 through February 2006, Walters and Purse created various eBay merchant accounts and other commercial Web sites from which to sell and distribute greatly discounted counterfeit software".

The USAO continued that "Walters and Purse established bank accounts and credit card processing accounts with various financial institutions in order to process victim credit card purchases. They purchased or obtained legitimate versions of copyrighted software from which to create their stock of counterfeit software. They then acquired software duplicating equipment to mass produce and label counterfeit copies cloned from legitimate brand name software. The packaging, branding, and marking of the counterfeit software by the pair was done in the manner similar to how it was marketed and labeled by the actual victim-entity software companies. They then used the U.S. mail and other private commercial carriers to distribute the counterfeit software to victim-consumers across the U.S. and Canada."

The USAO added that the investigation was assisted by the Software & Information Industry Association (SIIA). See also, SIIA release [PDF].

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