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December 21, 2010, 8:00 AM, Alert No. 2,185.
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FCC to Adopt BIAS Rules

12/20. The Federal Communications Commission (FCC) is scheduled to hold meeting of Commissioners on Tuesday, December 21, 2010, at which it will adopt, but not release, a Report and Order (R&O) regarding FCC regulation of broadband internet access service (BIAS).

The FCC has not released the R&O. Nor has it released the rules to be included in the R&O. It may release the rules, but not the R&O, at the December 21 event.

The vote is likely to break down along partisan lines. Democrats Julius Genachowski, Michael Copps, and Mignon Clyburn will vote for, or concur in, the R&O. Republicans Robert McDowell and Meredith Baker will vote against the R&O.

Various affected parties may then seek to have the Court of Appeals vacate the rules on the grounds that the FCC lacks statutory authority to do so. The legal reasoning for doing so would be very similar to the legal reasoning of the U.S. Court of Appeals (DCCir) in Comcast v. FCC.

See, April 6, 2010, opinion [36 pages in PDF], and story titled "Court of Appeals Vacates FCC's Comcast Order", and related stories, in TLJ Daily E-Mail Alert No. 2,072, April 7, 2010.

Also, Representatives and Senators may seek to undo these rules by legislation. For example, an appropriations bill could simply deprive the FCC of funds to implement or enforce these rules.

Commissioner Copps, who favors more regulatory mandates than are embodied in the putative rules, wrote in a statement released on December 20 that "I will not block it by voting against it".

Commissioner Clyburn stated in a release on December 20 that "I plan to vote to approve in part and concur in part".

Commission Copps stated that "The item we will vote on tomorrow is not the one I would have crafted. But I believe we have been able to make the current iteration better than what was originally circulated. If vigilantly and vigorously implemented by the Commission -- and if upheld by the courts -- it could represent an important milestone in the ongoing struggle to safeguard the awesome opportunity-creating power of the open Internet. While I cannot vote wholeheartedly to approve the item, I will not block it by voting against it. I instead plan to concur so that we may move forward."

He also stated that "These past three weeks have been devoted on my part to intensive discussions about ensuring the continued openness of the Internet and putting consumers, not Big Phone and Big Cable, in maximum control of their online experiences. I have been fighting for nearly a decade to make sure the Internet doesn't travel down the same road of special interest consolidation and gate-keeper control that other media and telecommunications industries -- radio, television, film and cable -- have traveled."

Commissioner Clyburn wrote in her statement that "The open Internet is a crucial American marketplace, and I believe that it is appropriate for the FCC to safeguard it by adopting an Order that will establish clear rules to protect consumers’ access."

She added that "while not as strong as they could be, will nonetheless protect consumers as they explore, learn, and innovate online. As such, I plan to vote to approve in part and concur in part the Open Internet Order during the FCC’s open meeting tomorrow."

Gigi Sohn, head of the Public Knowledge, and a proponent of reclassification of BIAS as a Title II service, stated in a release that "Instead of strong, firm rules providing clear protections, the Commission, created a vague and shifting landscape open to interpretation." She also complained about the putative rules' less regulatory treatment of wireless BIAS.

She also stated that "That the FCC has left the door open for paid prioritization is distressing ... The notion that a deep-pocketed company, through paid prioritization, could pay to have its service moved ahead in the queue or transmitted faster than another is deeply troubling in a medium founded on the idea that everyone has a chance to reach someone else without interference from the carrier in the middle."

In contrast, Randy May, head of the Free State Foundation (FSF), called the putative rules an "unnecessary step to regulate the Internet". He added that "The Commission is acting on dubious legal authority, in the face of widespread, bipartisan opposition, to adopt a new Internet regulatory regime to ``fix´´ a problem that doesn't exist."

Obama Addresses Export Control Reform Process

12/16. President Obama gave a speech on December 9, 2010, at a meeting of the President's Export Council (PEC), in which discussed several trade related topics, including changes to the US export regulation regime.

