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Monday, June 18, 2012, Alert No. 2,398.
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Copyright Office Issues Proposed STELA Rules Regarding Auditing Statements of Account

6/14. The Copyright Office (CO) published a notice in the Federal Register (FR) that announces, recites, describes, and sets the comment deadlines for, its proposed rules that implement the provision of the Satellite Television Extension and Localism Act of 2010 (STELA) that allows copyright owners to audit certain Statements of Account filed with the CO.

This notice explains that "Cable operators and satellite carriers pay royalties to and file Statements of Account with the Copyright Office every six months as required by law for the use of the statutory licenses that allow for the retransmission of programming carried on over-the-air broadcast signals. However, until the passage of STELA the licenses did not authorize the copyright owners, who are the beneficiaries of the royalties collected, to audit the information on Statements of Account and the amounts paid for use of the statutory licenses."

The STELA, which was S 3333 [LOC | WW] in the 111th Congress, is now Public Law No. 111-175. See, story titled "Obama Signs Satellite TV Bill" in TLJ Daily E-Mail Alert No. 2,089, May 28, 2010.

The deadline to submit initial comments is 5:00 PM on August 13, 2012. The deadline to submit reply comments is 5:00 PM on September 12, 2012. See, FR, Vol. 77, No. 115, Thursday, June 14, 2012, at Pages 35643-35652.

Senators Introduce Bill to Establish PNTR with Russia

6/12. Sen. Max Baucus (D-MT) and others introduced S 3285 [LOC | WW], a bill that establishes permanent normal trade relations (PNTR) with Russia and repeals the 1974 Jackson Vanik amendment.

The original cosponsors of the bill are Sen. John Thune (R-SD), Sen. John Kerry (D-MA), and Sen. John McCain (R-AZ).

Sen. Baucus stated in a release "Jackson-Vanik served its purpose during the Cold War, but it’s a relic of another era that now stands in the way of our farmers, ranchers and businesses pursuing opportunities to grow and create jobs. We owe it to American workers and businesses to enable them to take advantage of the doors opening in Russia."

This release adds that "Russia is expected to join the WTO formally this summer, regardless of any action Congress does or does not take. As part of the accession process, Russia will lower tariffs and increase market access for foreign businesses from countries that have permanent normal trade relations with it.  Congress must pass legislation establishing PNTR by the time Russia joins the WTO for the United States to enjoy the full economic benefits."

The bill does not address protection of intellectual property rights in Russia.

However, Sen. Baucus's release adds that "Unlike a free trade agreement, the United States will not provide any market access benefits, lower any U.S. tariffs, or make other changes to our trade laws as a result of Russia’s WTO accession. PNTR simply allows American businesses to take advantage of Russia’s concessions. These will include: additional market access for U.S. service providers; intellectual property enforcement ... and dispute settlement to enforce WTO rules".

Rebecca Blank, the acting Secretary of Commerce, stated in a release that "We welcome the Senate's introduction of this legislation. Now that Russia is entering the WTO, the benefits of PNTR with Russia are clear and compelling for American companies. This Senate bill will help American manufacturers, farmers, and service firms compete on a level playing field in the growing Russian market, increase exports, and support well-paying American jobs. We look forward to working with Congress on the successful and timely passage of these necessary measures."

The House Ways and Means Committee (HWMC) will hold a hearing titled "Russia's Accession to the World Trade Organization and Granting Russia Permanent Normal Trade Relations" on Wednesday, June 20, at 9:30 AM. See, notice.

The Senate Finance Committee (SFC) will hold a hearing titled "Russia's WTO Accession -- Administration's Views on the Implications for the United States" on Thursday, June 21. See, notice.

FTC and DOJ Release Annual HSR Report

6/13. The Federal Trade Commission (FTC) and the Department of Justice's (DOJ) Antitrust Division released a report [46 pages in PDF] titled "Hart Scott Rodino Annual Report Fiscal Year 2011". See also, FTC release.

This report covers the time period of October 1, 2010 through September 30, 2011.

The total number of covered transactions rose for the second straight year in FY2011, after declining from a peak in FY2007. There were 1,450 transactions in FY2011, up from 1,166 in FY2010, and 716 in FY2009. (See, Table 1, below.)

The percentage of transactions in which either the DOJ or FTC made a second request has been steady at about 4 percent during the Obama administration. This is higher than during the Bush administration.

The FTC made 17 challenges in FY2011, and the DOJ made 20, for a total of 37, or about 2.6%. There were 41 challenges in FY2010, or about 3.5%, and 31 challenges in FY2009. The percentage of transactions that are challenged is way up from the Bush Administration.

