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November 28, 2011, Alert No. 2,314.
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AT&T Withdraws Merger Applications

11/25. AT&T notified the Federal Communications Commission (FCC) on November 23 that AT&T and Deutsche Telekom withdraw their pending applications associated with the planned merger of AT&T and T-Mobile USA. Others urge the FCC to deny the request, or at minimum, release a "Hearing Designation Order".

On November 22, 2011, FCC Chairman Julius Genachowski announced that he proposed that the FCC's review of the proposed merger of AT&T and T-Mobile be designated for administrative hearing. See, story titled "Genachowski Proposes That FCC Designate AT&T T-Mobile Merger for Administrative Hearing" in TLJ Daily E-Mail Alert No. 2,313, November 22, 2011. The FCC's proceeding is WT Docket No. 11-65.

AT&T then sent a letter [PDF] to the FCC dated November 23, 2011, that states that "AT&T Inc. and Deutsche Telekom AG hereby withdraw, effective immediately, all of the pending applications in this docket, as listed in the Public Notice released by the Commission on April 28, 2011, and, in accordance with the Rules, the applications are to be dismissed without prejudice."

AT&T explained in a separate release dated November 24 that "AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom's U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice either through the litigation pending before the United States District Court for the District of Columbia, Case No. 1:11-cv-01560 (ESH) or alternate means. As soon as practical, AT&T Inc. and Deutsche Telekom AG intend to seek the necessary FCC approval."

AT&T also stated in this release that "As a result of the FCC's action, AT&T expects to recognize a pretax accounting charge of $4 billion ($3 billion cash and $1 billion book value of spectrum) in the 4th quarter of 2011 to reflect the potential break up fees due Deutsche Telekom in the event the transaction does not receive regulatory approval." (Parentheses in original.)

Also, Genachowski and AT&T's Randall Stephenson and Wayne Watts spoke by telephone on November 22. AT&T filed a notice of ex parte communication regarding this conversation. This notice states that "on Tuesday, November, 22, 2011, Chairman Genachowski called Mr. Stephenson and Mr. Watts regarding the above-referenced transactions. During the call, Chairman Genachowski indicated that he would be circulating to his fellow Commissioners a draft order approving the Qualcomm transaction and a draft order designating the T-Mobile transaction for an administrative hearing."

This notice adds that "Mr. Stephenson and Mr. Watts inquired about the timing and procedural process for the draft designation order. Chairman Genachowski indicated that the draft designation order would likely be voted in the next several days or weeks but the administrative hearing would be deferred until after resolution of the pending litigation with the Department of Justice."

Deutsche Telekom (DT) also filed a notice of ex parte communication with the FCC on November 25 in which it stated that "Effective November 23, 2011, AT&T and Deutsche Telekom withdrew the above-referenced applications in WT Docket No. 11-65 without prejudice in accordance with the Commission's rules. This ex parte notice relates to a telephone conversation between Chairman Julius Genachowski and René Obermann, Chief Executive Officer of Deutsche Telekom AG, that occurred prior to the withdrawal of those applications. Specifically, on Tuesday, November, 22, 2011, Chairman Genachowski called Mr. Obermann regarding the above-referenced transaction."

DT continued that "During the call, Chairman Genachowski indicated that he would be circulating to his fellow Commissioners a draft order designating the AT&T/T-Mobile transaction for an administrative hearing. Mr. Obermann expressed disappointment in this development. He also indicated that the transaction was precipitated by T-Mobile's inability to secure needed spectrum not available under FCC policies. Mr. Obermann also reiterated the benefits of the proposed transaction." (Footnotes omitted.)

Groups Seek FCC Release of Hearing Designation Order

11/28. Various groups advocate release by the Federal Communications Commission (FCC) of a Hearing Designation Order in the FCC's review of the proposed merger of AT&T and T-Mobile USA.

