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Monday, August 15, 2011, Alert No. 2,290.
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Google to Acquire Motorola Mobility

8/15. Google filed a Form 8-K with the Securities and Exchange Commission (SEC) on August 15 that states that "On August 15, 2011, Google Inc. (Google) and Motorola Mobility Holdings, Inc. (Motorola) issued a joint press release announcing that they had entered into a definitive agreement pursuant to which Google will acquire Motorola."

Google stated in this attached release that "Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business."

Andy Rubin, Senior Vice President of Mobile at Google, stated in this release that "our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community".

This release also states that "Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies."

This transaction is subject to numerous approvals by regulatory agencies. The release asserts that this transaction "will enhance competition in mobile computing".

Google published a short piece in its web site by CEO Larry Page titled "Supercharging Android: Google to Acquire Motorola". It states that "This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences."

It adds that "Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies."

Motorola Mobility also supplies equipment to the cable industry. Matthew Polka, head of the American Cable Association (ACA), stated in a release that "We're going to review the deal to understand the impact on the cable set-top box market, which has been a frustrating one for small cable operators long beholden to the Motorola-Cisco duopoly. For many cable operators, the question is whether Google's takeover of Motorola as one of only two major manufacturers will make things better or worse. ACA members will want assurances from Google that it is both committed to the cable business model and won't use its market power to run roughshod over smaller cable operators."

Polka added that "the future holds great promise for rural consumers as small cable operators explore IP- and cloud-based solutions in offering video to subscribers on TVs, PCs and mobile devices. Prior to today's Motorola Mobility announcement, Google has had its own interests in all of these areas, and it will be important that Google's other business interests do not unduly harm the growth of these new competitive market opportunities.

The Free Press's Derek Turner stated in a release that "The current dominance of two companies in the mobile operating system and applications markets already raises concerns about gatekeeper control, and the vertical integration of the Android OS could impact how app developers innovate and reach consumers. On the surface, this deal doesn’t appear to be in the same league as other competition- and job-killing mergers underway in the telecom marketplace. But in order for the potential of mobile broadband to be realized, it’s important to keep markets open and ensure consumers can exercise free choice."

Time Warner Cable to Acquire Insight Communications

8/15. Time Warner Cable (TWC) and Insight Communications announced in a release that "they have entered into a definitive merger agreement under which Time Warner Cable will acquire Insight for $3 billion in cash". See also, identical Insight release, and TWC's Form 8-K filed with the Securities and Exchange Commission (SEC) on August 15.

This release states that Insight serves "approximately 537,000 high-speed data subscribers, 679,000 video subscribers and 297,000 voice subscribers" in the states of Indiana, Ohio and Kentucky.

This transaction is subject to regulatory approvals.

Derek Turner of the Free Press, a Washington DC based interest group that regularly criticizes cable companies, stated in a release that "We are eager to hear from Time Warner Cable exactly how this proposed transaction will benefit consumers, and not just help shareholders looking for a merger to soothe the jitters of a rocky market. Time Warner Cable's broadband network upgrades have not kept pace with some of their peers, and they have a history of trying to squeeze every last penny out of their rate-hike weary customers. In short, they have a long way to go to convince people that this deal is in the public interest."

DHHS Offers Money to Facebook App Developers

8/15. The Department of Health and Human Services (DHHS) published a notice in the Federal Register (FR) that announces an application development contest titled "Lifeline Facebook App Challenge".

This notice states that "Entrants are required to develop an app that enables a Facebook user to invite three Facebook friends to become `Lifelines,' or points of contact who agree to act as a source of support during disasters. Entrants are encouraged to creatively leverage Facebook's existing networking and geo-locating capabilities to enhance the app's ability to increase personal preparedness, locate potential disaster victims, and streamline information sharing among social networks during disasters."

The winner of this contest will receive $10,000. The second place contestant will receive $5,000. The third place contestant will receive $1,000.

The deadline to submit entries is November 4, 2011. (The DHHS stated in its original notice in the FR that the deadline is 11:59 PM on September 15, 2011. It then published a correction notice in the FR that changes the deadline to November 4, 2011.)

The statutory authority for this contest is Section 105 of HR 5116 [LOC | WW] (111th Congress), the "America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Reauthorization Act of 2010", a huge spending authorization bill enacted late last year. It is now Public Law No. 111-358.

This section merely provides that "Each head of an agency, or the heads of multiple agencies in cooperation, may carry out a program to award prizes competitively to stimulate innovation that has the potential to advance the mission of the respective agency." It makes no references to social networking web sites. It does not require technology or service provider neutrality.

