TLJ News from May 16-20, 2011

FCC Releases 7th Section 706 Report

5/20. The Federal Communications Commission (FCC) adopted and released the seventh in a series of reports required by Section 706 of the Telecommunications Act of 1996 regarding "the availability of advanced telecommunications capability".

This report [99 pages in PF] concludes that because "26 million Americans live in areas unserved by broadband", and because "approximately one-third of Americans do not subscribe", "broadband is not being deployed in a reasonable and timely fashion".

This report's conclusion was predictable, because it was necessary for the Commission's majority to continue their goal of instituting a regulatory regime for, among other things, broadband internet access service (BIAS) providers.

Section 706 requires that the FCC conduct studies, and write reports, that "determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion". It also states that if the FCC's "determination is negative, it shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market". Thus, a negative conclusion gives the FCC a pretext for taking action.

The FCC has express statutory authority to do some of the things that the FCC is doing, and could do, to remove barriers and promote competition.

However, the FCC's majority has searched for a pretext to regulate BIAS providers, because the Congress has enacted no statute that expressly delegates authority to the FCC to regulate the BIAS providers.

The FCC's August 2008 order [67 pages in PDF] regarding Comcast, which asserted regulatory authority under its August 2005 policy statement [3 pages in PDF] was rejected by the U.S. Court of Appeals (DCCir) in its April 6, 2010, opinion [36 pages in PDF] in Comcast v. FCC.

In 2010, the FCC considered reclassifying BIAS as Title II telecommunications service, which the FCC has broad authority to regulate, but did not do so. Rather, the FCC issued a Section 706 report [143 pages in PDF] in July of 2010 asserting that broadband is not being deployed in a reasonable and timely fashion. Then, it adopted rules regulating BIAS providers in December of 2010, asserting authority under Section 706, and the finding of its July 2010 report.

The December 2010 Report and Order (R&O) [194 pages in PDF] asserts that Section 706 "authorizes the Commission to address practices, such as blocking VoIP communications, degrading or raising the cost of online video, or denying end users material information about their broadband service, that have the potential to stifle overall investment in Internet infrastructure and limit competition in telecommunications markets." (See, R&O at Paragraph 120. That R&O is FCC 10-201 in GN Docket No. 09-191 and WC Docket No. 07-52.)

The December 2010 rules will be subjected to judicial review. The FCC's already tenuous legal argument would have been further impeached had it not reached the conclusion that it did in the just released report.

The R&O asserts that Section 706 "provides the Commission a specific delegation of legislative authority to promote the deployment of advanced services, including by means of the open Internet rules adopted today". (See, Paragraph 122.)

Moreover, Section 706 authority "was triggered" by the July 2010 report. (See, Paragraph 123.)

The just released report states that "Since last year's broadband progress report, the Commission has taken a number of actions to fulfill Congress's mandate to accelerate deployment by removing barriers to investment and promoting competition. For example, the Commission ... adopted the Open Internet Order ..." (See, Paragraph 6.)

In order to reach the conclusion that broadband is not being deployed in a reasonable and timely fashion, the just released FCC report engages in linguistic sleight of hand in order to give the words of Section 706 meanings that are contrary to their plain meanings. For example, the statute does not use the term "broadband". Rather, the statute concerns "advanced telecommunications". The report treats this as "broadband". Also, the statute states that if the FCC makes a negative finding, it shall take action to increase competition in the "telecommunication" market. The FCC construes this too as though it were "broadband", even though the FCC has declared that broadband internet access is an information service and not a telecommunications service.

However, the FCC report's most significant departure from the plain meaning of the statute pertains to the words "availability" and "capability" in the phrase "availability of advanced telecommunications capability". The report treats these words as though they were "subscription". That is, there exists broadband internet capability that is available to well over 90% of the population. However, many persons for whom service is available do not subscribe.

In addition, this report excludes mobile broadband from broadband. It states that "we exclude mobile wireless data from our conclusions in this report", event though it finds that "mobile services capable of actual speeds above the 4 Mbps/1 Mbps benchmark are becoming increasingly common". (See, Paragraphs 26 and 27.)

Chairman Genachowski wrote in his statement that "approximately one third of Americans -- more than 100 million people -- don't subscribe to broadband. America's broadband adoption rate is approximately 67 percent". He concluded that "too many Americans are still being left behind".

