TLJ News from January 6-10, 2008

New York Announces Investigation of Intel

1/10. The Office of the Attorney General of the state of New York announced in a release that it has "served a wide-ranging subpoena seeking documents and information on Intel Corporation".

Andrew Cuomo, the NY Attorney General, stated in this release that "we have determined that questions raised about Intel's potential anticompetitive conduct warrant a full and factual investigation ... Protecting fair and open competition in the microprocessor market is critical to New York, the United States, and the world."

See, full story.

People and Appointments

1/10. Microsoft announced that Jeff Raikes, President of the Microsoft Business Division, will retire after a nine month transition. He will be replaced by Stephen Elop, who was previously Chief Operating Officer (COO) at Juniper Networks. See, Microsoft release.

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1/10. The Federal Communications Commission (FCC) released the agenda for its event on Thursday, January 17, 2008, titled "Open Commission Meeting". The FCC is not scheduled to adopt any items at this meeting. Rather, the five Commissioners will hear status reports from senior officials in various FCC Bureaus and Offices. See, agenda [PDF].

1/10. The National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register that announces, and solicits applications for, planning and construction grants for public telecommunications facilities. The NTIA will distribute $16.8 Million in grants under its Public Telecommunications Facilities Program (PTFP) in FY 2008. This is down from $22 Million in FY 2007. The deadline to submit applications for grants is 5:00 PM on February 22, 2008. See, Federal Register, January 10, 2008, Vol. 73, No. 7, at Pages 1864-1865.

Martin Discusses Recent FCC Rules Changes

1/9. Kevin Martin, Chairman of the Federal Communications Commission (FCC), gave a speech [PDF] in New York City in which he discussed recent FCC rules changes regarding broadband services, video franchising, apartment owners, LPFM, leased access channels, and diversity ownership in broadcasting.

He said that the FCC "has acted to remove regulatory barriers to broadband deployment, and the result has been a significant increase in the number of Americans subscribing to broadband at the same time that the price for broadband services has declined". This, said Martin, has "resulted in a significant closing of the digital divide".

He also said that "The cable industry needs more competition". He denounced "skyrocketing cable rates", while prices for other communications services have declined.

Martin cited two things that the FCC has done that he stated will increase cable competition. First, he said that the FCC has adopted video franchising rules. See also, story titled "FCC Adopts 2nd Report and Order on Video Franchising" in TLJ Daily E-Mail Alert No. 1,668, November 2, 2007.

Second, Martin said that the FCC has adopted rules "prohibiting building owners from denying residents a choice among video service providers". See also, stories titled "FCC Adopts R&O Abrogating Contracts Between MDU Owners and Cable Companies" and "Commentary on FCC's R&O Regarding MDU Owners and Cable Companies" in TLJ Daily E-Mail Alert No. 1,669, November 5, 2007.

Martin also discussed leased access channels. See also, story titled "FCC Adopts R&O and FNPRM Regarding Commercial Leased Access" in TLJ Daily E-Mail Alert No. 1,680, November 30, 2007.

He also discussed recent changes to the FCC's low power FM rules, and FCC rules related to diversity ownership in broadcasting.

Apple Announces iTunes Price Drop in UK Following EC Antitrust Investigation

1/9. The European Commission (EC) and Apple issued releases on January 9, 2008, that pertain to the EC's efforts to regulate the business practices of Apple and various record companies in the distribution of music online.

The EC has in recent years undertaken to regulate U.S. technology companies. The EC asserts, sometimes without merit, that it is applying economic analysis and limiting anti-competitive conduct.

The present EC investigation of Apple and record companies, begun in April of 2007, concerns the pricing and availability of music downloads in European nations. Apple distributes music by national markets, using credit card information to determine the residency of the purchaser.

A United Kingdom group named Which filed a complaint with the EC. It complained that Apple charged slightly more for downloads in the UK than in other European nations.

Price discrimination by geographic market, by category of purchaser, and by other criteria, is a common feature of many industries. For example, the UK's BBC charges significantly more to US consumers than to European consumers for DVD purchases.

The group named Which argued that Apple's charging of different prices in different countries violated "the principles of a single European market".

Apple and the record companies face different copyright regimes in different European nations.

The EC issued only a short news release on January 9, 2008. It praises "Apple's announcement to equalize prices", and states that the EC's "antitrust proceedings have also clarified that it is not agreements between Apple and the major record companies that determine how the iTunes store is organized in Europe. Consequently, the Commission does not intend to take further action in this case."

The EC release also states that this antitrust proceeding finds "that there is no agreement between Apple and the major record companies regarding how the iTunes store is organized in Europe. Rather, the structure of the iTunes store is chosen by Apple to take into account the country-specific aspects of copyright laws."