There were 1,157 early termination requests (ETRs) in FY2011. 888 were granted, or about 76.8% of all transactions involving ETRs. This is up from 73.9% in FY2010.

The 2011 report also discloses that in 8.1% of transactions in FY2011 the acquired entity was in the information technology sector. IT accounted for 9.0% in FY2010. IT accounted for 8.2% in FY2009.

This article also examines the granular industry sector data contained in the tables attached to these annual report to display HSR trends in information and communications technology (ICT) sectors. Unfortunately, the reporting categories used in these annual reports has changed. For example, while these reports long had a category titled "Communications", these report did not begin to break down data by internet sectors until FY2003. Also, while these reports long had a huge category titled "Industrial and Commercial Machinery and Computer Equipment", these reports did not add a category for "Computer and Electronic Product Manufacturing" until FY2007.

The following Table 1 summarizes key overall trends.

Table 1.
HSR Trends: 2005-2011
  Total
Trans-
actions
2nd
Requests
Challenges ETRs
Granted
IT
2005 1,675 50 3.1% 18 1.1% 72.0% 8.6%
2006 1,768 45 2.6% 32 1.8% 74.8% 3.8%
2007 2,201 63 3.0% 34 1.5% 76.2% 4.0%
2008 1,726 41 2.5% 37 2.1% 73.7% 6.9%
2009 716 31 4.5% 31 4.3% 68.9% 8.2%
2010 1,166 46 4.1% 41 3.5% 73.9% 9.0%
2011 1,450 58 4.1% 37 2.6% 76.8% 8.1%

For the years of the dot com boom, these reports contain sector data for "Communications" and "Motion Pictures". These reports did not begin to break out data for internet related service sectors until the FY2003 report. These reports are not helpful in measuring the number of transactions in the ICT equipment sectors until FY2007.

However, it is possible to state that overall for ICT services sectors, transactions are way down from the heady days of the dot com boom. The FY1998 report states that there were 344 communications transactions. The FY1999 report states that there were 370 communications transactions. The FY2000 report states that there were 446 communications transactions. The FY2001 report states that there were 149 communications transactions.

ICT services transactions then declined to a low of 70 in FY2003. Total ICT services sector transactions then rose to over 100 per year, and remained steady, for FY2004 through FY2007. ICT services transactions then declined with the economic downturn of 2008, and reached a low of 35 in FY2009. ICT services sector transactions have been rising since, to 67 in FY2010, and to 84 in FY2011.

These reports only disclose computer equipment data for the years FY2007 through FY2011. There were 45 computer equipment transactions in FY2011, down slightly from 47 in FY2010, but up from 27 in FY2009.

Total ICT transactions, including services sectors and computer equipment, rose to 129 in FY2011, from 114 in FY2010, and 62 in FY2009.

The FY 2011 report states that 8.1% of all transactions were "Information Technology". However, the report does not disclose how the FTC calculated this figure. TLJ Table 2, below, lists a total of 129 ICT transactions in FY 2011, which is 8.9% of total transactions, 1,450.

Table 2.
HSR ICT Sector Transactions: 2002-2011
  02 03 04 05 06 07 08 09 10 11
Motion Pictures (Category 512) 14 5 14 4 15          
Motion Pictures and Sound Recording Industries (512)           10 8 3 3 4
Online Services (514)   20 24 24 8          
Information Services and Data Processing Services (514)                 1 1
Broadcasting (except Internet) (515)         24 12 8 5 10 10
Internet Publishing and Broadcasting (516)         2 4 7   4 2
Communications (513) 79 45 74 82 23          
Telecom. (517)       2 37 44 42 20 32 38
Internet Service Providers, Web Search Portals, and Data Processing (518)       2 12 34 10 4 16 21
Other Information Services (519)           3 3 3 1 8
Subtotal: ICT Services 93 70 112 114 121 107 78 35 67 84
Computer and Electronic Product Manufacturing (334)           56 52 27 47 45
Total ICT           163 130 62 114 129

Background. The Hart Scott Rodino Antitrust Improvements Act of 1976, which is codified at 15 U.S.C. §18a, established the premerger notification regime, jointly administered by the DOJ and the FTC.

The HSR Act, as amended, sets minimum reporting thresholds. Then, the reporting parties may not close their transaction until either the waiting period outlined in the HSR Act has passed, or the DOJ or FTC has granted early termination of the waiting period.