FCC Commissioner Robert McDowell dissented, writing his his statement that this report contains "flawed analyses and conclusions".

Former FCC Chairman Michael Powell called the report's conclusion "regrettable and wrong".

Powell, who is now the head of the National Cable and Telecommunications Association (NCTA), stated in a release that the report's conclusions "are regrettable and wrong -- not only because they fly in the face of the $250 billion investment made by broadband providers since 2008 to improve and extend networks, but also because they appear to ignore the Commission’s own facts. The Commission’s own research shows that 95 percent of U.S homes have access to high-speed broadband service and more than 90 percent of consumers are satisfied with the speed of their service."

Rep. Greg Walden (R-OR), Chairman of the House Commerce Committee's (HCC) Subcommittee on Telecommunications and Technology, stated in a release that "It's difficult to understand how an objective look at the facts can lead the FCC to conclude that our progress on broadband is lacking. Congress has tasked the Commission in section 706 with examining the ‘availability’ and ‘deployment’ of high-speed broadband, and the numbers don’t lie. Even the FCC has confessed that wired broadband is available to 95 percent of Americans and that wireless broadband is available to 98 percent. This doesn’t even account for new satellite broadband offerings, which the FCC has recognized as a potentially efficient way of ensuring universal coverage. Even the small percent of homes that don’t have access is shrinking. Last year the FCC estimated that 8.9 million out of 130 million households did not have high-speed broadband available; using the same analysis, the FCC itself estimates that number has dropped to 4.6 million."

Walter McCormack, head of the US Telecom, stated in a release that "The FCC's own data show that 95 percent of Americans have access to wired broadband, and 93 percent are happy with their service. Moreover, private sector investment in broadband grew from $63 billion to $66 billion from 2009-10, according to USTelecom and Yankee Group data. Clearly the private sector is doing its part -- broadband has been deployed to virtually every corner of America where a business case can be made for investment."

McCormack added that "It is now important for government to do its part as well -- by taking action to remove barriers to investment, eliminate uneconomic regulation, make additional spectrum available, and provide financial assistance to areas where it is economically unfeasible to provide broadband on an unsupported basis."

This report is required by Section 706 of the 1996 Act, and is codified at 47 U.S.C. § 157 notes. The statute provides, in part, that the FCC shall regularly "initiate a notice of inquiry concerning the availability of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) ... In the inquiry, the Commission shall determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion. If the Commission's determination is negative, it shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market." (Parentheses in original.)

For prior reports, see:

The just released report is FCC 11-78 in GN Docket No. 10-159.

ITIF Paper Urges More Funding of University Research and Revising R&D Tax Credit

5/19. The Information Technology and Innovation Foundation (ITIF) released a paper [18 pages PDF] titled "University Research Funding: The United States is Behind and Falling". It laments the level of funding of research at U.S. universities. It argues that federal and state governments should spend more, and Congress should give businesses a greater tax credit for research at universities than for in house research.

This paper asserts that "our innovation system is faltering". It states that "in 2008 the United States ranked 22nd out of 30 countries in government-funded university research and 21st in business-funded university research".

The solution, this paper argues, is for the federal government and the states to give more money to universities. In addition, to incent businesses to give more money to universities, the paper argues that the Congress should enact a "collaborative R&D tax credit that provides companies with a generous tax credit for expenditures on research conducted at universities".

It adds that "Congress should allow firms to take a flat credit of 20 percent for all collaborative research conducted at universities (and at federal laboratories and research consortia)". (Parentheses in original.)

This paper is silent on research conducted by businesses in house, and state and federal policies that may inhibit such research, such not increasing, modernizing, and making permanent the R&D tax credit.

There already is an R&D tax credit, albeit scheduled to sunset at the end of this year. Moreover, it covers collaborative research conducted at universities. This paper does not explain with particularity that what it is advocating is creating a greater incentive for businesses to fund university research than to conduct research in house.

That is, the existing credit has two calculation formulas. First, the basic credit rate is 20%. But it only applies to research over a certain base amount related to the business's historical research intensity, which is the ratio of its research spending to gross receipts back in the 1980s. It is outdated and obsolete. Second, the alternative simplified credit (ASC) rate is 14%. It applies only to qualified research expenses that exceed 50 percent of the average qualified research expenses for the three preceding taxable years.