On November 22, 2011, FCC Chairman Julius Genachowski announced that he proposed that the FCC's review of the proposed merger of AT&T and T-Mobile be designated for administrative hearing. See, story titled "Genachowski Proposes That FCC Designate AT&T T-Mobile Merger for Administrative Hearing" in TLJ Daily E-Mail Alert No. 2,313, November 22, 2011.

AT&T and Deutsche Telekom then promptly notified the FCC of the withdrawal of pending applications associated with the merger. See, related story in this issue titled "AT&T Withdraws Merger Applications".

The Dish Network filed a notice of ex parte communication on November 28, 2011, in which it disclosed that its Deputy General Counsel spoke with FCC Chief of Staff Ed Lazarus on the 28th. This notice states that "DISH urged the Commission to vote on and release the Hearing Designation Order (``HDO´´) circulated on Wednesday, November 23, 2011. The release of the HDO can be done simultaneously -- if the Commission chooses to do so -- with the grant of AT&T’s motion to withdraw their applications."

Cathy Sloan of the Computer and Communications Industry Association (CCIA) stated in a release that "The FCC has spent many months examining the likely impact of AT&T’s proposed takeover of its competitor T-Mobile. As the agency charged with protecting the public interest in affordable telecommunications, the FCC has unique expertise on how this combination would harm consumers and small businesses. That information is now available and should be released immediately. This analysis is vitally important to the future of Internet access and the public has a right to see it."

Matt Wood of the Free Press stated in a release on November 26 that "AT&T is desperately trying to salvage its deal with talk of divestitures, but it's time for it to stop glossing over the harm this deal would cause to jobs, competition and prices, and to pull the plug on this merger once and for all."

The Public Knowledge (PK) and Media Access Project (MAP) filed a pleading with the FCC on November 28 outright opposing AT&T's withdrawal of pending applications. They request that the FCC "deny AT&T's recent request to dismiss its application without prejudice and issue a Hearing Designation Order".

They wrote that the FCC "is under no obligation to stand idly by while AT&T attempts to game the system and circumvent Commission review of its application".

The PK and MAP elaborated that "AT&T and Deutsche Telekom AG have explicitly and publicly stated that they are not requesting a withdrawal because they are re-thinking their proposed license transaction, but rather because they intend to seek a favorable decision in federal court, which the companies can then use to pressure the Commission to approve the merger. AT&T and Deutsche Telekom fear that the Commission’s opinion as the relevant expert agency will hurt their arguments at trial, but the Commission has ample authority to continue to investigate the parties’ application despite the consequences that investigation may have on AT&T's trial strategy." (Footnotes omitted.)

They also assert that withdrawing the applications "would thwart the fair and efficient operation of the Commission's procedural regulations".

Actually, the FCC has no procedural regulations for its antitrust merger reviews. The FCC began its lengthy and complex reviews of mergers involving companies regulated by the FCC shortly after passage of the Telecommunications Act of 1996. However, nothing in the statute directed the FCC to conduct these reviews, and the FCC has not since promulgated either substantive or procedural rules for these proceedings.

FCC rules are codified in Title 47 of the Code of Federal Regulations. Part I of Subchapter A pertains to "Practice and Procedure". The FCC has adopted rules for many things, but not for merger reviews. There is a Subpart F pertaining to "Wireless Radio Services". It states that its purpose is to "establish the requirements and conditions under which entities may be licensed in the Wireless Radio Services". The PK/MAP filing cites these rules. The FCC also has rules governing complaints against common carriers. The PK/MAP filing also sites these as authority for the proposition that the FCC possesses the discretion to deny requests to withdraw applications associated with FCC merger reviews.

