11/1. President Obama nominated Ajit Pai and Jessica Rosenworcel to be members of the Federal Communications Commission (FCC). See, White House news office release. The President announced his intent to nominate Pai and Rosenworcel on October 31. See, release and release.

Pai is nominated for a term of five years from July 1, 2011. This is the Republican position previously held by Meredith Baker.

Rosenworcel is nominated for a term of five years from July 1, 2010. This is the Democratic position held by Michael Copps.

Pai is a partner in the Washington DC office of the law firm of Jenner & Block. He previously worked in the FCC's Office of General Counsel, which handles antitrust merger reviews, at the Department of Justice's (DOJ) Antitrust Division's Telecommunications Task Force, and for the Senate Judiciary Committee (SJC). He has also worked for Verizon Communications.

Rosenworcel (at right) has been Democratic communications counsel to the Senate Commerce Committee (SCC) since 2007. Before that she was a legal advisor to FCC Commissioner Michael Copps. Before that she held other positions at the FCC. And before that, she worked in the Washington DC office of the law firm of Drinker Biddle & Reath.

Sen. Charles Grassley (R-IA) announced in a statement in the Congressional Record that he will place holds on both nominations. Sen. Grassley has a history of placing holds on nominees for reasons unrelated to the nominees' qualifications for holding office.

Sen. Grassley wrote that "I will object to proceeding to the nomination because the FCC continues to stonewall a document request I submitted to the FCC over six months ago on April 27, 2011, regarding their actions related to LightSquared and Harbinger Capital. Since then, I have repeated my request to the FCC through letters I sent on July 5th and September 8th and the FCC continues to deny my request for documents."

He continued that "During the course of my correspondence with the FCC, the FCC has made it clear that it will not voluntarily turn over documents to the 99.6 percent of the Members of Congress and Senators who do not chair a committee with direct jurisdiction over the FCC. As I said in my September 8, 2011, letter, their actions are misguided and unsupportable."

"It not only sets a dangerous precedent for a federal agency to unilaterally set the rules on how it engages with Congress -- it also prevents any meaningful ability for the vast majority of Congress to inform themselves of how an agency works", wrote Sen. Grassley.

Sen. John Rockefeller (D-WV), Chairman of the Senate Commerce Committee (SCC), Rosenworcel's boss, praised her in a release. He said that she "will be an effective advocate by working to close the digital divide and bring expanded access". Michael Copps, her former boss, praised both Rosenworcel and Pai in a statement.

Julius Genachowski, Chairman of the FCC, said that the two are "outstanding choices". See, statement. See also, praise from FCC Commissioner Robert McDowell and praise from FCC Commissioner Mignon Clyburn.

Gary Shapiro, head of the Consumer Electronics Association (CEA), stated in a release that the two nominees "have a deep understanding of technology issues and will be valuable assets to the Commission, the industry and the public". Gordon Smith, head of the National Association of Broadcasters (NAB), stated in a release that they are "two talented individuals with a commitment to public service".

Michael Powell, head of the National Cable & Telecommunications Association (NCTA), stated in a release that they "share extensive telecommunications policy experience, a deep understanding of the agency that is informed by their prior service, and a profound appreciation for the continuing investment needed to promote innovation and sustain today’s dynamic and competitive telecommunications marketplace."

Walter McCormick, head of the US Telecom, stated in a release that "Their breadth of knowledge of the evolving communications industry, its legal challenges and rapid technological changes will help inform the already seasoned leadership at the commission."

Berin Szoka, head of the Tech Freedom, stated in a release that his group looks forward to working with the two "to ensure that FCC regulations serve consumers by advancing competition and innovation while respecting free speech rights".

10/29. Leaders of the House and Senate Committees with jurisdiction over trade sent a letter to Ron Kirk, the US Trade Representative, about ongoing negotiations regarding Russia's accession to the World Trade Organization (WTO).

Sen. Max Baucus (D-MT) and Sen. Orrin Hatch (R-UT), the Chairman and ranking Republican on the Senate Finance Committee, and Rep. Dave Camp (D-MI) and Rep. Sander Levin (D-MI), the Chairman and ranking Democrat on the House Ways and Means Committee, expressed concerns about Russia's protection of intellectual property rights (IPR), and Russia's commitment to join the WTO's 1996 Information Technology Agreement (ITA).