It should be noted too that one factor that affects the total number of HSR transactions is changes to the reporting threshholds.

The Federal Communications Commission (FCC), which conducts redundant merger reviews involving ICT companies, does not comply with the requirements of the HSR Act.

On June 13, the FTC published a notice in the Federal Register that lists the early terminations granted by the FTC and DOJ during the month of May. See, FR, Vol. 77, No. 114, Wednesday, June 13, 2012, at Pages 35387-35389.

See also, story titled "HSR Report Shows Increased Antitrust Scrutiny in Obama Administration" in TLJ Daily E-Mail Alert No. 2,139, October 5, 2010.

Data Sources. The data in Table 1 is based upon the just released report, as well as annual reports from prior years. See, FY2005 report [47 pages in PDF], FY2006 report [51 pages in PDF], FY2007 report [52 pages in PDF], FY2008 report [46 pages in PDF], FY2009 report [43 pages in PDF], and FY2010 report [45 pages in PDF].)

The data in Table 1 in the column titled "Total Transactions" is taken from the FY 2011 report, Table 1, page 1.

The percentage data in the column titled "2nd Requests" is taken from the FY 2011 report, Figure 2, page 5. Appendix A lists second requests for each year of the FTC and the DOJ. TLJ summed this two figures to produce the total number of second requests for the above table. If one divides the total number of second requests by the total number of transactions, this produces a percentage, which is not listed in the above table, which is slightly different from the report calculated percentage. A footnote in the 2011 report attributes this to "rounding". For example, TLJ would calculate second requests as a percentage of total transactions as 4.0%, rather than the 4.1% reported by the just released report.

The data in the column titled "Challenges" is TLJ calculations based upon data taken from the FY 2005 through 2011 reports. The reports state the number of FTC challenges, and DOJ challenges. TLJ summed the two numbers, and then divided this sum by the total number of transactions, for each year.

The data in the column titled "Early Termination Requests Granted" contains TLJ calculations that a based on data contained in Appendix A of the FY2011 report. TLJ divided the number of early termination requests (ETRs) granted by the number of transactions involving ETRs.

The data in Table 1 in the column titled "IT" is taken from Figure 3 of each annual report.

The data in Table 2 is taken from Table X of the annual reports for FY 2002 through 2011. TLJ calculated totals.

More News

6/15. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register (FR) announcing that its Commerce Spectrum Management Advisory Committee (CSMAC) will meet on July 24, 2012, in Boulder, Colorado. The agenda includes discussion of identifying radio spectrum for reallocation for wireless broadband, repurposing the 1695-1710 MHz and 1755-1850 MHz bands for wireless broadband, sharing spectrum, managing spectrum, and unlicensed spectrum. See, FR, Vol. 77, No. 116, Friday, June 15, 2012, at Pages 35941-35942. On July 25-26, the DOC/NTIA/ITS will host a two day conference titled "International Symposium on Advanced Radio Technologies" or "ISART", in Boulder, Colorado. See, notice.

6/13. The Federal Communications Commission (FCC) published a notice in the Federal Register (FR) that sets comment deadlines for its May 25, 2012 Public Notice [MS Word], DA 12-818, regarding the privacy and data security practices of mobile wireless services providers with respect to customer information stored on their users' mobile communications devices. The deadline to submit initial comments is July 13, 2012. The deadline to submit reply comments is July 30, 2012. See, FR, Vol. 77, No. 114, Wednesday, June 13, 2012, at Pages 35336-35338.

6/8. The Federal Communications Commission (FCC) published a notice in the Federal Register (FR) that sets deadlines to submit oppositions, comments and replies to the American Cable Association's (ACA) Petition for Reconsideration of the FCC's Fifth Report and Order [130 pages in PDF] regarding the Emergency Alert System (EAS). This order continues the FCC's process of revising its EAS rules to specify the manner in which EAS participants must be able to receive alert messages formatted in the Common Alerting Protocol (CAP). The FCC adopted this item on January 9, 2012, and released the text on January 12, 2012. It is FCC 12-7 in EB Docket No. 04-296. The ACA asked in its on April 23, 2012, petition for a streamlined waiver process for small cable systems serving fewer than 501 subscribers that lack physical connectivity to broadband Internet access. See, FR, Vol. 77, No. 111, Friday, June 8, 2012, at Pages 33995-33997. See also, the ACA's April 23 release and the FCC's May 25, 2012, Public Notice (DA 12-834). The deadline to submit oppositions and comments is June 25. The deadline to submit replies is July 3.