Export Control News

11/17. Fu-Tain Lu pled guilty in the U.S. District Court (NDCal) to violation of federal export control regulations in connection with his export of microwave amplifiers to a company located in the People's Republic of China (PRC) without obtaining a license or license exemption from the Department of Commerce (DOC). The U.S. Attorneys Office for the Northern District of California stated in a release that Lu was the owner and founder of Fushine Technology, Inc., and that he acquired the equipment at issue from Miteq Components. Microwave amplifiers have applications in both commercial and military satellite communications. Lu was charged by indictment in 2009. See, Department of Homeland Security (DHS) release. This case is U.S. v. Fu-Tain Lu, U.S. District Court for the Northern District of California, D.C. No. CR 09-0341 RMW.

11/4. The U.S. District Court (SDCal) sentenced Phillip Andro Jamison to serve 30 months in prison following his plea of guilty to one count of export of defense articles without a license. The U.S. Attorneys Office for the Southern District of California stated in a release that Jamison, who previously served in the U.S. Navy, stole things from the armory of the Naval Amphibious Base Coronado, and then sold them on the eBay auction web site. This included night vision equipment, which he exported to the People's Republic of China (PRC), without an export license from the Department of State (DOS). This case is U.S. v. Jamison, U.S. District Court (SDCal), D.C. No. 10CR3618-H.

Eric Hirschhorn10/31. The Senate belatedly confirmed Eric Hirschhorn to be Under Secretary of Commerce for Export Administration. See, Congressional Record, October 31, 2011, at Page S6929. Although, President Obama gave him a recess appointment on March 27, 2010. See, White House news office release. Secretary of Commerce John Bryson stated in a release on November 1 that "Eric's experience and drive will be critical to this administration's efforts to reform America's Cold War-era export control laws, strengthening U.S. national security and increasing the competitiveness of U.S. companies."

People and Appointments

11/21. Cybele Daley was named SVP for Government Affairs of the Motion Picture Association of America (MPAA). Anna Soellner was named VP for Corporate Communications. See, MPAA release. Daley previously worked at Van Scoyoc Associates, and before that as a political appointee in the Department of Justice's (DOJ) Office of Justice Programs in the Bush administration. Soellner was previously VP for Communications at the Center for American Progress (CAP).

11/18. The Senate confirmed Claude Steele to be a member of the National Science Foundation's (NSF) National Science Board for a term expiring on May 10, 2014. See, Congressional Record, November 18, 2011, at Page S7876. He is Dean of the School of Education at Stanford University. He background is in psychology.

11/18. The Senate confirmed Anneila Sargent to be a member of the National Science Foundation's (NSF) National Science Board for a term expiring on May 10, 2016. See, Congressional Record, November 18, 2011, at Page S7876. She works in the administration of California Institute of Technology. Her background is in astronomy.

11/15. President Obama nominated Mark Mazur to be Assistant Secretary of the Treasury for Tax Policy. See, White House news office release and release. He is currently Deputy Assistant Secretary for Tax Analysis.

11/10. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved by voice vote the nomination of Michael Horowitz to be Inspector General of the Department of Justice (DOJ).

11/7. The Senate confirmed Charles McCullough to be Inspector General of the Intelligence Community at the Office of the Director of National Intelligence (ODNI). See, Congressional Record, November 7, 2011, at Page S7161.

11/3. President Obama nominated Alan Krueger to be a member of the Executive Office of the President's (EOP) Council of Economic Advisors. See, Congressional Record, November 3, at Page S7144.

11/2. The Department of Homeland Security (DHS) published a notice in the Federal Register (FR) in which it announced the renewal of the charter of its Homeland Security Information Network Advisory Committee, and requested that persons interested in becoming members submit applications to the DHS. The deadline is November 18, 2011. See, FR, Vol. 76, No. 212, Wednesday, November 2, 2011, at Pages 67750-67751.

10/25. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register that announces the membership of its Performance Review Board, which has responsibilities with respect to the Senior Executive Service. The members are Fiona Alexander, Leonard Bechtel, Bernadette Rivera, Karl Nebbia, and Alan Vincent. See, Federal Register, Vol. 76, No. 206, Tuesday, October 25, 2011, at Page 66043.

