TLJ News from February 11-15, 2008

5th Circuit to Hold En Banc Review in Volkswagen Transfer Matter

2/15. The U.S. Court of Appeals (5thCir) issued an order [PDF] in In Re Volkswagen granting en banc review of a decision of a three judge panel. At issue is transfer of a case out of the Eastern District of Texas.

The Eastern District of Texas is a court of choice for, among others, certain patent litigation plaintiffs. In many of these cases none of the parties or witnesses have any connection to the Eastern District of Texas. This order is the latest development in a long running contest over Volkswagen's efforts to have the underlying case transferred out of the Eastern District of Texas.

The District Court denied a motion to transfer, and Volkswagen seeks a writ of mandamus from the Court of Appeals.

Sen. Patrick Leahy (D-VT) and Sen. Orrin Hatch (R-UT) wrote a short piece that was published in the Washington Times on February 15, 2008. The two wrote that "Under today's rules, patent cases can be brought virtually anywhere in the country. Plaintiffs can ``forum shop,´´ filing their lawsuits in jurisdictions that have virtually no relevance to the underlying case, but everything to do with where the plaintiff stands the best chance of winning the case. Our bill would prevent this gaming of the system by bringing the standards for selecting venues in line with mainstream jurisprudence."

The two Senators are the current and a former Chairman of the Senate Judiciary Committee (SJC). They are also sponsors of S 1145 [LOC | WW], the "Patent Reform Act of 2007". The SJC approved this bill on July 19, 2007. The full Senate has not approved it.

The House approved HR 1908 [LOC | WW], a different patent reform bill, on July 18, 2007. That bill also addresses jurisdiction and venue in patent cases.

To the extent that the 5th Circuit may be inclined to order transfers of cases to more appropriate fora, the impetus for a legislative change may be diminished.

This proceeding is In Re Volkswagen of America, Inc., U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 07-40058, a petition for writ of mandamus to the U.S. District Court for the Eastern District of Texas, Marshall Division.

People and Appointments

2/15. David Walker, the Comptroller General of the United States, announced his resignation, effective March 12, 2008. He heads the Congress's Government Accountability Office (GAO). He will become head of the newly created Peter G. Peterson Foundation. Gene Dodaro, the GAO's Chief Operating Officer, will become the acting Comptroller General. See, GAO release [PDF] and statement by Rep. Steny Hoyer (D-MD).

2/15. Cecilia Januszkiewicz joined the Free State Foundation (FSF) as Senior Fellow.

More News

2/15. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) issued a release [PDF] regarding the DTV transition in which it announced that it "will begin mailing $40 coupons to consumers next week -- one year from the date of the digital television transition -- to be used to purchase eligible TV converter boxes."

2/15. The Federal Communications Commission (FCC) changed the date and time of its hearing titled "Broadband Network Management Practices", to be held at Harvard Law School. See, notice of change. The FCC changed the date and time from 10:00 AM on February 26, 2008, to 11:00 AM on February 25.

2/15. The Office of the U.S. Trade Representative (OUSTR) published a notice in the Federal Register requesting public comments regarding its negotiation of an anti-counterfeiting trade agreement "to strengthen international cooperation, enforcement practices, and participants' legal frameworks to address counterfeiting and piracy". Comments are due by 5:00 PM on Friday, March 21, 2008. See, Federal Register, February 15, 2008, Vol. 73, No. 32, at Pages 8910-8911.

Bush and House Democrats Continue Standoff Over Surveillance and Telco Immunity

2/14. President Bush spoke and answered questions at the White House regarding his standoff with House Democrats over legislation to reform the Foreign Intelligence Surveillance Act (FISA). See, transcript.

This Saturday, is the extended sunset for S 1927 [LOC | WW], the "Protect America Act", the temporary act passed last August. Also, the House is about to go on its Presidents' Day recess, while the President is about to go on a trip abroad.

The Senate passed a bill on Tuesday that Bush supports, S 2248 [LOC | WW], the "Foreign Intelligence Surveillance Act of 1978 Amendments Act of 2007". And now, he wants the House to pass the Senate bill.

The :House passed a much different bill on November 15, 2007, that Bush vehemently opposes, HR 3773 [LOC | WW], the "Responsible Electronic Surveillance That is Overseen, Reviewed, and Effective Act of 2007" or "RESTORE Act".

Bush said that "This Saturday at midnight, legislation authorizing intelligence professionals to quickly and effectively monitor terrorist communications will expire. If Congress does not act by that time, our ability to find out who the terrorists are talking to, what they are saying, and what they are planning will be compromised. It would be a mistake if the Congress were to allow this to happen."

He added that "The Senate bill will provide fair and just liability protection for companies that assisted in the efforts to protect America after the attacks of September the 11th. Without this protection, without this liability shield, we may not be able to secure the private sector's cooperation with our intelligence efforts."

"The House should not leave Washington without passing the Senate bill." Bush said that "there really is no excuse for letting this critical legislation expire".

He also discussed immunity, which is in the Senate's bill. He said that "people are wondering why companies need liability protection. Well, if you cooperate with the government and then get sued for billions of dollars because of the cooperation, you're less likely to cooperate. And obviously we're going to need people working with us to find out what the enemy is saying and thinking and plotting and planning."

Also, White House news office issued a release and another release on February 14.