The WTO issued a release regarding the ITA on October 24, 2011. It stated, among other things, that "The Russian Federation said that as part of its accession to the WTO, it was committed to duty-free treatment for products covered by the ITA. To encourage the IT industry in Russia, it intends to fully join the ITA".

The four Congressional leaders wrote that "Intellectual property is critical to U.S. industry and jobs. We believe it is vitally important for potential members of the WTO to demonstrate that they are not only willing to agree to strong protection of intellectual property, but that they also possess the will and the ability to enforce these rights. Unfortunately, Russia's standard of IPR protection has fallen short of these standards."

They also stated that they are "deeply concerned about recent reports questioning Russia's commitment to join the Information Technology Agreement (ITA), a commitment the United States negotiated with Russia as part of the bilateral agreement we reached in 2006."

They explained that "The ITA is one of the most successful WTO agreements, providing duty free treatment to a vast array of information and communications technology (ICT) products, with tremendous benefits to the innovative U.S. high tech sector as well as the many U.S. industries that use ICT to enhance their productivity and competitiveness at home and abroad. The United States has consistently pursued a policy of requiring both new WTO candidates and free trade agreement partners to join the ITA."

The four also reminded USTR Kirk that both the House and Senate "must vote to remove Russia from Title IV of the Trade Act of 1974 before the United States can expect to enjoy the full benefits of Russian membership in the WTO. A high standard accession package will be essential to ensuring support for granting Russia permanent normal trade relations by removing it from Title IV."

11/3. Senate Judiciary Committee (SJC) approved S 75 [LOC | WW], the "Discount Pricing Consumer Protection Act", a bill to undo the Supreme Court's 2007 opinion in Leegin Creative Leather Products v. PSKS, regarding resale price maintenance (RPM).

Sen. Herb Kohl (D-WI) introduced this bill on January 25, 2011. There are eight cosponsors -- all Democrats.

This bill states that its purpose is to "correct the Supreme Court's mistaken interpretation of the Sherman Act in the Leegin decision".

It would add one sentence to the end of Section 1 of the Sherman Act: "Any contract, combination, conspiracy or agreement setting a minimum price below which a product or service cannot be sold by a retailer, wholesaler, or distributor shall violate this Act."

Leegin and RPM. RPM exists when a manufacturer agrees with its distributor(s) to set the minimum price that the distributor(s) can charge for the manufacturer's goods. RPM is employed in the tech sector for consumer electronic devices and other products.

The relevant statute, Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1, provides little guidance. It merely states that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." Section 1 also contains a criminal prohibition. The rest of the law exists in judicial interpretation and agency enforcement.

Prior to 2007, RPM was subject to the antitrust per se rule, rather than the lighter rule of reason standard. Then the Supreme Court held in Leegin that all vertical price restrains are to be judged by the rule of reason, and that the Supreme Court's 1911 opinion in Dr. Miles Medical Co. v. John D. Park & Sons Co., which is reported at 220 U.S. 373, is overturned.

See also, story titled "SCUS Holds That All Vertical Price Restraints Are Subject to Rule of Reason" in TLJ Daily E-Mail Alert No. 1,603, June 28, 2007.

The Leegin opinion changed the law for vertical RPM. Under the lighter rule of reason standard, plaintiffs must show actual or potential harm to competition. After Leegin, horizontal agreements among competitors to fix prices remain per se violations of the Sherman Act. Group boycotts, and horizontal market division are other examples of per se violations.

Arguments For and Against the Bill. Senators briefly debated this bill. Sen. Patrick Leahy (D-VT), the Chairman of the SJC, stated at the meeting that the Leegin opinion is "harmful to consumers".

Sen. Kohl, the Chairman of the Subcommittee on Antitrust, Competition and Consumer Rights, referenced the importance of discount pricing of electronics. He also said that the Supreme Court "incorrectly interpreted the Sherman Act". He argued that minimum retail pricing "threatens the very existence of discounting and discount stores".

Sen. Mike Lee (R-UT), the ranking Republican on the Subcommittee, spoke in opposition to the bill. He referenced economic analysis in support of applying the rule of reason to RPM, and added that rule of reason analysis does not sanction anticompetitive behavior.

