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February 2, 2010, Alert No. 2,040.
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Antitrust Division's Weiser Addresses Disruptive Entry

1/31. Philip Weiser, a Deputy Assistant Attorney General in the Department of Justice's (DOJ) Antitrust Division, gave a speech at the University of Colorado at Boulder titled "Innovation, Entrepreneurship, and the Information Age".

He focused on the "role of antitrust law in protecting entrepreneurship and disruptive entry", especially in the information and communications technologies sectors. He used as examples of opposition to disruptive entry broadcasters' delaying of the deployment of FM radio technology during the middle of the last century, AT&T's conduct in forestalling use of fiber optic cable, and Microsoft's conduct with respect to the Netscape browser and Java middleware.

He did not identify any companies or sectors that are now interfering with the deployment of disruptive technologies.

He offered an explanation of disruptive technologies. At first, they "rarely threaten legacy business models initially because they start out providing a lower quality version of an established product and serve a small, underserved segment. Over time, however, the quality improvements in the product or service enable the firm deploying the disruptive technology to challenge the incumbent's product or service. That challenge is particularly difficult for the incumbent firm to weather because its willingness to adopt the technology and business model of the upstart would involve cannibalizing itself -- that is, undercutting its own legacy model and eroding already profitable lines of business. Few firms are willing to take that step."

Weiser said that "Antitrust law, unlike classic command-and-control regulation, is the friend of entrepreneurs because it works in service of the free market" and that "Promoting competition and entrepreneurship is an essential component of innovation policy".

Weiser said that antitrust authorities have "dedication, intelligence, and care". He did not concede in this speech that antitrust regulators, like other government officials, are susceptible to error. Although, he said that developing sufficient market intelligence to correctly identify threats to competition is a "challenge".

Nor did he concede that antitrust regulators are vulnerable to capture, political influence, and manipulation, and can be caused to protect the companies that are the most adept at these processes. He asserted that "the Antitrust Division engages in competition policy advocacy that calls out protectionist efforts for what they are."

He also said that entrepreneurship and innovation are strong in the U.S., and listed several factors other than antitrust policy that contribute to this. He listed the "willingness of entrepreneurs and businesses to take risks". He also said that in other parts of the world "the view of failure as a badge of infamy can undermine risk-taking behavior, discourage entrepreneurship, and eliminate a major source of innovation". He also identified the U.S. venture capital system, and "the U.S. system of higher education". Finally, he said the U.S. benefits from its lead in "three industries that are facilitating innovation at a greater pace than ever before: the computer, the mobile phone, and the Internet".

U.S. Tech Groups Complain About PRC's Use of Domestic IP as Trade Barrier

1/26. The Business Software Alliance (BSA), Consumer Electronics Association (CEA), Software and Information Industry Association (SIIA), TechAmerica, Telecommunications Industry Association (TIA), and fourteen other groups sent a letter to U.S. government officials complaining about the People's Republic of China's (PRC) procurement policy described as "indigenous innovation".

The letter is addressed to Hillary Clinton (Secretary of State), Timothy Geithner (Secretary of the Treasury), Eric Holder (Attorney General), Gary Locke (Secretary of Commerce), and Ron Kirk (U.S. Trade Representative).

The letter states that the PRC "has been implementing indigenous innovation policies aimed at carving out markets for national champions and increasing the locally owned and developed intellectual property of innovative products."

In particularl, the complaining groups cite the PRC's giving "preferences for government procurement" for products that "contain intellectual property that is developed and owned in China". They add that "This represents an unprecedented use of domestic intellectual property as a market-access condition and makes it nearly impossible for the products of American companies to qualify unless they are prepared to establish Chinese brands and transfer their research and development of new products to China."

"This directive targets some of our most innovative and competitive manufacturing and service industries, including computers, software, telecommunications and green technology."

The groups continue that "These particular programs are part of a broader set of government policy initiatives covering, for example, patents and standards, competition policy, encryption and tax, the effect of which is creating barriers to competition in the Chinese market for out most innovative companies."

The complaining groups ask U.S. government agencies to "make this issue in particular a strategic priority in your bilateral economic engagement with China". They also ask these agencies to work with businesses and "like-minded foreign governments" in developing a coordinated response to the PRC.