Summary. He stated that the regulations are a "maze" and "onerous" and that they are being reformed. He also announced several items that are a part of an ongoing reform process.

The President announced several incremental developments in his efforts to reform the export control regime, which has long been divided, complex, and harmful to U.S. companies' ability to compete abroad. The regime regulates exports, not only of military items, but also of software and computers, on the basis that these are dual use items, with both commercial and military applications.

On December 9, 2010, President Obama announced the launch of an informational web page. He also announced several rulemakings. And, the government departments that regulate exports released notices of proposed changes to their rules.

Two advance notice of proposed rulemakings (ANPRMS) address making the rules more clear. One Department of Commerce (DOC) NPRM would create a new license exception that would allow exports of controlled items to countries that are members of all four multilateral export control regimes or other regime members that also are members of NATO. See also, White House news office release.

The President announced no legislative proposals, although that will ultimately be necessary. That would come later in the President's reform process.

President Obama also expressed his hope that exports will double in five years.

The goals, or holy grail, of this process include (1) producing a single, tiered, comprehensible, positive list, (2) using a single information technology (IT) system, and (3) having a single licensing agency.

President Obama announced plans to reform the export control process in August of 2009. In October of 2009, Secretary of Commerce Gary Locke stated that "reforming the current system is a high priority for the Obama administration". He also said that "Fundamental reform will likely require new statutory authority and action from Congress." See, October 21, 2009, speech and story titled "Locke Addresses Reforming the Export Control System" in TLJ Daily E-Mail Alert No. 2,001, October 12, 2009.

In April of 2010, the President and others outlined a reform strategy. See, White House news office release of April 20, 2010. He again spoke on the reform process in August of this year. See, White House news office release of August 30, 2010, and Obama's speech of August 30, 2010.

John Engler, head of the National Association of Manufacturers (NAM), stated in a release that "Manufacturers are pleased the Administration listened to the business community and is moving forward with the most sweeping export control reform in the last 50 years."

Obama's December 9 Speech. President Obama stated in his December 9 speech that "we've also been working to reform our export control system with high-tech companies ... so that American firms that make products with national security implications can stay competitive even as we better protect our national security interests."

He announced that "we're publishing a first set of guidelines for what products should be controlled going forward, and the licensing policies that will apply to them".

"Typically", the President explained, "all businesses that export have to go through a maze of different lists, different formats, from different departments, to make sure they're not selling their products somewhere or to someone that they shouldn’t be. As important as that is, the process is repetitive, it's redundant, and particularly onerous for small businesses without the means to navigate it all."

He said that "we're changing that. Effective today, businesses can, for the very first time, go to and download one consolidated list of entities that have special export requirements."

Regulatory Background. Two departments regulate exports. The Department of State's (DOS) Directorate of Defense Trade Controls (DDTC) administers the International Traffic in Arms Regulations (ITAR). The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) administers the Commerce Control List (CCL) among other things.

The DOC/BIS regulates dual use items, including things such as software, computers, and encryption products that may also have military uses.

The statute that the DOC/BIS regulations implement is the Export Administration Act of 1979, which was drafted with reference to the cold war between the US and Soviet Union. It expired in 2001.

However, another statute gives authority to implement it, provided the President issues an emergency order every year. Presidents Obama and Bush have routinely issued these orders. See for example, story titled "Obama Issues Routine Annual Emergency Declaration to Continue Export Regulation Regime" in TLJ Daily E-Mail Alert No. 2,125, August 18, 2010.

The Congress was working on export control legislation a decade ago. Bills were drafted, debated, and amended. But, the House and Senate substantially dropped these efforts after September 11, 2001.