See, original notice in the FR, Vol. 76, No. 154, Wednesday, August 10, 2011, at Pages 49485-49486. See also, correction notice in the FR, Volume 76, No. 157, Monday, August 15, 2011, at Page 50481.

See also, story titled "Obama Signs COMPETES Reauthorization Bill" in TLJ Daily E-Mail Alert No. 2,193, January 5, 2011, and "House and Senate Pass COMPETES Reauthorization Bill" in TLJ Daily E-Mail Alert No. 2,187, December 23, 2010.

FTC Issues Staff Advisory Opinion On CBBB Online Behavioral Advertising Compliance Program

8/15. The Federal Trade Commission (FTC) sent a letter [8 pages in PDF] to Alan Cohen, General Counsel of the Council of Better Business Bureaus (CBBB) that contains a staff advisory opinion regarding the CBBB's accountability program for enforcing compliance with the "Self-Regulatory Principles for Online Behavioral Advertising".

The CBBB sought a staff advisory opinion regarding whether the FTC would bring an enforcement action challenging this online behavioral advertising (OBA) accountability program as an anti-competitive restraint of trade. The FTC letter states that the "FTC staff has no present intention of recommending that the Commission bring any such enforcement action".

A coalition of industry groups, including the CBBB, Interactive Advertising Bureau (IAB), Direct Marketing Association (DMA) and others, released a document [48 pages in PDF] titled "Self-Regulatory Principles for Online Behavioral Advertising" on July 1, 2009.

It followed the FTC's February 12, 2009 release of a report [PDF] titled "Self-Regulatory Principles For Online Behavioral Advertising". See also, story titled "FTC Releases Report on Online Behavioral Advertising" in TLJ Daily E-Mail Alert No. 1,899, February 13, 2009.

The just released FTC letter states that "The proposed CBBB accountability program appears similar to industry self-regulation to establish and seek industry-member compliance with an ethical code. The antitrust laws do not prohibit professional or trade associations from adopting reasonable ethical codes to protect consumers."

"In some instances, however, particular ethical restrictions or compliance mechanisms can unreasonably restrain competition and harm consumers, thereby violating the antitrust laws. Accordingly, we consider the purpose and effects of the proposed accountability program."

The letter continues that "As a general matter, industry self-regulation to provide consumers with more useful information and increased choice promotes consumer welfare with little or no risk of diminishing competition among complying businesses. But industry self-regulatory programs can be designed or misused by competitors to limit competition among them, resulting in increased prices, reduced consumer choice, lesser innovation, and other consumer harms. In addition, industry self-regulatory programs can operate as agreements to exclude non-compliant products or companies from the market. Thus, an agreement among competitors to impose on non-complying companies sanctions that limit their ability to compete effectively would be of concern to antitrust enforcement authorities." (Footnotes omitted.)

This letter then concludes, based upon this analysis, that "the program has little potential for competitive harm", for five reasons.

First, "the accountability program is intended to enhance consumers' understanding and control of OBA".

Second, "the accountability program will impose only relatively minor burdens on companies participating in OBA".

Third, the FTC applies the rule or reason to this program, and "the sanctions for non-compliance with the Principles contemplated under and in conjunction with the accountability program do not appear unreasonable".

Fourth, "the self-regulatory system envisioned by the Principles and the accountability program is broadly applicable across product categories, advertisers, and web site operators. Accordingly, its impacts are not focused on any specific market for goods or services. As a result, the potential for adverse competitive impact in any specific market for goods or services is further attenuated."

Fifth, this accountability program poses little risk of "crowding out" other systems for protecting consumers with respect to OBA.

The FTC's rules, at 16 CFR §§ 1.1-1.4, address advisory opinions generally. Also, on June 23, 2011, the FTC's (FTC) Bureau of Competition (BOC) released a document [10 pages in PDF] that provides information on requesting an advisory opinion involving a competition issue. It is titled "Guidance From the Bureau of Competition on Requesting and Obtaining an Advisory Opinion". See also, story titled "FTC Releases Guidance on Requesting Advisory Opinions on Competition Issues" in TLJ Daily E-Mail Alert No. 2,252, June 30, 2011.

In This Issue
This issue contains the following items:
 • Google to Acquire Motorola Mobility
 • Time Warner Cable to Acquire Insight Communications
 • DHHS Offers Money to Facebook App Developers
 • FTC Issues Staff Advisory Opinion On CBBB Online Behavioral Advertising Compliance Program
Washington Tech Calendar
New items are highlighted in red.
Monday, August 15

The House will not meet. It is in recess until 2:00 PM on September 7. However, it will hold pro forma sessions twice per week until then.