Apple stated in a release of April 9, 2008, without referencing the antitrust proceeding, that "within six months it will lower the prices it charges for music on its UK iTunes® Store to match the already standardized pricing on iTunes across Europe in Austria, Belgium, Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland and Spain. Apple currently must pay some record labels more to distribute their music in the UK than it pays them to distribute the same music elsewhere in Europe. Apple will reconsider its continuing relationship in the UK with any record label that does not lower its wholesale prices in the UK to the pan-European level within six months."

Chris Warner, of the group named Which, stated in a release that "We complained about Apple's price discrimination back in 2004 -- so we're glad it's finally agreed to give British music lovers a fair deal." He added that "We hope that other internet companies -- including other online music companies -- will now follow Apple's lead and ensure their UK prices are aligned with those in continental Europe." See also, Which's release of September 15, 2004.

Nellie KroesNellie Kroes (at left), the EC Competition Commissioner, stated in the EC release that "The Commission is very much in favor of solutions which allow consumers to benefit from a truly Single Market for music downloads".

Kroes gave a series of speeches late last year in which she offered her take on antitrust based regulation in Europe. See, speech in Barcelona, Spain, on November 19, 2007, titled "Assessment of and perspectives for competition policy in Europe"; speech in Lisbon, Portugal, on November 15, 2007, titled "Helping Europeans get the best deal: a sound competition policy for well-functioning markets"; and speech in Brussels, Belgium, on October 20, 2007, regarding Microsoft's capitulation.

TLJ requested, but did not receive, from the EC any orders or decisions of the EC, or agreements between the EC and Apple, that relate to the just announced disposition.

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1/9. The Motion Picture Association (MPA) announced in a release [PDF] that a trial court in Hong Kong "ordered the forfeiture of five VCD lines, each worth HK$3 million, used to produce pirated VCDs. The forfeiture order was issued after the conclusion of criminal trial and appeal procedures in 2005 when three defendants, including the owners of the factories were sentenced to imprisonment for periods ranging between 21 and 30 months." This forfeiture order came 9 years after the original seizure, in 1998. MPA representatives praised the order.

1/9. The Department of Justice (DOJ) published a notice in the Federal Register that announces, describes, recites, and sets the effective date (January 9, 2008) for, changes to its rules that provide whistleblower protections to Federal Bureau of Investigation (FBI) employees. See, Federal Register, January 9, 2008, Vol. 73, No. 6, at Pages 1493-1495.

USTR Schwab Addresses Trade in Electronics

1/8. Susan Schwab, head of the Office of the U.S. Trade Representative (OUSTR), gave a speech [PDF] in Las Vegas, Nevada, on January 7, 2008, at the annual Consumer Electronics Show (CES) in which she advocated free trade and explained why it is important to the consumer electronics sector.

She stated in the prepared text of her speech that "ninety five percent of the world's consumers live outside the United States. We need to pry open growing markets so U.S. consumer electronic products and services are available to these billions of consumers. We need to promote free trade, not cower from it."

See, full story.

House Commerce Committee Announces Investigation of FCC

1/8. Rep. John Dingell (D-MI) and Rep. Joe Barton (R-TX), the Chairman and ranking Republican on the House Commerce Committee (HCC), and Rep. Bart Stupak (D-MI) and Rep. John Shimkus (R-IL), the Chairman and ranking Republican of the HCC's Subcommittee on Oversight and Investigations (SOI), sent a letter [PDF] to Kevin Martin, Chairman of the Federal Communications Commission (FCC), stating that the HCC and SOI have "initiated a formal investigation into" the FCC's "regulatory procedures to determine if they are being conducted in a fair, open, efficient, and transparent manner".

The letter adds that "This investigation will also address a growing number of allegations received by the Committee relating to management practices that may adversely affect the agency’s operation."

The letter states that HCC "investigators will interview FCC employees and other witnesses in preparation for an oversight hearing this year". It does not set a hearing date.

The letter then proceeds to make a series of blunt and unusual statements. First, the letter requests that Martin "immediately notify all FCC employees of their right to communicate with Congress and that it is against the law to deny or interfere with their rights to furnish information to Congress". (Emphasis in original.)

Second, the letter requests that Martin inform FCC officials that "it is a violation of Federal law to retaliate against whistleblowers".

Third, it requests that Martin "immediately preserve all electronic records, including work e-mail and personal e-mail communications relating to official work of the Commission, and calendars and schedules of all employees".

Finally, it requests that Martin provide "unedited and unredacted copies of this letter to all employees and contractors of the FCC".

See also, December 3, 2007, letter [3 pages in PDF] from Rep. Dingell to Martin, and story titled "Martin Responds to Dingell's Questions About Lack of Transparency at the FCC" in TLJ Daily E-Mail Alert No. 1,686, December 11, 2007.

Bush Signs Bill Regarding Court Security and Federal Judgeships

1/8. President Bush signed into law HR 660 [LOC | WW], the "Court Security Improvement Act of 2007". See, White House release. This bill contains numerous provisions related to court security.

It also contains a provision that allows for increased participation in District Court administration by senior status District Court Judges who perform at least one half of the work of active status Judges.