Rep. Steny Hoyer (D-MD), the House Majority Leader, stated in a release that "Every Member of Congress knows that our highest duty is to protect America. The President's comments earlier today implying that any one of us is less focused on the security of our nation were wrong, divisive and harmful."

Rep. Steny HoyerRep. Hoyer (at right) said that "The House passed a bill to modernize FISA three months ago. Yet the President insists that a bill passed just this week by the Senate should be rubberstamped, instead of being considered with the deliberation such an important issue deserves."

He continued that "President Bush is making the absolutely untenable claim that our national security will be jeopardized unless Congress immediately acts on the Senate bill".

He also asserted that even "if the PAA expires, the President and our intelligence community have all the tools they need to protect our nation."

On February 13, the House voted on a bill to extend the PAA for three more weeks. President Bush opposed that bill, and threatened to veto it. It failed on a roll call vote in which all of the Republicans who voted, and 34 Democrats, opposed it.

Rep. Nancy Pelosi (D-CA), the Speaker of the House, stated after the vote that "The President and House Republicans refused to support the extension and therefore will bear the responsibility should any adverse national consequences result." See, release.

Also, Rep. John Conyers (D-MI), the Chairman of the House Judiciary Committee (HJC) and sponsor of the RESTORE ACT, shifted blame for delay back from the House to the Bush administration. He said during House debate on February 13 that "We have also been waiting on access to classified documents regarding what telecom companies may have done in recent years to assist the government with surveillance on U.S. citizens outside the bounds of the law at the time."

He said that "Judiciary Committee members -- only some, not all -- just began getting effective access to the classified documents on January 29, after we had been asking for over one year. And the review process is unavoidably somewhat cumbersome and inefficient. Even today, as I stated in my letter to the White House, we still do not have access to numerous critical legal documents." See, transcript.

People and Appointments

2/14. Louis Foreman (CEO of Enventys), Scott Kieff (law professor at Washington University and research fellow at Stanford’s Hoover Institution), and Damon Matteo (VP and Chief Intellectual Property Officer of the Palo Alto Research Center) were named to the U.S. Patent and Trademark Office's (USPTO) Patent Public Advisory Committee (PPAC). See, USPTO release.

2/14. James Johnson (Sutherland Asbill & Brennan), Elizabeth Pearce (Director of the Intellectual Property Group at American International Group, Inc.), and Jeffrey Storie (Decker Jones McMackin McClane Hall & Bates) were named to the U.S. Patent and Trademark Office's (USPTO) Trademark Public Advisory Committee (TPAC). See, USPTO release.

2/14. President Bush nominated William Lawrence to be a Judge of the U.S. District Court for the Southern District of Indiana. See, White House release.

More News

2/14. The Federal Communications Commission (FCC) published a notice in the Federal Register that announces, describes, and recites (but does not set the effective date of) its new rules setting wireless E911 Phase II location accuracy and reliability mandates. The FCC adopted its Report and Order (R&O) on September 11, 2007. It did not release the text of this R&O until November 20, 2007. This item is FCC 07-166 in PS Docket No. 07-114, CC Docket No. 94-102, and WC Docket No. 05-196. See, Federal Register, February 14, 2008, Vol. 73, No. 31, at Pages 8617-8625.

2/14. The The Federal Communications Commission (FCC) released an Order on Reconsideration [9 pages in PDF] in its proceeding titled "In the Matter of Rural Health Care Support Mechanism". This item grants in part the petition for reconsideration of the American Telemedicine Association (ATA) regarding the FCC's Rural Health Care Support Mechanism Second Report and Order. It states that "we grant ATA's Petition for Reconsideration in part and extend for three years the Commission’s prior determination to grandfather those health care providers who were eligible under the Commission’s definition of ``rural´´ prior to the Second Report and Order." This item is FCC 08-47 in WC Docket No. 02-60.

Rep. Markey Introduces Network Neutrality Bill

2/13. Rep. Ed Markey (D-MA) and Rep. Chip Pickering (R-MS) introduced HR 5353 [LOC | WW], the "Internet Freedom Preservation Act of 2008", a bill pertaining to network neutrality.

Introduction. Markey wrote in a statement that "The goal of this bipartisan legislation is to assure consumers, content providers, and high tech innovators that the historic, open architecture nature of the Internet will be preserved and fostered. H.R. 5353 is designed to assess and promote Internet freedom for consumers and content providers."

Rep. Ed MarkeyMarkey (at right) continued that "Internet freedom generally embodies the notion that consumers and content providers should be free to send, receive, access and use the lawful applications, content, and services of their choice on broadband networks, possess the effective right to attach and use non-harmful devices to use in conjunction with their broadband services, and that content providers not be subjected to unreasonably discriminatory practices by broadband network providers."

The bill would do two things. First, it would amend the Communications Act of 1934 to state that "It is the policy of the United States" to maintain freedom to use broadband networks "without unreasonable interference from or discrimination by network operators", and to preserve and promote the open and interconnected nature of broadband networks. However, the bill does not set forth what the meaning or legal consequences of a policy statement is.

Second, the bill would require the FCC to conduct a study of broadband networks and services. While this is only a study, its findings might serve as the basis for future legislation. Also, it is notable that the bill would require the FCC go beyond its usual notice and comment procedure. The bill would require the five Commissioners to hold "summits" around the country.

See, full story.

FTC Releases Report on Consumer Fraud

2/13. The Federal Trade Commission (FTC) released a report [92 pages in PDF] titled "Consumer Fraud and Identity Theft Complaint Data: January -- December 2007".