The Senate will not meet. It is in recess until 2:00 PM on September 6. However, it will hold pro forma sessions twice per week until then.

11:00 AM - 12:30 PM. The Heritage Foundation (HF) will host a panel discussion titled "National EMP Recognition Day: The Threat That Can't Be Ingnored". The speakers will be Rep. Roscoe Bartlett (R-MD), Peter Pry (EMPact America), Frank Gafney (Center for Security Studies), Drew Miller, and James Carafano (HF). This event is free and open to the public. See, notice. Location: HF, 214 Massachusetts Ave., NE.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding the report submitted to the FCC on June 30, 2011, by the technical working group co-chaired by LightSquared and the U.S. Global Positioning System Industry Council (USGIC). See, FCC International Bureau's (IB) order dated June 30, 2011. It is DA 11-1133 in DA 11-1133. See also report, part 1, part 2, part 3, part 4, part 5, part 6, and part 7.

EXTENDED FROM AUGUST 8. Extended deadline to submit comments to the Federal Trade Commission (FTC) in response to its notice in the Federal Register regarding the proposed self-regulatory guidelines submitted to the FTC by Aristotle International, Inc. under the safe harbor provision of the Children's Online Privacy Protection Act (COPPA) Rule. See, Federal Register, Vol. 76, No. 123, Monday, June 27, 2011, at Pages 37290-37291. See, notice of extension.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft NIST IR-7275 Rev. 4 [77 pages in PDF] titled "Specification for the Extensible Configuration Checklist Description Format (XCCDF) Version 1.2".

Tuesday, August 16

The House will meet in pro forma session at 11:30 AM.

The Senate will meet in pro forma session at 11:00 AM.

Wednesday, August 17

12:30 - 1:30 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "Tax Aspects of Technology Transactions". The speakers will be Roger Royse (Royse Law Firm) and Kenneth Appleby (Foley & Lardner). Prices vary. CLE credits. See, notice.

Thursday, August 18

TIME? The American Bar Association (ABA) will host a webcast panel discussion titled "LinkedIn for Lawyers".

1:00 PM. The US Telecom will host a webinar titled "Navigating the Rising Tide of Cyber Crime". The speaker will be Tom Dotson (CIO of SureWest). Free. See, notice.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [36 pages in PDF] regarding removing the International Settlements Policy (ISP) from all U.S. international routes except Cuba. The FCC adopted this NPRM on May 12, 2011, and released the text on May 13, 2011. This item is FCC 11-75 in IB Docket No. 11-80. See, notice in the Federal Register, Vol. 76, No. 138, Tuesday, July 19, 2011, at Pages 42625-42631.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [82 pages in PDF] regarding reporting requirements for providers of international telecommunications services. The FCC adopted this NPRM on May 12, 2011, and released the text on May 13, 2011. This item is FCC 11-76 in IB Docket No. 04-112. See, notice in the Federal Register, Vol. 76, No. 138, Tuesday, July 19, 2011, at Pages 42613-42625.

Friday, August 19

The House will meet in pro forma session at 1:00 PM.

The Senate will meet in pro forma session at 10:00 AM.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "Ownership of Digital Media and Electronic Privacy". The speakers will be Ben Kleinman (Manatt Phelps), Sharra Brockman (Verv), Eric Crusius (Centre Law Group), and Paul Roberts (Hogan Lovells). Prices vary. CLE credits. See, notice.

Monday, August 22

10:00 AM - 12:00 NOON. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will meet to discuss the consultation of International Telecommunication Union's (ITU) Telecommunication Standardization Sector Study Group 15 regarding whether draft Recommendation G.tp-oam (Operations, Administration and Maintenance mechanism for MPLS-TP in Packet Transport Network (PTN)) should be approved as a policy-level document, and what policy position the US should take at the December 2011 Study Group 15 meeting on this issue. See, notice in the Federal Register, Vol. 76, No. 153, Tuesday, August 9, 2011, at Page 48939. Location: DOS, 2201 C St., NW.

Deadline to submit oppositions to petitions for reconsideration of the Federal Communications Commission's (FCC)'s Report and Order and Order on Reconsideration [144 pages in PDF] regarding pole attachments. That order is FCC 11-50 in WC Docket No. 07-245 and GN Docket No. 09-51. The FCC adopted and released it on April 7, 2011. The National Cable & Telecommunications Association (NCTA), COMPTEL, and tw telecom filed a petition for reconsideration on June 8, 2011. The Coalition of Concerned Utilities also filed a petition for reconsideration on June 8, 2011. See, June 20, 2011 Public Notice and notice in the Federal Register, Vol. 76, No. 143, Tuesday, July 26, 2011, at Pages 44495-44496.

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