The rationale for not having a per se rule against RPM was not discussed. However, for electronic and IT devices, it is this. Manufacturers of these devices sometimes offer products that include numerous new and complicated features and services. But, many consumers do not know what the features are, or how to use them. In order to promote adoption of new technologies, and sales of their products, manufacturers have an interest in distributors disseminating information about the new devices through advertising, in store demonstrations, training of employees, and customer support. But, these services impose costs on the distributors who provide them. This can create a free riding situation, when some distributors go to the trouble to provide such information and support, but others do not. The presence of free riders, offering the products at lower prices, disincents other distributors from educating consumers. This, in turn, disincents manufacturers from offering complex devices that require consumer education. And this inhibits innovation in the IT sector, and the benefits that flow to consumers from such innovation.

The SJC approved the bill by voice vote. Sen. Leahy noted that Sen. Lee voted no. In addition, Sen. Orrin Hatch (R-UT) and Sen. Jon Kyl (R-AZ) asked to be recorded as no votes.

Legislative History. There were similar bills in the 110th and 111th Congress. There is support for these bills among Democrats who sit on the Judiciary Committees. However, none of these bills have been approved by the full House or Senate.

In the 111th Congress, see HR 3190 [LOC | WW], the "Discount Pricing Consumer Protection Act". It was approved by the House Judiciary Committee (HJC), but not by the full House. See also, story titled "House Judiciary Committee to Mark Up Bill to Undo Leegin" in TLJ Daily E-Mail Alert No. 2,020, December 3, 2009.

See also, S 148 [LOC | WW], also titled the "Discount Pricing Consumer Protection Act". It was approved by the Senate Judiciary Committee (SJC), but not by the full Senate. See, story titled "Senate Judiciary Committee Approves Antitrust Bill to Undo Leegin" in TLJ Daily E-Mail Alert No. 2,060, March 20, 2010.

In the 110th, see S 2261, also titled the "Discount Pricing Consumer Protection Act". Neither the SJC nor the full Senate took any action on that bill.

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON legislative business. The schedule includes consideration of HR 2940 [LOC | WW], the "Access to Capital for Job Creators Act", and HR 2930 [LOC | WW], the "Entrepreneur Access to Capital Act". See, Rep. Cantor's schedule for the week.

10:00 AM. The House Judiciary Committee (HJC) will meet to mark up several bills, including HR 3010 [LOC | WW], the "Regulatory Accountability Act". Location: Room 2141, Rayburn Building.

10:00 AM - 12:00 NOON. The House Science Committee's (HSC) Subcommittee on Research and Science Education will hold a hearing titled "STEM In Action: Transferring Knowledge from the Workplace to the Classroom". See, notice. Location: Room 2318, Rayburn Building.

10:00 AM. The House Foreign Affairs Committee (HFAC) will hold a hearing titled "Congressional Executive Commission on China: 2011 Annual Report". See, notice. Location: Room 2172, Rayburn Building.

4:45 PM. There will be a conference committee meeting of the House Appropriations Committee (HAC) and Senate Appropriations Committee (SAC) on the FY 2012 Commerce Justice Science (CJS) appropriations bill. Location: Room HC-5, Capitol Building.

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON legislative business. See, Rep. Cantor's schedule for the week.

Supreme Court conference day. See, calendar. Closed.

9:00 AM. The House Commerce Committee's (HCC) Subcommittee on Communications and Technology will hold a hearing on HR 3035 [LOC | WW], the "Mobile Informational Call Act of 2011". The witnesses will be Faith Schwartz (Hope Now), Stephen Alterman (Cargo Airline Association), Delicia Hand (National Association of Consumer Advocates), Greg Zoeller (Attorney General of the state of Indiana), and Michael Altschul (CTIA). See, notice. Location: Room 2123, Rayburn Building.

9:00 AM - 4:00 PM. The Federal Communications Commission's (FCC) Consumer Advisory Committee will meet. See, notice in the Federal Register, Vol. 76, No. 205, Monday, October 24, 2011, at Page 65726. Location: FCC, Commission Meeting Room, Room TW-C305, 445 12th St., SW.

9:30 - 11:30 AM. The House Oversight and Government Reform Committee (HOGRC) will hold a hearing titled "Identity Theft and Tax Fraud: Growing Problems for the Internal Revenue Service". See, notice. The HOGRC will webcast this event. Location: Room 2154, Rayburn Building.