For a more detailed explanation of this topic, see the Department of the Treasury's March 25, 2011, report [13 pages in PDF] titled "Investing in U.S. Competitiveness: The Benefits of Enhancing the Research and Experimentation (R&E) Tax Credit"

In contrast, the ITIF proposes at credit rate of 20%. Moreover, the ITIF proposes that it apply to all collaborative research conducted at universities, federal laboratories and research consortia.

The authors of this paper are Robert Atkinson and Luke Stewart, both of the ITIF.

Senators Debate Free Trade Agreements

5/19. Sen. Sherrod Brown (D-OH) spoke in the Senate against free trade, free trade agreements (FTAs), and permanent normal trade relations (PNTR) with the People's Republic of China.

He complained that "manufacturing jobs so often go straight to Mexico, go straight to China, go straight to countries all over the world after we sign these trade agreements or after we change these rules about trade". See, Congressional Record, May 19, 2011, at Pages S3147-8.

He also said that "We went to literally hundreds of billions of dollars in trade deficit with China after PNTR. If we go into any store in the country we see the number of products made in China that used to be made" in the U.S.

None of the pending bilateral FTAs concluded during the Bush administration (with Korea, Columbia, and Panama) have been approved by the Congress during the Obama administration. These FTAs include significant provisions related to telecommunications, electronic commerce, and intellectual property.

See, the US Korea FTA's sections on telecommunications [18 pages in PDF], electronic commerce [4 pages in PDF]  intellectual property [35 pages in PDF]. See also, June 30, 2007, side letters on internet service providers [6 pages in PDF], books [4 pages in PDF], shutting down web sites [4 pages in PDF], and enforcement of a provision regarding pharmaceutical patents [2 pages in PDF].

Moreover, President Obama has not commenced negotiations for any new bilateral FTAs.

Sen. Mike Johanns (R-NE) also spoke in the Senate on May 19, arguing that free trade and FTAs create jobs, and that the pending FTAs should be approved.

He said that "the administration, claiming that reopening negotiations with Korea, Colombia, and Panama was necessary, continues to talk through these agreements." See, Congressional Record, May 19, 2011, at Pages S3146-7.

He added that "Now the administration seems to be moving the goalposts, suggesting continued delay. They are trying to hold up these agreements to force us to make spending increases that were contained in the ill-fated economic stimulus bill."

"On July 1, less than 2 months away from now, the trade agreement between the European Union and South Korea goes into effect", said Sen. Johanns. "If America sits on the sidelines while other nations sign trade agreements, we will lose the chance to create jobs on our shores."

See also, Sen. Johanns' May 19 release.

On Thursday, May 26, the Senate Finance Committee (SFC) will hold a hearing titled "U.S. Korea Free Trade Agreement". The witnesses will include Demetrios Marantis (Deputy USTR). See, notice.

On May 11, 2011, Rep. Mike Kelly (R-PA) introduced HRes 266, a long resolution, that concludes that President Obama "should immediately submit legislation implementing the United States-Korea Free Trade Agreement to Congress". It was referred to the House Ways and Means Committee. See also, Rep. Kelly's release.

Goodwin Liu Cloture Motion Fails

5/19. The Senate rejected a cloture motion on the nomination Goodwin Liu to be a Judge of the U.S. Court of Appeals (9thCir) by a vote of 52-43. See, Roll Call No. 74.

Democrats voted 51-1. Only Sen. Ben Nelson (D-NE) voted no. Republicans voted 1-42. Only Sen. Lisa Murkowski (R-AK) voted yes. See, related item in this issue titled "More People and Appointments".

A cloture vote, which ends a filibuster, requires a three fifths majority to prevail under Senate Rule XXII. See, Congressional Research Service report titled "Invoking Cloture in the Senate", dated February 25, 2011.

Liu is the son of Taiwanese immigrants. He went to college at Stanford, and law school at Yale. He clerked for Judge David Tatel of the U.S. Court of Appeals (DCCir) and Justice Ruth Ginsburg of the Supreme Court. He worked in the Washington DC office of the law firm of O'Melveny & Myers. He is now a law professor at UC Berkeley.