Robert Holleyman, head of the BSA, stated in a release that "With these policies, China is implementing a market-restrictive program which runs counter to the spirit of the free trade commitments made by President Hu. These restrictive procurement policies not only hurt US businesses, but also reduce China's access to innovative, world-class technology. This approach not only harms US and other non-Chinese companies, but will ultimately harm China’s economic development and growth."

Locke Addresses PRC and Trade

1/28. Gary Locke, the Secretary of Commerce, gave a speech in Washington DC regarding U.S. trade with the People's Republic of China (PRC). He said that "a continued theme of my interaction with my Chinese counterparts will be an emphasis on the rule of law within China, including the protection and enforcement of intellectual property rights and the free and full flow of information over the Internet."

He spoke at length about the PRC's indigenous innovation accreditation system. He said that it would "provide domestic firms that use Chinese intellectual property a leg up in bidding on government procurement projects".

"While this practice may have the laudable goal of nurturing a stronger innovation ecosystem in China, it significantly disadvantages U.S. companies -- indeed all foreign companies", said Locke.

He argued that "in the long run it will harm rather than stimulate China's innovation environment by insulating its own companies from the competition that forces constant product and service improvement. Ultimately, that's going to leave the Chinese with less innovative companies and less cutting-edge state-of-the-art technology."

He also said that this "appears to be at odds with assurances the Chinese provided at the 2009 JCCT and S&ED meetings."

The "US-China Joint Commission on Commerce and Trade", or "JCCT", is a long running government to government consultative mechanism in which numerous U.S. agencies participate, including the Department of Commerce and the Office of the U.S. Trade Representative. Intellectual property rights is just one of many issues addressed in this process. "S&ED" is the "Sino-U.S. Strategic and Economic Dialogue" or "U.S.-China Strategic and Economic Dialogue", another consultative mechanism announced in 2009. See, Department of the Treasury (DOT) summary.

Locke also said that "This indigenous innovation issue is one that the Obama administration takes very seriously. The Commerce Department is working with the State Department and the United States Trade Representative's office to press this issue with our Chinese counterparts."

He added that "Working through these many challenges will continue to drive our trade agenda with China in 2010 and beyond."

Locke also referenced Google and internet freedom. See, Google statement and story titled "Google Accuses Red China of Cyber Attacks Directed at Human Rights Activists" in TLJ Daily E-Mail Alert No. 2,036, January 19, 2010.

He said that "recent events, specifically the well-publicized Google incident, have reminded us of the continued challenges faced by foreign and U.S. companies operating in China.

"China needs to continue making strides to be more transparent, predictable and committed to the rule of law", said Locke. "If there is backsliding on these issues, it will affect the appetite of U.S. companies to enter the Chinese market and ultimately that will be bad for both the people of China and the United States."

He also stated that "I will continue to push my Chinese counterparts to take more aggressive steps to protect and enforce intellectual property rights. The United States government continues to have concerns about China’s commitment to robust IPR protections and enforcement, both at the local level and in national policies that give Chinese firms an unfair competitive advantage."

"While the United States and China will not always agree on everything, we know that our economies are inextricably linked, and we must strive to solve any problems through candid open dialogue and mutual respect." He said that exports to the PRC account for about six percent of U.S. exports, but that "There is no greater potential growth market for U.S. exports than China."

OUSTR Continues to Preclude Public Debate of Proposed ACTA

2/2. The Office of the U.S. Trade Representative (OUSTR) issued another uninformative release regarding the negotiation of a multilateral trade agreement titled "Anti-Counterfeiting Trade Agreement".

The OUSTR states in this short release that another round of negotiations were "held in Guadalajara, Mexico, from January 26 to 29, 2010", and that discussions "focused on civil enforcement, border enforcement and enforcement of rights in the digital environment".

This release also asserts that there is a "commitment" to "enhance transparency".

Although, the OUSTR and other governments' trade representatives are proceeding with limited transparency. No drafts of the proposed ACTA are being publicly released or described.

However, certain lawyers and representatives of interested companies and groups, and legislative staff, who sign a non-disclosure agreement, are allowed access to certain documents. This process allows organized interests, including both proponents and opponents of the proposed ACTA, to participate in and influence the process. But, it prevents others from learning about, or participating in, the ongoing process.

Also, this process precludes both substantive news coverage and public debate.