The bill also amends 28 U.S.C. § 44(a) to increase the number of Judges of the U.S. Court of Appeals (9thCir) from 28 to 29, effective January 21, 2009. That is, it will be left to the next President to appoint someone for this new judgeship.

The bill also decreases the number of Judges of the U.S. Court of Appeals (DCCir) from 12 to 11. The bill does not specify an effective date for this provision.

Peter KeislerPresident Bush first nominated Peter Keisler (at right) to be a Judge of the DC Circuit in 2006. He renominated him at the beginning of the current Congress.

A spokesman for the Senate Judiciary Committee (SJC) stated to TLJ that the Keisler nomination is unaffected by HR 660 because he has been nominated for the 11th seat.

Neither the Department of Justice nor the White House news offices responded to phone calls from TLJ.

People and Appointments

1/8. Nick Simpson was named press secretary in the Office of the Republican Whip, Rep. Roy Blunt (R-MO). Simpson previously worked for former Sen. Trent Lott (R-MS). Simpson replaces Amos Snead, who went to work for FD Dittus Communications, Inc.

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1/8. Microsoft announced in a release that "it will make an offer to acquire" Fast Search & Transfer ASA, a "provider of enterprise search solutions, through a cash tender offer for 19.00 Norwegian kroner (NOK) per share."

1/8. The Government Accountability Office (GAO) released a report [31 pages in PDF] titled "Information Security: IRS Needs to Address Pervasive Weaknesses". The report finds that the Internal Revenue Service (IRS), which "relies extensively on computerized systems", has "made limited progress toward correcting previously reported information security weaknesses". It elaborates that the "IRS continues to, among other things, use passwords that are not complex, grant excessive access to individuals who do not need it, and install patches in an untimely manner". It also states that the IRS fails to "encrypt sensitive data" and "physically protect its computer resources". It concludes that security weaknesses "threaten the confidentiality and availability of its financial and tax processing systems and information, and limit assurance of the integrity and reliability of its financial and taxpayer information". Moreover, the report concludes that the "IRS is at increased risk of unauthorized access to and disclosure, modification, or destruction of financial and taxpayer information".

Supreme Court News

1/7. The Supreme Court issued an order in Quanta Computer v. LG Electronics, Sup. Ct. No. 06-937, a patent infringement case. It wrote that "The motion of petitioners for leave to file a reply brief under seal with redacted copies for the public record is granted." See, Orders List [44 pages in PDF] at page 18. See also,  July 7, 2006, opinion [31 pages in PDF] of the U.S. Court of Appeals (FedCir) and Supreme Court docket. And see, stories titled "Supreme Court Grants Certiorari in Patent Exhaustion Case" in TLJ Daily E-Mail Alert No. 1,647, September 27, 2007, and "Supreme Court to Hear Case Regarding Patent Exhaustion Doctrine" in TLJ Daily E-Mail Alert No. 1,683, December 5, 2007. The Supreme Court will hear oral argument on January 16, 2008.

1/7. The Supreme Court denied certiorari in Semen Leykin v. AT&T, Sup. Ct. No. 07-484. See, Orders List [44 pages in PDF] at page 20. This is dismissed class action securities fraud case arising in the U.S. District Court (NYSD), and appealed to the U.S. Court of Appeals (2ndCir).

1/7. The Supreme Court denied certiorari in Motionless Keyboard v. Microsoft, Sup. Ct. No. 07-574. See, Orders List [44 pages in PDF] at page 38. This is a patent infringement case involving ergonomic keyboards. See, May 29, 2007 opinion [17 pages in PDF] of the U.S. Court of Appeals (FedCir) and Supreme Court docket.

1/7. The Supreme Court denied certiorari in Leo Stoller v. Google, Sup. Ct. No. 07-7043. See, Orders List [44 pages in PDF] at page 25. See, Supreme Court docket.

1/7. The Supreme Court denied certiorari in Tomi Bryan v. BellSouth, Sup. Ct. No. 07-458. See, Orders List [44 pages in PDF] at page 20.

People and Appointments

1/7. Andrea Jung was elected to Apple's Board of Directors. Jung is Ch/CEO of Avon Products, which produces cosmetics for women. She also speaks Mandarin Chinese. See, Apple release.

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1/7. The Federal Communications Commission's (FCC) Public Safety and Homeland Security Bureau (PSHSB) announced that it will host a 911 summit on February 6, 2008, at the FCC building in Washington DC. It stated that the summit will address "issues relating to the deployment and use of Next Generation 911 technology and the coordination of those efforts among Public Safety Answering Points, the telecommunications industry and manufacturers". See, notice and registration page.

1/7. The National Telecommunications and Information Administration (NTIA) issued a release regarding the DTV transition. It states that "more than 250 retailers, representing more than 15,000 outlets nationwide, are certified to participate in a program to aid in the transition to digital television. Also, 19 converter box models are eligible for purchase with the coupon and more are being tested as part of the certification process."

Go to News from January 1-5, 2008.