This report states that "the FTC received over 800,000 Consumer Sentinel complaints during calendar year 2007", and that 32% of these complaints related to identity theft. It elaborates that "Credit card fraud (23%) was the most common form of reported identity theft followed by phone or utilities fraud (18%), employment fraud (14%) and bank fraud (13%)."

The report also states that "Consumers reported losses from fraud of more than $1.2 billion."

Top Categories of
Consumer Complaints in 2007

Category Number %
Identity Theft 258,427 32
Shop-at-Home/Catalog Sales 62,811 8
Internet Services 42,266 5
Foreign Money Offers 32,868 4
Prizes/Sweepstakes & Lotteries 32,162 4
Computer Equipment & Software 27,036 3
Internet Auctions 24,376 3
Health Care Claims 16,097 2
Travel, Vacations, & Timeshares 14,903 2

For identity theft, 32 percent of all complaints represents a decline from the previous year. Moreover, this is the fourth straight decline. The FTC previously reported that the data for 2002, 2003, 2004, 2005, and 2006 for identity theft were 40%, 42%, 39%, 37%, and 36%, respectively.

See, 2002 report [PDF], 2003 report [PDF], 2004 report [PDF], 2005 report [PDF], and 2006 report [PDF]. See also, stories titled "FTC Releases Data on Consumer Complaints Regarding Fraud and Identity Theft in 2004" in TLJ Daily E-Mail Alert No. 1,068, February 2, 2005, and "FTC Releases Report on Fraud and Identity Theft" in TLJ Daily E-Mail Alert No. 822, January 23, 2004.

The FTC reports also show trends in how fraudulent businesses contact consumers. The use of e-mail is on the rise, while the use of mail and telephone is on the decline.

Senate Passes Its FISA Bill, While House Rejects 21 Day Extension Bill

2/13. On February 12, 2008, the Senate passed its Foreign Intelligence Surveillance Act (FISA) reform bill (S 2248). On Wednesday, February 13, 2008, the House rejected a bill (HR 5349) to extend the Protect America Act (PAA) for another 21 days. The PAA is set to expire on Saturday, February 15, 2008.

Senate Action. On February 12, the Senate approved S 2248 [LOC | WW], the "Foreign Intelligence Surveillance Act of 1978 Amendments Act of 2007". The vote was 68-29. All of the votes against S 2248 were cast by Democrats. All of the votes in favor of Sen. Chris Dodd's (D-CT) amendment (Amendment No. 3907) to delete the immunity title, which failed, were cast by Democrats. See, Roll Call No. 20.

President Bush hailed this as a "bipartisan" vote, notwithstanding the high statistical correlation between party affiliation on vote.

Early in the day, the Senate rejected a series of amendments, including one that would have removed language that provides immunity for companies that have cooperated with the government. See also, story titled "Senate Rejects Efforts to Remove Immunity Language from FISA Bill" in TLJ Daily E-Mail Alert No. 1,716, February 12, 2008.

See, full story.

Yahoo Writes Shareholders

2/13. Jerry Yang, CEO of Yahoo, sent a letter to Yahoo shareholders regarding Microsoft's February 1, 2008, offer to acquire Yahoo. He wrote that "your Board of Directors ... believes that Microsoft's proposal substantially undervalues Yahoo! and is not in the best interests of our stockholders"

"Yahoo! is an attractive partner for marketers", wrote Yang. "The global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010. And we are moving quickly to take advantage of what we see as a unique window of time in the growth - and evolution - of this market to build market share and to create value for stockholders."

He focused on what Yahoo is doing now, and what its business plans are. He did not address Microsoft's offer, or what would be the consequences of acquisition by Microsoft.

See also, stories titled "Microsoft Makes Offer to Acquire Yahoo" in TLJ Daily E-Mail Alert No. 1,710, February 4, 2008, and "Yahoo Asserts Microsoft Offer Undervalues Yahoo" in TLJ Daily E-Mail Alert No. 1,715, February 11, 2008.

DOJ Approves Bain/THL Clear Channel Acquisition Subject to Divestitures

2/13. The Department of Justice's (DOJ) Antitrust Division filed a civil complaint in U.S. District Court (DC) against Bain Capital (Bain), Thomas H. Lee Partners (THL), and Clear Channel Communications to block the proposed acquisition of a controlling interest in Clear Channel by Bain and THL.

The DOJ also simultaneously filed a proposed settlement that would permit the acquisition, subject to divestiture of radio stations in four cities where Bain and THL own interests in competitors of Clear Channel.

Thomas Barnett, Assistant Attorney General in charge of the Antitrust Division, stated in a release that "Without the divestitures obtained by the Department, advertisers that rely on radio advertising in the affected cities likely would have faced higher prices ... The divestitures will ensure that advertisers will continue to receive the benefits of competition."

On January 24, 2008, the Federal Communications Commission (FCC) adopted and released a Memorandum Opinion and Order (MO&O) [46 pages in PDF] that approves the transfer of control of Clear Channel Communications (CCC) from its public shareholders to private equity funds controlled by Bain and HLP, subject to conditions, including the divestiture of 42 radio stations.

See, "More News" section of TLJ Daily E-Mail Alert No. 1,705, January 28, 2008. See also, the FCC's web page for this Clear Channel acquisition. The FCC's proceeding is Docket No. 06-226.