The OUSTR stated vaguely back in April of 2009 that "The ACTA initiative aims to establish international standards for enforcing intellectual property rights in order to fight more efficiently the growing problem of counterfeiting and piracy. In particular, the ACTA is intended to establish, among the signatories, agreed standards for the enforcement of intellectual property rights that address today's challenges by increasing international cooperation, strengthening the framework of practices that contribute to effective enforcement of intellectual property rights, and strengthening relevant enforcement measures." See, OUSTR document [6 pages in PDF] and story titled "OUSTR Releases Summary of Proposed ACTA" in TLJ Daily E-Mail Alert No. 1,925, April 13, 2009.

Sundance Summit and Aspen Forum Scheduled for July and August

2/2. The Technology Policy Institute (TPI) announced that it will host an event titled "TPI Aspen Forum" and "Innovation and Critical Policy Choices: Is the United States Losing its Edge" on August 22-24, 2010, at the St. Regis Hotel, in Aspen, Colorado.

In addition, the Progress & Freedom Foundation (PFF) announced on January 22, 2010, that it will host an event titled "Sundance Summit" and "What's Ahead for the New Digital Decade?", on July 11-13, 2010, in Sundance, Utah. See, conference web site.

The TPI stated in a release that its event will address numerous issues, including the implications of broadband, antitrust, intellectual property, and privacy and data security policy for innovation.

The TPI also stated that this conference will address "Is the U.S. still a worldwide leader in innovation or is it falling behind?" and "Is the U.S. maintaining an economic environment conducive to innovation and entrepreneurship?"

The TPI conference will also address "What challenges and opportunities do China and India pose?".

The PFF stated in its release that its conference will focus on "policy concerning communications, media, intellectual property, privacy, and the Internet".

The PFF previously hosted annual August events titled "Aspen Summit" from 1998 through 2008. See, web pages for 2005, 2006, 2007, and 2008 events.

In This Issue
This issue contains the following items:
 • Antitrust Division's Weiser Addresses Disruptive Entry
 • U.S. Tech Groups Complain About PRC's Use of Domestic IP as Trade Barrier
 • Locke Addresses PRC and Trade
 • OUSTR Continues to Preclude Public Debate of Proposed ACTA
 • Sundance Summit and Aspen Forum Scheduled for July and August
Washington Tech Calendar
New items are highlighted in red.
Tuesday, February 2

The House will meet at 12:30 PM for morning hour debate, and at 2:00 PM for legislative business. The House will consider numerous non-technology related items under suspension of the rules. Votes will be postponed until 6:30 PM. See, Rep. Hoyer's schedule for the week of February 1.

The Senate will meet at 10:00 AM. It will resume consideration of the nomination of Patricia Smith to be Solicitor of the Department of Labor.

8:30 AM - 5:00 PM. Day one of a two day meeting of the National Institute of Standards and Technology's (NIST) Visiting Committee on Advanced Technology (VCAT). See, notice in the Federal Register, January 4, 2010, Vol. 75, No. 1, at Pages 106-107. Location: NIST, Portrait Room, Administration Building, Gaithersburg, MD.

10:00 AM. The Senate Finance Committee (SFC) will hold a hearing on President Obama's Fiscal Year 2011 budget proposal. The witness will be Timothy Geithner (Secretary of the Treasury). See, notice. Location: Room 215, Dirksen Building.

10:00 AM. The Senate Budget Committee (SBC) will hold a hearing on President Obama's FY 2011 budget proposal. The witness will be Peter Orszag, Director of the President's Office of Management and Budget (OMB). Location: Room 608, Dirksen Building.

12:00 NOON - 1:00 PM. The American Bar Association's (ABA) Section of Antitrust Law will host a program titled "December/January In-house Counsel Antitrust Update". The speakers will be Constance Robinson, Peter Boyle, and Svetlana Gans (all of Kilpatrick & Stockton), and Adam Biegel (Alston & Bird). The ABA will teleconference this event. It is free and open to the public. See, notice for registration and call in information.

POSTPONED. 2:30 PM. The Senate Judiciary Committee (SJC) will hold a hearing on pending nominations. The SJC will webcast this event. See, notice. Location: Room 226, Dirksen Building.

Wednesday, February 3

The House will meet at 10:00 AM for legislative business. It will hold several non-technology related postponed suspension votes, and consider two non-technology related bills under suspension of the rules. The House will also consider HR 4061 [LOC | WW], the "Cybersecurity Enhancement Act of 2009". See, Rep. Hoyer's schedule for the week of February 1.