The main objection of Senate Republicans, and the voters and interest groups to whom they respond, is that Liu is very liberal on a number of social issues, such as same sex marriage, education, welfare, and racial quotas, and his prior statements suggest that he would render opinions in cases involving these issues that are consistent with his views, but inconsistent with statutes.

Sen. Orrin Hatch (R-UT), who voted present, stated in the Senate debate that "Professor Liu's record endorses a powerful judiciary that can take control of the law in general and of the Constitution in particular. His activist judicial philosophy is fundamentally at odds with the principles on which our system of government is based." See, Congressional Record, May 19, 2011, at Page S3125.

Similarly, when former President Bush nominated Judges for the Courts of Appeals, Senate Democrats objected to the conservativism, especially on social issues, of some of those nominees.

Moreover, neither Bush nor Obama have nominated many persons with substantial experience or expertise, either from practicing law, teaching, or serving as a judge, in technology related areas of law.

Nominees to the Federal Circuit are a notable exception. And, there are a few other exceptions, such as Katherine Forrest, whom President Obama recently nominated for the U.S. District Court (SNDY), but not many. See, story titled "Obama Nominates Time Warner Copyright Lawyer for SDNY" in TLJ Daily E-Mail Alert No. 2,233, May 5, 2011.

Senators whose party is not the President's party tend to delay and/or oppose some of the nominees of the President, while Senators of the President's party almost always support them. When the party of the President changes, Senators trade roles. In addition, Senators of the President's party often accuse the other party of improper delay and obstruction.

In 2002, Senate Democrats added a new strategy -- the systematic use of the filibuster to block Court of Appeals nominees, thus requiring filibustered nominees to obtain 60 votes to win confirmation. Senate Democrats successfully filibustered eight of former President George Bush's judicial nominees, such as Miguel Estrada, whom President Bush nominated to be a Judge of the U.S. Court of Appeals (DCCir). Now, Senate Republicans have blocked Liu by resort to the filibuster.

Senate Democrats also used their majority to block some nominees by not allowing a vote in the Senate Judiciary Committee, such as Peter Keisler, whom President Bush nominated for the DC Circuit.

Senate Democrats now complain about the impropriety of using the filibuster to block judicial nominations, just as Republicans did during the Bush administration.

Also, back in 2005, a group of 14 Senators issued a joint statement that provided that "Nominees should be filibustered only under extraordinary circumstances". Hence, Republican Senators argued on May 19 that there are "extraordinary circumstances" that warrant a filibuster of Liu, while Democrats argued the absence of "extraordinary circumstances".

Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), stated in a release after the vote that "The partisan filibuster of Goodwin Liu's nomination is another example of Republicans' shifting standards on judicial nominations."

He stated during debate that during the Bush administration many Republican Senators "declared that they would never support the filibuster of a judicial nomination. Some have tried to stay true to that vision and principle. That is why the filibuster against Judge Hamilton failed and that against Judge McConnell was ended. This filibuster should also be ended." See, Page S3141.

(Judge David Hamilton now sits on the 7th Circuit, while the Senate confirmed Judge John McConnell for the District Court in Rhode Island earlier this month.)

Also, last week, the Senate rejected a cloture motion on the nomination of James Cole to be the Deputy Attorney General (DAG). See, story titled "Senate Rejects Cloture on Nomination of James Cole to be Deputy Attorney General" in TLJ Daily E-Mail Alert No. 2,238, May 11, 2011.

The Liu nomination, and other judicial nominations in the past decade, demonstrate that ideology is playing a major role in both the President's selection of judges, and in efforts to block confirmation.

In contrast, expertise in key areas of federal law, such as patent, copyright, antitrust, communications, surveillance, and computer fraud, are not a significant criteria in either Presidential selection or Senate confirmation.

Yet, confirmed judges rarely sit in cases that involve same sex marriage statutes, or other issues that have caused nominees such as Liu to be blocked. In contrast, confirmed judges do sit in many important cases involving technology related areas of law.

Senate to Take Up Surveillance Law Extensions

5/19. Sen. Harry Reid (D-NV) and Sen. Mitch McConnell (R-KY) introduced S 1038 [LOC | WW], the "PATRIOT Sunsets Extension Act of 2011", a bill to extend for four years three expiring provisions of surveillance law, on May 19, 2011.