More News

2/13. The U.S. Court of Appeals (6thCir) issued its opinion [6 pages in PDF] in Quick Communications v. Michigan Bell, an interconnection case involving 47 U.S.C. § 252. The Court of Appeals affirmed the summary judgment of the District Court for Michigan Bell (that is, AT&T). The District Court previously upheld an order of the Michigan Public Services Commission that directed Quick and AT&T to amend their interconnection agreement to conform with the MPSC's most recently approved service rates. This case is Quick Communications v. Michigan Bell Telephone Company, et al., U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 06-2103, an appeal from the U.S. District Court for the Eastern District of Michigan at Detroit, D.C. No. 05-72396, Judge Marianne Battani presiding. Judge Boyce Martin wrote the opinion of the Court of Appeals, in which Judges Clay and Guy joined.

2/13. President Bush signed HR 5140 [LOC | WW], the "Recovery Rebates and Economic Stimulus for the American People Act". This act provides individual tax rebates. President Bush said at a White House signing ceremony that it is "an economic growth package". See, transcript.

2/13. Sandra Braunstein, Director of the Federal Reserve Board's (FRB) Division of Consumer and Community Affairs, testified before the House Financial Services Committee regarding the Community Reinvestment Act. She wrote in her prepared testimony, among other things, that "advances in technology have redefined nearly every aspect of the industry -- from loan underwriting to product delivery -- with computers changing these and many other processes in ways unimaginable two decades ago". She then focused on the use of information technology in credit scoring.

2/13. The Federal Communications Commission (FCC) published a notice in the Federal Register that announces, describes, and sets comment deadlines for, its Report on Broadcast Localism and Notice of Proposed Rulemaking. The FCC adopted this item on December 18, 2007, and released the text on January 24, 2008. It is FCC 07-218 in MB Docket No. 04-233. Initial comments are due by March 14, 2008. Reply comments are due by April 14, 2008. See, Federal Register, February 13, 2008, Vol. 73, No. 30, at Pages 8255-8259. See also, FCC's Public Notice [PDF] (DA 08-393).

Inouye and Dingell Propose Interagency DTV Task Force

2/12. Sen. Daniel Inouye (D-HI) and Rep. John Dingell (D-MI) sent a letter [PDF] to President Bush urging him "to establish immediately a federal inter-agency taskforce to oversee the transition to digital television".

They wrote that "The burden of the DTV transition will fall predominantly on the poor, elderly, and minorities. In 2005, the Government Accountability Office (GAO) found that 21 million homes -- nearly one in five of all television-equipped households -- rely on free, over-the-air broadcasts for television service. Of these households, almost half have annual incomes of less than $30,000, one-third is headed by an individual over age 50, and one-third is headed by a native Spanish speaker. Clearly, those expected to be most affected by the transition will also be the most difficult to reach."

Sen. Inouye, the Chairman of the Senate Commerce Committee (SCC), and Rep. Dingell, the Chairman of the House Commerce Committee (HCC), offered this recommendation. "Different federal agencies have relationships with specific categories of constituents, which can be optimized to help publicize the transition. For example, the Department of Veterans Affairs could reach out to veterans, the Social Security Administration could inform senior citizens, the Bureau of Indian Affairs could educate Native American communities, the Federal Trade Commission could adapt consumer alert programs, and the Department of Housing and Urban Development could notify low-income families across the country."

The SCC postponed its hearing titled "One Year to the DTV Transition: Consumers, Broadcasters, and Converter Boxes", which has been scheduled for February 14. See, notice.

The HCC's Subcommittee on Telecommunications and the Internet held a hearing on February 13 titled "Status of the DTV Transition: 370 Days and Counting". The witnesses were be Kevin Martin (FCC Chairman), Meredith Baker (acting head of the NTIA), Kyle McSlarrow (head of the National Cable & Telecommunications Association), David Rehr (head of the National Association of Broadcasters), Ron Bruno (head of the Community Broadcasters Association), Mark Jackson (President of Echostar), Tom Romeo (IBM), Laurence Harris (Radio Shack), and Chris Murray (Consumers Union).

Martin wrote in his prepared testimony [19 pages in PDF] that "too many Americans remain confused about what they need to do to prepare for" the DTV transition. He said too that the FCC "is devoting significant resources to facilitate a smooth transition".

Baker wrote in her prepared testimony [5 pages in PDF] about the progress of the NTIA's converter box coupon program and other NTIA activities.

The NAB's Rehr used this opportunity to again express broadcasters' opposition to unlicensed use of TV white space. He wrote in his prepared testimony [PDF] that "Some Silicon Valley companies want to allow millions of portable, unlicensed transmitting devices to operate on television frequencies without a license." This, he warned, could cause interference. He also discussed NAB efforts to inform consumers about the DTV transition.

McSlarrow, in his prepared testimony [6 pages in PDF], reiterated the cable industry's "firm and long-held view about the constitutional infirmities of a government-mandated regime that requires cable operators to carry all must carry broadcast stations in both digital and analog formats", and its concern's with the FCC's September order. See also, story titled "Cable Programming Networks Challenge FCC's September Viewability Order" in TLJ Daily E-Mail Alert No. 1,716, February 12, 2008. McSlarrow also discussed the NCTA's participation in efforts to inform consumers about the DTV transition.

See also, HCC web page with hyperlinks to the prepared testimony of all witnesses.