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In This Issue
This issue contains the following items:
 • AT&T Withdraws Merger Applications
 • Groups Seek FCC Release of Hearing Designation Order
 • Export Control News
 • People and Appointments
Washington Tech Calendar
New items are highlighted in red.
Monday, November 28

The House will not meet. See, Rep. Cantor's schedule for the week.

The Senate will return from its Thanksgiving break at 1:00 PM. It will resume consideration of consideration of S 1867 [LOC | WW], the "Department of Defense Authorization Act". It will also consider the nomination of Christopher Droney to be a Judge of the U.S. Court of Appeals (2ndCir).

10:00 AM - 5:15 PM. Day one of a two day meeting of the National Science Foundation's (NSF) Advisory Committee for Cyberinfrastructure. See, notice in the Federal Register, Vol. 76, No. 217, Wednesday, November 9, 2011, at Page 69769. Location: NSF, 4201 Wilson Blvd., Room 1235, Arlington, VA.

11:00 AM. The Supreme Court will hear oral argument in Mims v. Arrow Financial Services, Sup. Ct. No. 10-1195 a petition for writ of certiorari to the U.S. Court of Appeals (11thCir). The issue is whether federal courts can hear actions brought under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227. See, November 30, 2010 opinion of the Court of Appeals.

Deadline to submit comments to the Federal Trade Commission (FTC) regarding the Proposed Consent Agreement in the FTC's administrative proceeding regarding Healthcare Technology Holdings, Inc.'s acquisition of SDI Health LLC, and the impact upon the market for certain healthcare data. This is in substance a Section 7 of the Clayton Act (15 U.S.C. § 18) proceeding, but brought under the rubric of Section 5 of the FTC Act (15 U.S.C. § 45). See, notice in the Federal Register, Vol. 76, No. 213, Thursday, November 3, 2011, at Pages 68189-68191.

Tuesday, November 29

The House will meet at 2:00 PM for legislative business. It will consider several items under suspension of the rules, including HR 3012 [LOC | WW], the "Fairness for High-Skilled Immigrants Act". Votes will be postponed until 6:30 PM. See, Rep. Cantor's schedule for the week.

The Senate will meet at 10:00 AM. It will resume consideration of S 1867 [LOC | WW], the "Department of Defense Authorization Act".

10:00 AM - 5:15 PM. Day two of a two day meeting of the National Science Foundation's (NSF) Advisory Committee for Cyberinfrastructure. See, notice in the Federal Register, Vol. 76, No. 217, Wednesday, November 9, 2011, at Page 69769. Location: NSF, 4201 Wilson Blvd., Room 1235, Arlington, VA.

12:00 NOON - 1:00 PM. The American Bar Association (ABA) will host a teleconferenced panel discussion titled "Antitrust as a Defense in Intellectual Property Infringement Cases". The speakers will be Oliver Antoine (Crowell & Moring), Pierre Regibeau (Charles River Associates), Jing He (ZY Partners of Beijing), Ingrid Vandenborre (Skadden Arps), and Aurelien Condomines (Aramis). See, notice. Prices vary.

12:00 NOON - 1:30 PM. The American Bar Association (ABA) will host a webcast and teleconferenced panel discussion titled "New Restrictions on U.S. Internet Sales: Data Passes, Negative Options, Automatic Renewals and Recurring Charges". The speakers will be Holly Towle (K & L Gates), Alysa Hutnik (Kelley Drye & Warren), and Damier Xandrine (Wells Fargo Bank). See, notice. Prices vary. CLE credits.

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

5:00 PM. The House Rules Committee (HRC) will meet to adopt rules for the consideration by the full House of HR 527 [LOC | WW], the "Regulatory Flexibility Improvements Act of 2011", and HR 3010 [LOC | WW], the "Regulatory Accountability Act of 2011". See, notice. Location: Room H-313, Capitol Building.