NPRMs. On December 10, the DOS/DDTC published a notice in the Federal Register that announces, describes, and sets the comment deadline for its "advance notice of proposed rulemaking" (ANPRM) regarding revisions to the United States Munitions List (USML). The deadline to submit comments is February 8, 2011. See, Federal Register, December 10, 2010, Vol. 75, No. 237, at Pages 76935-76940.

This notice states that this ANPRM does not seek "input on whether particular defense articles should or should not be controlled on the USML or whether any defense articles should be controlled differently. Rather, it is only seeking with this ANPRM input on how the USML can be revised so that it clearly describes what is subject to the jurisdiction of the International Traffic in Arms Regulations (ITAR), how defense articles are identified by tier, and what current defense articles do not fall within the scope of any of the tiers."

On December 9, the DOC/BIS published a notice in the Federal Register that announces, describes, and sets the comment deadline for its ANPRM regarding revisions to its rules to make the descriptions of items controlled on the CCL more clear, positive, and tiered. The deadline to submit comments is February 7, 2011. See, Federal Register, December 9, 2010, Vol. 75, No. 236, at Pages 76664-76666.

Also on December 9, the DOC/BIS published a second notice in the Federal Register that announces, describes, and sets the comment deadline for its NPRM regarding creating a new license exception to the EAR "to allow exports, reexports and transfers (in-country) of specified items to destinations that pose little risk of unauthorized use of those items. To provide assurance against diversion to unauthorized destinations, transactions under this license exception would be subject to notification, destination control statement and consignee statement  requirements." The deadline to submit comments is February 7, 2011. See, Federal Register, December 9, 2010, Vol. 75, No. 236, at Pages 76653-76664.

Congressional Activity. Rep. Howard Berman (D-CA), the Chairman of the House Foreign Affairs Committee, stated in a release that "The President's export control reform initiative is making progress in meeting the goals of better protecting national security while strengthening America’s high technology sector and promoting job growth through increased exports."

Rep. Howard BermanRep. Berman (at left) continued that "I have advanced through the House significant improvements in the Arms Export Control Act, incorporated in H.R. 2410, the Foreign Relations Authorization Act, to rationalize control policy for commercial satellites, streamline and establish benchmarks for license processing, expedite license processing for transfers to our closest allies and revamp Congressional oversight of licensing."

The House passed HR 2410 [LOC | WW] on June 9, 2009, by a vote of 235-187. See, Roll Call No. 328. It was a nearly straight party line vote. Only seven Republicans vote for the bill. Neither the Senate Foreign Relations Committee, nor the full Senate, have passed this bill.

Rep. Berman added that "In addition, major progress has been made in drafting and building support in Congress for a complete modernization of the Export Administration Act, to provide a flexible authority to the President, refocus the system on counteracting today’s and tomorrow's threats and break new ground by defining national security to include both control requirements and U.S. scientific and technological leadership."

He wrote that "In the upcoming 112th Congress, these legislative initiatives should remain priorities with incoming House Republican leadership. The modernization of our export control systems is essential both to protect national security and foster U.S. technological leadership for U.S. economic growth."

GAO Findings. On December 16, 2010, the Government Accountability Office (GAO) release a letter [25 pages in PDF] to Sen. Jon Kyl (R-AZ) and Sen. Russ Feingold (D-WI) regarding "Export Controls: Agency Actions and Proposed Reform Initiatives May Address Previously Identified Weaknesses, but Challenges Remain". (It is dated November 16, 2010.)

This letter concludes that "The export control reform framework -- as proposed -- has the potential to address weaknesses in the U.S. export control system related to control lists, licensing, enforcement, and information technology, including areas where agencies have not addressed prior findings."

"However, for a few areas, such as developing measures of effectiveness for the arms export control system, agencies have not addressed some of our prior findings and the reform framework does not contain specific initiatives to address them."