EPIC Pursues FTC for Records Related to Majoras's Alleged Conflict of Interest

2/12. The Electronic Privacy Information Center (EPIC) filed with the Federal Trade Commission (FTC) an administrative appeal [17 pages in PDF] of the FTC's denial by inaction of its requests for records under the Freedom of Information Act (FOIA) regarding what it asserts is a conflict of interest for FTC Chairman Deborah Majoras.

Deborah MajorasThe EPIC seeks records related to the law firm of Jones Day's representation of DoubleClick, and whether this warranted recusal by Majoras (at right) in the Google DoubleClick merger proceeding.

Persons seeking records from government agencies must exhaust their administrative remedies before bringing a civil action in the U.S. District Court for violation of the FOIA, which is codified at 5 U.S.C. § 552.

The EPIC, which opposed the Google DoubleClick merger on privacy grounds, submitted a filing [PDF] to the FTC on December 12, 2007, requesting the recusal of Majoras from the review of the proposed merger. The EPIC argued that recusal is necessary because Majoras previously worked for the law firm of Jones Day, her husband John Majoras still does, and Jones Day represents DoubleClick. See, story titled "EPIC Seeks Recusal of Majoras in Google Doubleclick Merger Review" in TLJ Daily E-Mail Alert No. 1,688, December 13, 2007.

The EPIC also submitted a FOIA request [PDF] for records on December 14, 2007, and a second request on December 17, related to its recusal request. Both requests are also attached to the administrative appeal.

The EPIC requested, among other things, "all communications, policy memoranda, reports, legal assessments and other documents regarding the participation of the law firm Jones Day, any employee or agent of the law firm Jones Day, or any spouse of an employee of the law firm Jones Day regarding the Federal Trade Commission’s investigation, review, consideration, or assessment of the proposed Google-Doubleclick merger."

The EPIC also sought FTC records pertaining to Jones Day and FTC consumer privacy complaints and FTC enforcement of consumer privacy law.

On December 20, the FTC announced that it will not seek to block the proposed merger of Google and DoubleClick, or impose any conditions upon the merger. Chairman Majoras participated in that determination. See, story titled "FTC Will Not Block Google DoubleClick Merger" in TLJ Daily E-Mail Alert No. 1,691, December 19, 2007.

The EPIC wrote in its appeal that "The urgency to inform the public regarding an apparent conflict of interest in the FTC’s review of a multi-billion dollar merger is manifest. In addition, the public has demonstrated substantial interest regarding the subject of EPIC’s FOIA Requests. A Google search performed on February 1, 2008 returns 20,600 results for the search ``google doubleclick ftc conflict of interest.´´"

The EPIC added that it "appears that the Commission may soon face a similar decision if it is given merger review authority over the pending Microsoft acquisition of Yahoo."

The FOIA establishes time limits within which agencies must comply with FOIA requests. The FTC has not provided responsive agency records within the time limitations. It has violated the FOIA by failure to respond.

Violation of statutory obligations imposed by the FOIA is routine practice at most federal agencies. Moreover, federal courts routinely decline to enforce the FOIA, notwithstanding the plain language of the statute, and its creation of a private right of action for FOIA requestors. Nevertheless, the EPIC frequently submits FOIA requests, and then litigates non-compliance.

Senate Rejects Efforts to Remove Immunity Language from FISA Reform Bill

2/12. The Senate continued its consideration of S 2248 [LOC | WW], the "Foreign Intelligence Surveillance Act of 1978 Amendments Act of 2007", holding several roll call votes.

Title II of the bill provides for immunity of service providers who have cooperated with the government in facilitating surveillance under the FISA. The Senate rejected an amendment to strike the immunity for service providers language. It also rejected Sen. Arlen Specter's (R-PA) proposal to provide substitution of the government for service providers, rather than immunity, in civil actions against service providers.

The Senate also approved a cloture motion.

The Senate rejected Amendment No. 3910 offered by Sen. Dianne Feinstein (D-CA) by a vote of 57-41. See, Roll Call No. 13. A three fifths majority was required for approval of this amendment. This amendment provides a statement of the exclusive means by which electronic surveillance and interception of certain communications may be conducted.

The Senate rejected Amendment No. 3979 offered by Sen. Russ Feingold (D-WI) by a vote of 35-63. See, Roll Call No. 14. This amendment provides safeguards for communications involving persons inside the U.S.

The Senate rejected Amendment No. 3907 offered by Sen. Chris Dodd (D-CT) by a vote of 31-67. See, Roll Call No. 15. This amendment provides for striking Title II, the immunity provision.

The Senate rejected Amendment No. 3912 offered by Sen. Feingold by a vote of 37-60. See, Roll Call No. 16. This amendment modifies the requirements for certifications made prior to the initiation of certain acquisitions.

The Senate rejected Amendment No. 3927 offered by Sen. Specter by a vote of 30-68. See, Roll Call No. 17. The amendment provides for the substitution of the U.S., rather than immunity, in certain civil actions.

The Senate rejected Amendment No. 3919 offered by Sen. Feinstein by a vote of 41-57. See, Roll Call No. 18. This amendment provides for the review of certifications by the Foreign Intelligence Surveillance Court (FISC).

Finally, the Senate approved a cloture motion by a vote of 69-29. See, Roll Call No. 19.