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In This Issue
This issue contains the following items:
 • Copyright Office Issues Proposed STELA Rules Regarding Auditing Statements of Account
 • Senators Introduce Bill to Establish PNTR with Russia
 • FTC and DOJ Release Annual HSR Report
 • More News
Washington Tech Calendar
New items are highlighted in red.
Tuesday, June 19

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

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, Vol. 77, No. 106, Friday, June 1, 2012, at Pages 32570-32571. Location: NIST, Portrait Room, Administration Building, 100 Bureau Drive, Gaithersburg, MD.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Intellectual Property, Competition and the Internet will hold a hearing titled "New Technologies and Innovations in the Mobile and Online space, and the Implications for Public Policy". See, notice. Location: Room 2141, Rayburn Building.

12:00 NOON - 2:00 PM. The DC Bar Association will host a presentation titled "Prometheus Bound -- Analyzing the Current Restraints on Patent Eligible Subject Matter". The speakers will be Jonas Anderson (American University law school), Erika Arner (Finnegan Henderson), Michael Kiklis (Oblon Spivak), and Jeffrey Fougere (Sterne Kessler). The price to attend ranges from $25 to $35. Reporters are barred from attending most DC Bar events. No CLE credits. See, notice. For more information, call 202-626-3463. Location: Paul Weiss, Suite 100, 2001 K St., NW.

1:00 PM. The House Judiciary Committee (HJC) will meet to mark up HR 5949 [LOC | WW | PDF], the "FISA Amendments Act Reauthorization Act of 2012". See, notice. See also, story titled "House Judiciary Committee Takes Up Bill To Extend FISA Outside the US Warrantless Wiretap Authority" in TLJ Daily E-Mail Alert No. 2,396, Location: Room 2141, Rayburn Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed hearing or mark up titled "Intelligence Matters". See, notice. Location: Room 219, Hart Building.

5:00 PM. Deadline to register to attend the Department of Commerce's (DOC) National Institute of Standards and Technology (NIST) event titled "National Cybersecurity Center of Excellence Workshop". See, notice in the Federal Register, Vol. 77, No. 87, Friday, May 4, 2012, at Page 26511-26512.

6:00 - 8:15 PM. The Federal Communications Bar Association (FCBA) will host an event titled "Issues in USF Contribution Reform". CLE credits. See, notice. Location: Wiley Rein, 1776 K St., NW.

Wednesday, June 20

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

8:30 AM - 4:30 PM. The Department of Homeland Security's (DHS) Privacy Office will host an event titled "Privacy Compliance Workshop". The deadline to register is 5:00 PM on Friday, June 15. Location: Federal Trade Commission (FTC) satellite building, 601 New Jersey, Ave., NW.

9:00 - 10:30 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Regulatory Threats to Mobile Health Information Technologies". See, notice. Location: AEI, 1150 15th St., NW.

9:00 - 11:00 AM. The Internal Revenue Service's (IRS) Electronic Tax Administration Advisory Committee (ETAAC) will meet. The deadline to register is Friday, June 15. See, notice in the Federal Register, Vol. 77, No. 102, Friday, May 25, 2012, at Pages 31441-31442. Location: IRS, Room 2140, 1111 Constitution Ave., NW.

9:00 AM - 12:00 NOON. 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, Vol. 77, No. 106, Friday, June 1, 2012, at Pages 32570-32571. Location: NIST, Portrait Room, Administration Building, 100 Bureau Drive, Gaithersburg, MD.

9:30 AM. The House Ways and Means Committee (HWMC) will hold a hearing titled "Russia’s Accession to the World Trade Organization and Granting Russia Permanent Normal Trade Relations". The hearing notice states that the topics to be covered include enforcement of intellectual property rights. Location: Room 1100, Longworth Building.

9:30 - 11:30 AM. The Senate Banking Committee's (SBC) Subcommittee on Securities, Insurance, and Investment will hold a hearing titled "Examining the IPO Process: Is It Working for Ordinary Investors?". The witnesses will be Ann Sherman (DePaul University), Joel Trotter (Latham & Watkins), and Lise Buyer (Class V Group, LLC). See, notice. Location: Room 538, Dirksen Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Oversight of the United States Patent and Trademark Office: Implementation of the Leahy-Smith America Invents Act and International Harmonization Efforts". David Kappos, head of the USPTO will testify. The SJC will webcast this hearing. See, notice. Location: Room 226, Dirksen Building.