In This Issue
This issue contains the following items:
 • FCC to Adopt BIAS Rules
 • Obama Addresses Export Control Reform Process
 • Rep. Smith Announces Reorganization of House Judiciary Committee
Washington Tech Calendar
New items are highlighted in red.
Tuesday, December 21

The House will meet at 10:00 AM for legislative business. The House may take up HR 5116 [LOC | WW], the "America COMPETES Reauthorization Act of 2010", and/or HR 3082 [LOC | WW], an omnibus appropriations bill, with technology related provisions. See, Rep. Hoyer's schedule for December 21.

The Senate will meet at 9:30 AM. It may consider HR 3082 [LOC | WW], an omnibus appropriations bill, with technology related provisions.

10:30 AM. The Federal Communications Commission (FCC) will hold an event titled "open meeting". The agenda [PDF] includes adoption of two items: broadband internet access service (BIAS) rules and a 911 notice of inquiry (NOI). See, story titled "FCC Releases Agenda for December 21 Meeting" in TLJ Daily E-Mail Alert No. 2,179, December 15, 2010. The FCC will webcast this event. Location: FCC, Commission Meeting Room, 445 12th St., SW.

RESCHEDULED FOR JANUARY 27. 12:00 NOON - 2:00 PM. The DC Bar Association will host an event titled "False Patent Marking: Now What?". The speakers will be Elizabeth Winston (Catholic University law school), Robert Shaffer (Finnegan), Maureen Browne (Covington & Burling). See, 35 U.S.C. § 292, regarding false marking. See also, the December 28, 2009, opinion [16 pages in PDF] of the U.S. Court of Appeals (FedCir) in The Forest Group, Inc. v. Bon Tool Company construing Section 292. See also, HR 4954 [LOC | WW], an untitled bill, and HR 6352 [LOC | WW], the "Patent Lawsuit Reform Act of 2010"; both would amend Section 292; the House has passed neither. And see, story titled "Representatives Introduce Bill to Amend Patent Act Regarding Remedies for False Markings" in TLJ Daily E-Mail Alert No. 2,067, March 30, 2010. The price to attend ranges from $40 to $55. For more information, contact 202-626-3463. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

Wednesday, December 22

No events listed.

Thursday, December 23

No events listed.

Friday, December 24

Christmas Day (observed). This is a federal holiday. See, Office of Personnel Management's (OPM) web page titled "2010 Federal Holidays".

Monday, December 27

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding regulating the billing and notice practices of mobile service providers. The FCC adopted and released this NPRM on October 14, 2010. It is FCC 10-180 in CG Docket Nos. 10-207 and 09-158. See, notice in the Federal Register, November 26, 2010, Vol. 75, No. 227, at Pages 72773-72777. See also, story titled "FCC Adopts Bill Shock NPRM" in TLJ Daily E-Mail Alert No. 2,142, October 19, 2010.

Deadline to submit comments to the Copyright Office (CO) in response to its notice of proposed rulemaking (NPRM) regarding notices of termination of certain grants of transfers and licenses of copyright under 17 U.S.C. § 203. See, notice in the Federal Register, November 26, 2010, Vol. 75, No. 227, at Pages 72771-72773.

Deadline to submit comments to the Department of Transportation's (DOT) Intelligent Transportation Systems Program Advisory Committee (ITSPAC) in advance of its meeting on January 6-7, 2011, in Oakland, California. See, notice in the Federal Register, December 14, 2010, Vol. 75, No. 239, at  Page 77955.

Tuesday, December 28

No events listed.

Rep. Smith Announces Reorganization of House Judiciary Committee

12/20. Rep. Lamar Smith (R-TX), who will be the Chairman of the House Judiciary Committee (HJC) in the 112th Congress, announced a reorganization of the subcommittees of the HJC. However, he has yet to announce the subcommittee chairmen. See, release.

Rep. Lamar SmithRep. Smith (at right) stated that "I plan to focus on efforts to strengthen national security, protect intellectual property, prevent frivolous lawsuits and keep children safe from Internet sex predators. Much of that work will begin in the subcommittees".