On February 11, 2008, Ed Black, head of the Computer & Communications Industry Association (CCIA), sent a letter to Senators urging them not to include retroactive immunity in FISA reform legislation. He expressed "opposition to granting retroactive immunity, amnesty, or pardon to companies accused in United States courts of serious violations of law in connection with extensive wiretapping of U.S. citizens".

Black wrote that "prior to any grant of retroactive immunity, a full accounting of the actions taken by key government officials and the major carriers is essential.  The facts about the nature and scope of cooperation need to be understood, as do the motives and rationales of the various public and private officials involved."

On February 8, 2008, Timothy Lee, an Adjunct Scholar at the Cato Institute, wrote an essay titled "The Surveillance Scam". He wrote that former President Bill Clinton, like President Bush, "was also an ardent supporter of increased wiretapping authority", who sought expanded wiretap authority in 1996. However, the Congress did not pass a bill at that time.

Lee argues that "Today's Democratic Congress has been far less protective of Americans' privacy rights. Last August, in a virtual repeat of the events of 1996, Bush demanded that Congress approve expanded wiretapping powers before going on vacation. This time, Congressional leaders showed few qualms about ``rushing to judgment.´´ Indeed, both houses of Congress approved the White House's preferred legislation with minimal changes within three days of its introduction."

Lee also argues that the bill passed last August, S 1927 [LOC | WW], the "Protect America Act", "allows the administration to ``authorize´´ eavesdropping programs for a year at a time. That means that the government's various warrantless surveillance activities will continue to operate at least through August. And of course, if the need for new wiretaps arises after the act sunsets, the administration still has the opportunity to file for warrants" under the FISA, and that the FISA "even allows the government to begin surveillance first and apply for an emergency warrant after the fact."

Martin Writes Regarding DTV Transition and Analog Broadcasts of Low Power TV Stations

2/12. Federal Communications Commission (FCC) Chairman Kevin Martin sent a letter [2 pages in PDF] to the National Association of Broadcasters (NAB), National Cable and Telecommunications Association (NCTA), Satellite Industry Association (SIA), Consumer Electronics Association (CEA), and the Consumer Electronics Retailers Coalition (CERC) regarding the DTV transition and analog signals of low power TV stations.

He wrote that after February 17, 2009, many low power TV stations will continue their analog broadcasting. He also said that many of the converter boxes do not include an analog pass through feature, and hence, some people will not view these low power stations.

He noted "We have proposed a goal of 2012 for all low power stations to transition to digital". He then either encouraged or requested that the recipients of his letter take certain actions while low power TV stations continue their analog broadcasts.

First, for the NAB, Martin encouraged "full power broadcast stations to voluntarily partner with low power stations and clear their signals to the extent they have excess digital capacity". He added that "This could be accomplished by using a portion of the digital capacity allocated to the full power broadcaster for digital operations and the full power broadcaster's existing facilities. Stations participating in such arrangements should be made whole, and reimbursed for their costs."

For the NCTA and SIA, he encouraged "cable systems and DBS operators to offer expanded carriage of stations in the low power television service on a voluntary basis where they have the capacity."

For the CEA and CERC, he encouraged consumer electronics manufacturers "to implement analog pass-through in all of their converter boxes". He and requested that manufacturers "produce and make widely available to the public at least one box that is able to pass-through analog signals". Also, he requested that retailers "carry at least one such box in their stores and offer such boxes for online purchase".

Also on February 13, the U.S. Public Interest Research Group (USPIRG) released a report titled "Mixed Signals: How TV Retailers Mislead Consumers on the Digital Television (DTV) Transition", in which it asserts that "retail electronic store staff are largely uninformed and are not adequately preparing consumers for the impending transition to digital television". See, summary and full report [14 pages in PDF].

Also on February 13, FCC Commissioner Michael Copps gave a speech praising the USPIRG. He also complained that the federal government does not have either a "real national DTV plan" or a "federal interagency task force".

People and Appointments

2/12. President Bush withdrew his nomination of Warren Bell to be a Member of the Board of Directors of the Corporation for Public Broadcasting. See, White House release.

2/12. Mark Hurd, Ch/CEO of Hewlett-Packard, was appointed to the News Corporation's Board of Directors, effective immediately. Rod Paige resigned from the News Corporation's Board of Directors. See, release.

More News

2/12. Ken Ferree wrote a short essay [PDF] titled "Judgment Day" in which he criticizes the Federal Communications Commission's (FCC) antitrust merger review process. He wrote that it has "slowed nearly to a standstill" and that "needlessly delaying pro-competitive combinations deprives consumers of the benefits that flow from free and full competition". Ferree is head of the Progress & Freedom Foundation (PFF). He was Chief of the FCC's Cable Services Bureau when Michael Powell was FCC Chairman.

2/12. The Federal Communications Commission (FCC) announced that it will hold a hearing on February 26, 2008, at 10:00 AM, in Boston, Massachusetts, titled "Broadband Network Management Practices". See, notice. This hearing also pertains to FCC Docket Numbers 07-52 and 08-7. This event will take place at the Ames Courtroom at Harvard Law School, 1515 Massachusetts Ave., Boston, Massachusetts.

2/12. The National Intellectual Property Law Enforcement Coordination Council released a report [101 pages in PDF] titled "Annual Report to the President and Congress on Coordination of Intellectual Property Enforcement and Protection". It states that the Bush administration is committed to stopping counterfeiting and piracy of intellectual property.