12:15 - 1:15 PM. The American Bar Association (ABA) will host an on site and telecast event titled "Meet Alison Oldale, Deputy Director for Antitrust, BE". See, notice. No CLE credits. Free. Location: Arnold & Porter, 555 12th St., NW.

5:00 PM. Deadline to submit comments to the Department of Commerce (DOC) and Department of Homeland Security (DHS) in response to their notice in the Federal Register (FR) that requests comments regarding creating a "voluntary" code for internet access service providers to follow regarding the detection, notification and mitigation of botnets. See, FR, Vol. 76, No. 183, Wednesday, September 21, 2011, at Pages 58466-58469. See also, story titled "NIST, NTIA and DHS Propose Botnet Mitigation Regime for Internet Access Service Providers" in TLJ Daily E-Mail Alert No. 2,303, September 22, 2011.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-30 Rev. 1 [85 pages in PDF], titled "Guide for Conducting Risk Assessments", released on September 19, 2011.

10:00 AM - 12:00 NOON. The Information Technology and Innovation Foundation (ITIF) will host an panel discussion titled "UK and U.S. IP Enforcement: Views from the Top". The speakers will be David Kappos (head of the USPTO), John Alty (head of the UK Intellectual Property Office), and Stephen Ezell (ITIF). See, notice. Location: Finnegan, Suite 1150, 901 New York Ave., NW.

10:00 AM. The Supreme Court will hear oral argument in US v. Antoine Jones, Sup. Ct. No. 10-1259, a petition for writ of certiorari to the U.S. Court of Appeals (DCCir) in a criminal case involving the issue of whether the government's warrantless use of a global positioning system (GPS) device to track defendant's car violated his rights under the 4th Amendment. See, November 19, 2010 divided order of the Court of Appeals denying rehearing en banc.

10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Oversight of the Department of Justice". The witness will be Attorney General Eric Holder. The SJC will webcast this event. See, notice. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed meeting. See, notice. Location: Room 219, Hart Building.

12:00 NOON - 2:00 PM. The DC Bar Association will host a panel discussion titled "The America Invents Act -- Perspectives from the PTO and the Bar". The speakers will be Robert Stoll (Commissioner for Patents, USPTO), Stephen Kunin (Oblon Spivak), Harold Wegner (Foley & Lardner), and Mark Williamson (Fitzpatrick Cella Harper & Scinto). See, notice. The price to attend ranges from $30 to $40. No CLE credits. For more information, call 202-626-3463. Location: DC Bar Conference Center, 1101 K St., NW.

12:00 NOON - 1:00 PM. The American Bar Association (ABA) will host a teleconferenced event titled "October Antitrust Update for In-House Counsel". See, notice. No CLE credits. Free.

2:00 PM. There will be a test of the Emergency Alert System (EAS). See, Federal Communications Commission's (FCC) Public Notice of June 9, 2011, and Public Notice of August 23, 2011.

2:30 PM. The Senate Judiciary Committee's (SJC) Subcommittee on Privacy, Technology and the Law will hold a hearing titled "Your Health and Your Privacy: Protecting Health Information in a Digital World". The SJC will webcast this event. Sen. Al Franken (D-MN) will preside. See, notice. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed meeting. See, notice. Location: Room 219, Hart Building.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-153 [24 pages in PDF], titled "Guidelines for Securing Wireless Local Area Networks".

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-121 rev. 1 [49 pages in PDF], titled "Guide to Bluetooth Security".

10/26. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register (FR) that announces that the Advanced Media Workflow Association, Inc. filed a notification of a change in its membership, pursuant to the National Cooperative Research and Production Act of 1993, which pertains to limiting antitrust liability of standard setting consortia. See, Federal Register, Vol. 76, No. 207, Wednesday, October 26, 2011, at Page 66324.

10/24. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register (FR) that announces that the DVD Copy Control Association filed a notification of a change in its membership, pursuant to the National Cooperative Research and Production Act of 1993, which pertains to limiting antitrust liability of standard setting consortia. See, Federal Register, Vol. 76, No. 205, Monday, October 24, 2011, at Page 65749.

10/14. The US Department of Justice's (DOJ) Antitrust Division, the US Federal Trade Commission (FTC), and the European Commission (EC) released a document [7 pages in PDF] titled "Best Practices on Cooperation in Merger Investigations". See also, DOJ release.

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