8:30 - 11:30 AM. Day two of a two day meeting of the National Institute of Standards and Technology's (NIST) Visiting Committee on Advanced Technology (VCAT). See, notice in the Federal Register, January 4, 2010, Vol. 75, No. 1, at Pages 106-107. Location: NIST, Portrait Room, Administration Building, Gaithersburg, MD.

9:30 - 11:00 AM. The Information Technology and Innovation Foundation (ITIF) will host a panel discussion titled "The Impact of Offshore Manufacturing on Technology Innovation: Implications for U.S. Policy". The speakers will be Robert Atkinson (ITIF), Erica Fuchs (Carnegie Mellon University), Tom Arrison (National Academies) and Rep. David Wu (D-OR). See, notice. This event is fee and open to the public. Location: Room 2325, Rayburn Building.

10:00 AM. The House Ways and Means Committee (HWMC) will hold a hearing on President Obama's FY 2011 budget proposal. The witness will be Timothy Geithner, Secretary of the Treasury. See, notice. Location: Room 1100, Longworth Building.

10:00 AM. The House Appropriations Committee's (HAC) Subcommittee on Commerce, Justice, State and Related Agencies will hold a hearing titled "Science, Technology, Engineering and Math Education". Location: Room H-309, Capitol Building.

10:30 AM - 5:00 PM. Day one of a two day meeting of the Social Security Administration's (SSA) Future Systems Technology Advisory Panel. See, notice in the Federal Register, January 11, 2010, Vol. 75, No. 6, at Page 1446. Location: Latham Hotel Georgetown, 3000 M St.,  NW.

2:00 PM. The House Ways and Means Committee (HWMC) will hold a hearing on President Obama's FY 2011 budget proposal. The witness will be Peter Orszag, Director of the President's Office of Management and Budget (OMB). See, notice. Location: Room 1100, Longworth Building.

Deadline to submit initial comments on proposals to be designated database administrator in the Federal Communications Commission's (FCC) white space proceeding. See, Public Notice [4 pages in PDF]. It is DA 09-2479 in ET Docket No. 04-186. See also, story titled "FCC Requests Proposals to Be Designated White Spaces Database Administrator" in TLJ Daily E-Mail Alert No. 2,018, November 30, 2009.

Thursday, February 4

The House will meet at 10:00 AM for legislative business. The schedule for the week includes consideration of HR 4061 [LOC | WW], the "Cybersecurity Enhancement Act of 2009". See, Rep. Hoyer's schedule for the week of February 1.

8:30 AM - 12:00 NOON. 10:30 AM - 5:00 PM. Day two of a two day meeting of the Social Security Administration's (SSA) Future Systems Technology Advisory Panel. See, notice in the Federal Register, January 11, 2010, Vol. 75, No. 6, at Page 1446. Location: Latham Hotel Georgetown, 3000 M St., NW.

8:40 AM - 5:00 PM. The Department of Commerce's (DOC) National Telecommunications and Information Administration's (NTIA) Online Safety and Technology Working Group (OSTWG) will meet. The agenda includes presentations and discussions on "online safety and technology, with an emphasis on issues relevant to the work of the subcommittees on data retention and child pornography reporting". See, agenda [PDF] and notice in the Federal Register, January 11, 2010, Vol. 75, No. 6, at Pages 1338-1339. Location: DOC, Hoover Building, Room 4830, 1401 Constitution Ave., NW.

9:00 - 12:00 NOON. The House Intelligence Committee will hold a partially closed hearing titled "Annual Threats Assessment". The witness will be Dennis Blair, Director of National Intelligence. From 11:00 AM - 12:00 NOON the hearing will be closed to the public. Location: Rooms HVC-210 (for open portion of hearing) and HVC-304 (closed portion), Capitol Building.

9:30 AM. The House Commerce Committee's (HCC) Subcommittee on Communications, Technology and the Internet will hold a hearing titled "An Examination Of The Proposed Combination Of Comcast And NBC Universal". See, notice. Location: Room 2123, Rayburn Building.

10:00 AM. The House Appropriations Committee's (HAC) Subcommittee on Commerce, Justice, State and Related Agencies will hold a second hearing titled "Science, Technology, Engineering and Math Education". Location: Room H-309, Capitol Building.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Commercial and Administrative Law will hold a hearing titled "State Taxation -- The Role of Congress in Defining Nexus". The witnesses will include Walter Helerstein (University of Georgia law school) and Bruce Johnson (Utah State Tax Commission). The HJC will webcast this event. See, notice. Location: Room 2141, Rayburn Building.