12:30 PM. The House Judiciary Committee's (HJC) Subcommittee on Immigration Policy and Enforcement will hold a hearing on HR 2899 [LOC | WW], the "Chinese Media Reciprocity Act of 2011". This bill pertains to visas for employees of the Xinhua News Agency and other PRC state controlled media. See, notice. See also, "More PRC and Taiwan Trade News" in TLJ Daily E-Mail Alert No. 2,305, September 28, 2011. Location: Room 2141, Rayburn Building.

6:00 - 8:00 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host an event titled "Summer Kick Off Happy Hour and Welcome to Interns". For more information, contact Justin Faulb at Faulb at lojlaw dot com or Brendan Carr BrendanTCarr at gmail dot com. Location: Iron Horse Tap Room, 507 7th St., NW.

Thursday, June 21

The House will meet at 9:00 AM for legislative business. See, Rep. Cantor's schedule.

10:00 AM. The House Intelligence Committee (HIC) will hold a closed hearing titled "Ongoing Intelligence Activities". See, notice. Location: Room HVC-304, Capitol Visitor Center.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda again includes consideration Brian Davis (to be a Judge of the USDC/MDFl). See, notice. The SJC will webcast this hearing. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Finance Committee (SFC) will hold a hearing titled "Russia’s WTO Accession - Administration’s Views on the Implications for the United States". See, notice. Location: Room 215, Dirksen Building.

12:15 - 1:45 PM. The Federal Communications Commission's (FCC) will host an event to discuss FCC Chairman Julius Genachowski's "Mobile Action Plan". The speakers will be Renee Wentzel (Legal Advisor to Genachowski) and John Leibovitz (FCC). Lunch will be served. The Federal Communications Bar Association (FCBA) asserts that this is an event of its Wireless Committee. Location: Wiley Rein, 1776 K St., NW.

1:30 PM. The Senate Judiciary Committee's (SJC) Subcommittee on Antitrust, Competition Policy and Consumer Rights will hold a hearing titled "The Universal Music Group/EMI Merger and the Future of Online Music". The witnesses will be Lucian Grainge (Universal Music Group), Roger Faxon (EMI Group), Irving Azoff (Live Nation Entertainment, Inc. and Front Line Management Group), Edgar Bronfman (Warner Music Group Corp.), Martin Mills (Beggars Group Ltd), and Gigi Sohn (Public Knowledge). The SJC will webcast this hearing. See, notice. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed hearing or mark up titled "Intelligence Matters". See, notice. Location: Room 219, Hart Building.

Friday, June 22

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

The American Intellectual Property Law Association (AIPLA) will host an event titled "AIPLA 4th Annual Trademark Boot Camp". For more information, contact aipla at aipla dot org or call 703-415-0780. Location: Alexandria, VA.

Monday, June 25

Deadline to submit to the Federal Communications Commission (FCC) replies to oppositions to the petitions for reconsideration of the FCC's latest Low Power Radio Service order. The FCC adopted and released this Fourth Report and Order and Third Order on Reconsideration on March 19, 2012. It is FCC 12-29 in MB Docket No. 99-25. See, notice in the Federal Register, Vol. 77, No. 105, Thursday, May 31, 2012, at Page 32075. See also, petition of the Educational Media Foundation, petition of Hope Christian Church of Marlton and others, petition of Corner Media, and petition of Kyle Magrill. And see, story titled "FCC Releases Two Items Regarding Local Community Radio Act" in TLJ Daily E-Mail Alert No. 2,351, March 20, 2012.

Deadline for Facebook to respond to the interrogatories propounded by Rep. Ed Markey (D-MA) and Rep. Joe Barton (R-TX) in their June 4, 2012, letter [3 pages in PDF] regarding Facebook's plans to allow children under 13 to use Facebook. See, story titled "Rep. Markey and Rep. Barton Write Facebook Regarding Plans to Target Children" in TLJ Daily E-Mail Alert No. 2,391, June 6, 2012.

Tuesday, June 26

15th anniversary of the Supreme Court's opinion in Reno v. ACLU, 521 U.S. 844 (1997).

8:00 AM - 5:00 PM. The Department of Commerce's (DOC) National Institute of Standards and Technology (NIST) will host an event titled "National Cybersecurity Center of Excellence Workshop". The deadline to register is 5:00 PM on June 19. See, notice in the Federal Register, Vol. 77, No. 87, Friday, May 4, 2012, at Page 26511-26512. Location: Universities at Shady Grove, 9630 Gudelsky Drive, Rockville, MD.