Wednesday, November 30

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

8:00 AM. The National Cable and Telecommunications Association (NCTA), USTelecom, and CTIA will host an event titled "Protecting American Innovation in Cyberspace". The speaker will be Rep. Mike Rogers (R-MI). Persons interested in attending should e-mail Pam Ford at pford at ncta dot com. Location: NCTA, 25 Massachusetts Ave., NW.

10:00 AM - 12:00 NOON. The House Science Committee's (HSC) Subcommittee on Investigations and Oversight will hold a hearing titled "Stimulus Oversight:  An Update on Accountability, Transparency, and Performance". It will address, among other topics, spending by the Department of Commerce (DOC) and National Science Foundation (NSF). See, notice. The HSC will webcast this event. Location: Room 2318, Rayburn Building.

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing on the nominations of Jessica Rosenworcel and Ajit Pai to be Commissioners of the Federal Communications Commission (FCC). The SCC will webcast this event. See, notice. Location: Room 253, Russell Building.

6:00 - 8:15 PM. The Federal Communications Bar Association (FCBA) will host an event titled "Slicing the Airwaves Pie: Incentive Auctions, Incumbent Relocation and New Principles of Spectrum Management". Prices vary. CLE credits. Registrations and cancellations are due by 5:00 PM on November 28. See, registration form. Location: Bingham McCutchen, 2020 K St., NW.

Thursday, December 1

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

8:00 - 10:00 AM. The U.S. Patent and Trademark Office (USPTO) will host an event titled "Trademark Office Speaks". The speakers will be Deborah Cohn (Commissioner for Trademarks) and Gerard Rogers (Chief Administrative Trademark Judge of the U.S. Trademark Trial and Appeal Board). The price to attend ranges from $20 to $35. The D.C. Bar Association, which bars reporters from many of its events, states that this is a DC Bar event. See, notice. Location: Cosmos Club, 2121 Massachusetts Ave., NW.

8:30 AM - 12:30 PM. The Phoenix Center for Advanced Legal and Economic Public Policy Studies will host an event titled "Phoenix Center 11th Annual U.S. Telecoms Symposium". The speakers will include Rep. Greg Walden (R-OR), Rep. Lee Terry (R-NE), Marius Schwartz (FCC Chief Economist), Tim Brennan (UMBC), Michael Pelcovits (MiCRA), Michael Rollins (Citi Investment Research & Analysis), Chris Gleason (Alyeska Investment Group), Michael Powell (NCTA), Steve Largent (CTIA), and James Cicconi (AT&T). See, notice. Location: University Club, 1135 16th St., NW.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda again lists consideration of three judicial nominees: Jacqueline Nguyen (to be a Judge of the U.S. Court of Appeals for the 9th Circuit), Gregg Costa (U.S. District Court for the Southern District of Texas), and David Guaderrama (USDC, Western District of Texas). The SJC will webcast this event. Location: Room 226, Dirksen Building.

12:00 NOON. The Federal Trade Commission's (FTC) Bureau of Economics will host a presentation titled "Tying and Bundling in a Nearly Contestable Market". The speaker will be Michael Salinger (Boston University). See, presentation paper [PDF]. For more information, contact Loren Smith at lsmith2 at ftc dot gov or Tammy John at tjohn at ftc dot gov. Location: FTC, Room 4100, 601 New Jersey Ave., NW.

12:00 NOON - 1:30 PM. The American Bar Association (ABA) will host a brown bag lunch titled "Old Media Meet New Media: What Lawyers & Clients Need to Know Before and During a Crisis". The speakers will be Len Biegel, Rich Cooper, Andre Francis and Mark Sedak. See, notice. Location: ABA, 740 15th St., NW.

1:00 PM. The House Small Business Committee's (HSBC) Subcommittee on Healthcare and Technology will hold a hearing titled "Cyber Security: Protecting Your Small Business". The witnesses will be Rep. Mac Thornberry, (R-TX), David Beam (North Carolina Electric Membership Corporation and National Rural Electric Cooperative Association), Glenn Strebe (Air Academy Federal Credit Union and National Association of Federal Credit Unions), and Michael Kaiser (National Cyber Security Alliance). See, notice. Location: Room 2360, Rayburn Building.