10:00 AM. The Senate Finance Committee (SFC) will hold a hearing on President Obama's FY 2011 budget proposal. The witness will be Peter Orszag, Director of the President's Office of Management and Budget (OMB). See, notice. Location: Room 215, Dirksen Building.

10:30 AM. The Senate Banking Committee (SBC) will meet in executive session to consider, among other things, the nominations of Kevin Wolf and David Mills (to be Assistant Secretaries of Commerce for Export Enforcement) and Suresh Kumar (to be Assistant Secretary of Commerce and Director General of the U.S. and Foreign Commercial Service). Location: Room 538, Dirksen Building.

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

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing titled "Financial Services and Products: The Role of the Federal Trade Commission in Protecting Consumers". See, notice. Location: Room 253, Russell Building.

5:00 PM. Deadline to submit television and nonbroadcast applications to the National Telecommunications and Information Administration (NTIA) for planning and construction grants for public telecommunications facilities under the Public Telecommunications Facilities Program (PFFP) for FY 2010. This deadline does not apply to applications new FM stations filed during the February 2010 Federal Communications Commission (FCC) FM Window. That deadline is 5:00 PM on February 26, 2010. See, notice in the Federal Register, December 2, 2009, Vol. 74, No. 230, at Pages 63120-63122.

Deadline to submit petitions to participate in the Copyright Royalty Judges' proceeding to adjust the rates for the cable statutory license, and a $150 filing fee. This license is codified at 17 U.S.C. § 111. See, notice in the Federal Register, January 5, 2010, Vol. 75, No. 2, at Pages 455-456.

Friday, February 5

The House will meet at 9:00 AM in pro forma session only. See, Rep. Hoyer's schedule for the week of February 1.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in TruePosition v. Andrew Corp., App. Ct. No. 2009-1389, an appeal from the U.S. District Court (DDel) in a patent infringement case involving wireless location monitoring technology. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM - 12:00 PM. The Heritage Foundation will host a panel discussion titled "The Future of the U.S.-Taiwan Economic Relationship". The speakers will be Rep. Lincoln Diaz-Balart (R-FL), Chao-shiuan Liu (Senior Advisor to the President and former Premier of Taiwan), Rupert Hammond-Chambers (President, U.S.-Taiwan Business Council), Merritt Cooke (GC3 Strategy, Inc.), Vincent Wang (University of Richmond), Derek Scissors (Heritage), and Walter Lohman (Heritage). See, notice. Location: Heritage, 214 Massachusetts Ave., NE.

Monday, February 8

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Public Notice (PN) [3 pages in PDF] requesting comments on the Petition for Reconsideration or Clarification [16 pages in PDF] of the FCC's Declaratory Ruling (DR) regarding cell towers citing requests and 47 U.S.C. § 332(c)(7)(B). The DR is FCC 09-99 in WT Docket No. 08-165. The PN is DA 09-2629 in WT Docket No. 08-165. See also, stories titled "FCC Adopts Declaratory Ruling Regarding State and Local Tower Siting Procedures" in TLJ Daily E-Mail Alert No. 2,017, November 23, 2009, and "State and Local Government Groups Seek Revision of FCC Tower Citing Application Shot Clock" in TLJ Daily E-Mail Alert No. 2,029, December 29, 2009. See also, notice in the Federal Register, January 11, 2010, Vol. 75, No. 6, at Pages 1382-1383.

Tuesday, February 9

7:45 AM. The Atlantic will host an event titled "State of the Union for Technology". The speakers will include Robert Atkinson (Information Technology and Innovation Foundation), Leslie Harris (Center for Democracy and Technology) and Nancy Scola (TechPresident). See, notice. Location: Columbus Club, Union Station, 50 Massachusetts, Ave., NW.

12:15 - 1:45 PM. The New America Foundation (NAF) will host a program titled "Making Media Work Collaboration, Community Building and the Future of Journalism". The speakers will be Tracy Van Slyke and Jessica Clark, co-authors of the book [Amazon] titled "Beyond the Echo Chamber: How a Networked Progressive Media Can Reshape American Politics". See, notice and registration page. Location: NAF, Suite 400, 1899 L St., NW.

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