IIPA Submits Special 301 Comments

2/11. February 11, 2008 was the deadline for all parties except foreign governments to submit comments to the Office of the U.S. Trade Representative (OUSTR) to assist it in making Special 301 identifications of countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection.

The International Intellectual Property Alliance's (IIPA) submitted a huge report to the OUSTR titled "2008 Special 301 Report". See especially, summary data [2 pages in PDF] on piracy loses and levels by country.

The IIPA represents several U.S. copyright based industry groups, including the American Association of Publishers (AAP), Business Software Alliance (BSA), Recording Industry Association of America (RIAA), and Motion Picture Association of America (MPAA).

The IIPA report recommends that 13 countries be placed on the OUSTR's Priority Watch List, including the People's Republic of China, Russia, India, Canada, and Mexico. It recommends that another 29 countries be placed on the OUSTR's Watch List.

The report states that "Online copyright piracy, a serious problem for the past several years, is undergoing explosive growth. As improved mobile devices proliferate in every market and become ever more capable of transmitting and receiving copyrighted works, and as access to broadband networks becomes more ubiquitous around the globe, these new technologies are all too often placed at the service of piracy. Legitimate markets for electronic commerce in copyrighted works are being undermined -- and in some cases prevented from coming into existence at all -- by a flood of unauthorized copies of sound recordings, entertainment and business software, literary material, and motion pictures. The Internet, and other networks linking mobile devices, are being employed as highly efficient, low cost networks for infringing activity, reaching any part of the world with ease, no matter where infringing material first enters the system." (See, cover letter [18 pages in PDF] of Eric Smith, head of the IIPA.)

"Consequently," wrote Smith, "the U.S. copyright industries face the daunting task of trying to enforce their legal rights in an online world where borders and distances have decreasing practical significance."

The report states that the U.S. must engage foreign governments and encourage them to upgrade their "enforcement systems to meet their international obligations by adopting effective remedies and imposing deterrent penalties".

The report also argues that "regimes of secondary liability for online infringement are essential".

The report concludes that "The Special 301 process must specifically target enforcement in a direct and clear way. Many countries believe that Special 301 ranking decisions can be made on the basis of law reform, followed by enforcement ``promises´´ alone. Experience has taught us that this simply has not worked. Countries should be made acutely aware that they will not see a change in their Special 301 placement unless they take the specific enforcement actions necessary that actually reduce piracy rates (and, conversely, that they will see a change in placement when such actions are in fact undertaken)." (Parentheses in original.)

The AAP, a member of the IIPA, stated in a release that the "AAP and its sister organization in the UK have continued their engagement with China over the past year, especially regarding organized textbook piracy on China's university campuses and Internet infringements affecting professional and scholarly publishers. While 2007 saw progress made on the textbook piracy issue, China has still failed to implement key notices regarding textbook piracy issued over a year ago, and the threat of Internet piracy is growing daily. Chinese authorities need to find more efficient ways to tackle this problem."

Patricia Schroeder, head of the AAP, and a former member of the House Judiciary Committee (HJC), stated that the piracy of books and journals "stunts economic growth in the U.S. and abroad by harming industries that play a central role in that growth. In addition to the problems of illegal photocopying and print piracy that we are already battling, digital online and mobile piracy are mounting menaces, and are therefore highlighted in several ways in this year’s report. Increases in broadband penetration, online offerings of books and journals and the popularity of mobile devices make this ever-lurking problem an increasingly immediate threat for our industry. It is imperative that the gaps in protection highlighted in this report are mended, to ensure efficient mechanisms for tackling the myriad problems our industry will face in 2008."

Robert Holleyman, head of the BSA, another IIPA member, stated in a release that "Piracy remains the software industry’s largest trade barrier, costing the industry nearly $40 billion per year."

Neil Turkewitz of the RIAA stated in a release that in addition to online piracy, there remains "old-fashioned piracy", including "CD-R burning and illegal optical disc production by organized criminal enterprises. Many markets continue to be dominated by piracy, including in particular China where piracy rates remain at more than 90 percent of the market, and Russia where despite some gains in reducing physical piracy, U.S. record labels continue to lose more than $300 million a year in a marketplace where over half of the records sold are pirate copies."

He also cited "Canada's continued failure to amend its copyright law to meet the challenges of new technologies, despite repeated calls from Canada's domestic copyright community, producers, creators and unions, and numerous promises by the Government that they would do so".

The IIPA report does not recommend placing Japan on either the Priority Watch List or the Watch List. However, its section on Japan [3 pages in PDF] does state that "Japan faces a serious and growing problem of online copyright piracy. All forms of copyright materials, such as musical recordings, audio-visual materials, business software, and book and journal publications, are suffering from widespread infringement via peer to peer (p2p) and mobile services. The motion picture industry reports that 80% of pirated DVDs and other optical media products sold by street vendors (some of them involved with Yakuza organized crime groups), or via Internet auction sites, originate from p2p downloading." (Parentheses in original.)

The report encourages the U.S. government to engage the Japanese government on various legislative, regulatory and enforcement related matters.

The IIPA report recommends placing Taiwan on the Watch List. The section on Taiwan [9 pages in PDF] states that "Internet piracy continues to be the most urgent problem in Taiwan", and that "Taiwan must quickly adopt its ISP bill establishing clear secondary liability for ISPs. This would foster better cooperation among right holders and the ISP community. Internet piracy must be made a public crime."