1:00 PM. The USTelecom will host a webcast seminar titled "Botnets, Malware and Other Cyber Threats: A Technology and Policy Primer". See, notice. Free.

5:30 PM. The University of Maryland (UM) and Google will host an event titled "Current R&D Initiatives in Cybersecurity". The speaker will be Douglas Maughan (Director of the DHS's Homeland Security Advanced Research Projects Agency's Cyber Security Division). See, notice and registration page. For more information, contact Eric Chapman at 301-405-7136 or echapman at umiacs dot umd dot edu. Location: UM, Jeong Kim Engineering Building, Room 1110, College Park, MD.

6:00 - 8:30 PM. The Federal Communications Bar Association (FCBA) will host a reception. Prices vary. Registrations and cancellations are due by 5:00 PM on November 28. See, registration form. Location: Swedish Embassy, 2900 K St., NW.

Friday, December 2

The House will meet at 9:00 AM for legislative business. The House will consider HR 527 [LOC | WW], the "Regulatory Flexibility Improvements Act of 2011", and HR 3010 [LOC | WW], the "Regulatory Accountability Act of 2011". See, Rep. Cantor's schedule for the week.

Supreme Court conference day. See, calendar. Closed.

5:00 PM. Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding its draft Special Publication 500-293 [32 pages in PDF] titled "US Government Cloud Computing Technology Roadmap, Release 1.0". See, notice in the Federal Register, Vol. 76, No. 211, Tuesday, November 1, 2011, at Pages 67418-67419.

Deadline to submit comments to the Department of Homeland Security (DHS) in response to its notice in the Federal Register (FR) that announces, describes, and recites proposed rules regarding its system of records involving collection and use debit and credit card data for civil, criminal and intelligence purposes. The DHS proposes to exempt portions of this system of records from one or more provisions of the Privacy Act. See, FR, Vol. 76, No. 212, Wednesday, November 2, 2011, at Pages 67621-67622.

Monday, December 5

10:00 - 11:30 PM. The Information Technology and Innovation Foundation (ITIF) will host an panel discussion titled "America's Competitiveness Crisis and the Anemic Job Recovery". The speakers will be Lenny Mendonca (McKinsey Global Institute), George Tassey (NIST), and Robert Atkinson (ITIF). See, notice. Location: ITIF/ITIC, Suite 610A, 1101 K St., NW.

6:00 - 9:15 PM. The DC Bar Association will host an event titled "IP Year In Review Series 2011: Copyright and Trademark Update". The speakers will be Amy Benjamin (Stein McEwen) and Terence Ross (Crowell & Moring). See, notice. The price to attend ranges from $89 to $129. CLE credits. For more information, call 202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.

7:00 PM. The Intellectual Property Owners Association will host a reception and dinner titled "2011 IPO Education Foundation Awards Dinner". The speakers will include David Kappos, head of the U.S. Patent and Trademark Office (USPTO). Location: 8th and G St., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [60 pages in PDF] regarding its review process for foreign ownership of wireless companies. The FCC adopted and released this NPRM on August 9, 2011. It is FCC 11-121 in IB Docket No. 11-133. See, story titled "FCC Issues Foreign Ownership NPRM" in TLJ Daily E-Mail Alert No. 2,285, August 10, 2011. See, Federal Register, Vol. 76, No. 204, Friday, October 21, 2011, at Pages 65472-65485.

Deadline for Facebook to respond to the November 10, 2011, letter from Rep. Joe Barton (R-TX) and Rep. Ed Markey (D-MA) in which they inquired about Facebook's patent application filed on February 8, 2011 for a method of "tracking information about activities of users of social networking system while on another domain".