There will be an intellectual property (IP) subcommittee in the 112th Congress. There is currently no IP subcommittee. It might also be noted that neither the House, nor the HJC, passed HR 1260 [LOC | WW], the "Patent Reform Act of 2009", or any other patent reform bill in the 111th Congress.

Moreover, the most significant copyright bill to be passed by the 111th Congress was the S 3689 [LOC | WW], the non-controversial "Copyright Cleanup, Clarification, and Corrections Act of 2010". See, story titled "Obama Signs Copyright Cleanup Bill" in TLJ Daily E-Mail Alert No. 2,176, December 12, 2010.

Rep. Smith stated that "One important change is the creation of a new intellectual property subcommittee. The protection of America's intellectual property is critical to our economic growth, job creation and ability to compete in the global marketplace. A separate IP subcommittee will ensure that the Committee remains focused on all aspects of intellectual property, including patent reform and copyright protections".

The HJC and its recreated Subcommittee may resume IP related legislative activity. Possible legislation includes a broad patent reform bill, narrow patent bills that target subjects such as false patent markings, and a performance rights bill.

The Subcommittee may also consider legislation to expand the Department of Justice's (DOJ) authority to seize domain names of web sites dedicated to infringing activity, and to obtain injunctive relief against financial entities and other intermediaries. See for example, S 3804 [LOC | WW], the "Combating Online Infringement and Counterfeits Act", and story titled "Senate Judiciary Committee Approves Domain Name Seizure Bill" in TLJ Daily E-Mail Alert No. 2,158, November 17, 2010.

Also, this new subcommittee, titled the "Subcommittee on Intellectual Property, Competition, and the Internet", will also handle competition law matters, and oversight of the antitrust activities of the Federal Trade Commission (FTC) and Department of Justice's (DOJ) Antitrust Division. Currently, there is a "Subcommittee on Courts and Competition Policy".

Increasingly, the new and complex issues and cases faced by antitrust regulators and the courts involve intellectual property based companies, and IP related issues such as licensing and standards setting.

In the 112th Congress bills and oversight pertaining to the federal judiciary will be handled by the "Subcommittee on Courts, Commercial and Administrative Law". In the past, the court and IP functions were combined in one subcommittee.

The title and responsibilities of the "Subcommittee on Crime, Terrorism, and Homeland Security" will remain unchanged.

The immigration subcommittee will get a new title, reflecting the policy goals of Rep. Smith and others in enforcement. The current title is "Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law". In the 112th Congress it will be the "Subcommittee on Immigration Policy and Enforcement".

The current "Subcommittee on the Constitution, Civil Rights, and Civil Liberties" will be renamed "Subcommittee on the Constitution".

This subcommittee's responsibilities will include tort reform, which is a priority for Rep. Smith and other Republicans, but not for the Democrats on the HJC. The Democratic on the HJC who has worked most with Republicans on tort reform in the last decade is Rep. Rick Boucher (D-VA). He lost in the November 2 election.

Rep. Smith's release is not clear on the point that this Subcommittee will continue to oversee the DOJ's Civil Rights Division. This Division handles numerous non-technology related matters of interest to HJC members, such as voting rights. However, this Division is also currently involved in expanding the scope of the Americans with Disabilities Act (ADA) by regulation to reach the design of new information technologies.

Rep. Smith's announcement is also not clear as to whether the Subcommittee on Crime or the Subcommittee on the Constitution will handle extending the sunsets on expiring provisions of the Foreign Intelligence Surveillance Act (FISA), reforming the Electronic Communications Privacy Act (ECPA), and revising the Espionage Act (EA) to address activities of entities such as WikiLeaks.

See also, stories titled "Republicans Assigned to House Judiciary Committee" in TLJ Daily E-Mail Alert No. 2,182, December 18, 2010, and "Rep. Lamar Smith to Chair House Judiciary Committee" in TLJ Daily E-Mail Alert No. 2,173, December 9, 2010.

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