See also, story titled "OUSTR Seeks Special 301 Comments on Countries that Deny Adequate IPR Protection" in TLJ Daily E-Mail Alert No. 1,703, January 22, 2008, and notice in the Federal Register, January 16, 2008, Vol. 73, No. 11, at Pages 2958-2959.

FCC Releases Order and NPRM on Cable Ownership Cap

2/11. The Federal Communications Commission (FCC) released the text [96 pages in PDF] of its Fourth Report and Order and Further Notice of Proposed Rulemaking (4th R&O and FNPRM) in its proceeding regarding cable ownership caps.

The R&O portion of this item sets the FCC's cable horizontal ownership limit to "prohibit cable operators from owning or having an attributable interest in cable systems serving more than 30 percent of multichannel video programming subscribers nationwide".

The NPRM portion of this item requests comments on the following: "(1) whether to retain the single majority shareholder attribution exemption, which currently applies to the cable and broadcast ownership rules; (2) whether, under the cable attribution rules, a limited partner may sell programming to the partnership and retain insulation; and (3) whether the Commission should clarify certain aspects of the cable Equity Debt (“ED”) attribution rule, as it did for the broadcast Equity/Debt Plus attribution rule." (Footnote omitted.)

It also requests comments on "an appropriate channel occupancy limit".

Kyle McSlarrow, head of the National Cable & Telecommunications Association (NCTA), stated in a release on December 18, 2007, that "in 2001, the U.S. Court of Appeals soundly rejected on First Amendment grounds the precise cable ownership cap that the Commission adopted again today. The Court of Appeals found such a cap to be unjustified and out of touch with the competitive marketplace as it existed six years ago. In the intervening years, competition among satellite, telephone and cable companies and the variety and amount of independent programming has only increased.

McSlarrow added that "We are confident that a court will again reject conclusions driven by a political agenda to target the cable industry that are completely at odds with the realities of a dynamic and competitive marketplace that is providing greater consumer choice and value."

On March 2, 2001, the U.S. Court of Appeals (DCCir) issued its opinion in Time Warner Entertainment v. FCC overturning the FCC's cable ownership caps on First Amendment grounds. The opinion is reported at 240 F.3d 1126.

That case is Time Warner Entertainment, Petitioner v. Federal Communications Commission and United States of America, Respondents; BellSouth, et al., Intervenors, U.S. Court of Appeals for the District of Columbia, App. Ct. No. 94-1035, consolidated with 95-1337, 99-1503, 99-1504, 99-1522, 99-1541, 99-1542, and 00-1086.

FCC Commissioner Michael Copps wrote that "Although the percentage cap remains the same, the underlying economic justification is quite different and is, I believe, completely responsive to the issues raised by the D.C. Circuit Court."

FCC Commissioner Jonathan Adelstein wrote that the order's "focus is trained particularly on the potential influence of cable operators on the upstream programming market. The Order finds that a large cable operator would have the power to significantly undermine the viability of a reasonably popular programming network by refusing to carry it, despite the competitive pressures of DBS and other providers. It is apparent that video programming delivery involves an intricate web of relationships, and this Order attempts to boil these down into an appropriate horizontal limit. Given the contentious nature of this proceeding and its history in the courts, we put our best foot forward in defense of this difficult task."

FCC Commissioner Robert McDowell dissented. He argued that this is the same order the the DC Circuit overturned seven years ago. Moreover, he wrote, it "goes out of its way to remain ignorant of current market conditions which obviate a need for a cap. And the order is wanting for any sustainable legal or evidentiary justification to trample on the First Amendment, in defiance of the court’s 2001 warning."

He wrote unequivocally. "This order will be overturned by the D.C. Circuit." (Emphasis in original.)

McSlarrow also wrote that "We are pleased that a majority of Commissioners again rejected a plan to consider a multicast must carry mandate. Consumers will be better served if we could all focus on getting ready for the digital broadcast transition instead of repeatedly having to reject stale ideas that would harm consumers, undermine the digital transition and violate the Constitution."

The FCC adopted, but did not release, this item on December 18, 2007. It is FCC 07-219 in MM Docket No. 92-264, CS Docket No. 98-82, CS Docket No. 96-85, MM Docket No. 94-150, MM Docket No. 92-51, and MM Docket No. 87-154.

Initial comments in response to the NPRM portion of this item will be due 30 days after publication of a notice in the Federal Register. Reply comments will be due within 45 days of such publication. As of the February 12, 2008, issue of the Federal Register, this notice had not yet been published.

Yahoo Asserts Microsoft Offer Undervalues Yahoo

2/11. Yahoo stated in a release that its "Board of Directors has carefully reviewed Microsoft's unsolicited proposal with Yahoo!'s management team and financial and legal advisors and has unanimously concluded that the proposal is not in the best interests of Yahoo! and our stockholders."

Yahoo asserted that "Microsoft's proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments."

Finally, Yahoo stated that the board "is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders."

On February 1, 2008, Microsoft announced its offer of $31 per share. Prior to announcement of the offer, Yahoo stock traded at $19. See, story titled "Microsoft Makes Offer to Acquire Yahoo" in TLJ Daily E-Mail Alert No. 1,710, February 4, 2008.

People and Appointments

2/11. Rep. Tom Lantos (D-CA) died. He was the Chairman of the House Foreign Affairs Committee. See, statement by President Bush.

Go to News from February 6-10, 2008.