Sen. Reid filed a cloture motion the same day. See, Congressional Record, May 19, 2011, at Page S3162.

The full Senate is scheduled to consider this bill on Monday, May 23, 2001.

Three provisions of surveillance law are scheduled to sunset on Friday, May 27, 2011. See, story titled "Obama Signs Three Month Extension of Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,198, February 25, 2011.

The three provisions are codified in the Foreign Intelligence Surveillance Act (FISA). They pertain to (1) treating lone wolf individuals like agents of foreign governments or terrorists organizations (see, 50 U.S.C. § 1801(b)'s definition of the term "agent of a foreign power"), (2) access to business records, including library records (see, 50 U.S.C. § 1861 as amended by Section 215 of the 2001 surveillance act), and (3) roving wiretaps (see, 50 U.S.C. § 1805).

S 1038 is a short bill that would merely extend the three provisions for four years, to June 1, 2015. The text of the bill is also in the Congressional Record, May 19, 2011, at Page S3179.

The House has not yet passed a bill. However, on May 12, 2011, the House Judiciary Committee (HJC) approved HR 1800 [LOC | WW], the "FISA Sunsets Reauthorization Act of 2011". It is a short bill that provides a six year extension (until December 31, 2017) of the sunset for roving wiretap and Section 215 business records authority. It makes permanent lone wolf authority.

See also, story titled "House Judiciary Committee Approves Bill to Extend Three Provisions of Surveillance Law" in TLJ Daily E-Mail Alert No. 2,240, May 13, 2011; story titled "House Judiciary Committee to Mark Up Surveillance Sunsets Bill" in TLJ Daily E-Mail Alert No. 2,237, May 10, 2011; and story titled "House Crime Subcommittee Holds Hearing on Extending Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,239, May 12, 2011.

On March 10, 2011, the Senate Judiciary Committee (SJC) approved S 193 [LOC | WW], the "USA PATRIOT Act Sunset Extension Act of 2011".

S 193 would extend the sunsets to December 31, 2013, and address standards, accountability, and oversight, for the purpose of limiting government abuse of surveillance authority.

TPI Paper Recommends that ICANN Board Be Drawn From Registries and Registrars

5/19. The Technology Policy Institute (TPI) released a paper [12 pages in PDF] titled "Improving ICANN’s Governance and Accountability: A Policy Proposal". The authors are Thomas Lenard (TPI) and Lawrence White (NYU Stern School of Business).

This paper states it is a serious problem that the Internet Corporation for Assigned Names and Numbers (ICANN) is not accountable to any outside authority.

The paper recommends that the ICANN remain as a non-profit organization, but that its board of directors should be drawn from the ranks of the registries, including Regional Internet Registries, and registrars, to provide direct accountability.

This paper states that "a lack of accountability is one of the most important issues surrounding ICANN -- and thus the Internet. Accountability requires some meaningful external checks; but those external checks are absent. A set of ``notice and comment´´ procedures over which ICANN has sole control does not constitute meaningful accountability. Instead, our review of other institutional models suggests that a change in governance that puts ICANN's direct users effectively in control would make the organization more accountable and would improve incentives for efficient operation." (Footnote omitted.)

FCC Releases Tentative Agenda for June 9 Meeting

5/19. Federal Communications Commission (FCC) released a tentative agenda for its event titled "open meeting" on June 9, 2011.

First, this agenda states that the FCC is scheduled to adopt a Report and Order (R&O) that "enables all carriers that file tariffs with the Commission to do so electronically".

Second, this agenda states that the FCC is scheduled to adopt a Further Notice of Proposed Rulemaking (FNPRM) regarding "enabling the use of wider channel bandwidths for the provision of broadband services in the Broadband Radio Service (BRS) and the Educational Broadband Service (EBS)".

Third, this agenda states that the FCC is scheduled to adopt a R&O "adopting technical rules to mitigate space path interference between the 17/24 GHz Broadcasting-Satellite Service (BSS) space stations and current and future Direct Broadcasting Service (DBS) space stations that operate in the same frequency band".

Fourth, this agenda states that the FCC is scheduled to adopt a Memorandum Opinion and Order (MOO) regarding a "petition for reconsideration of the deadline by which VHF Public Coast (VPC) licensees must vacate Channel 87B following its re-designation for the exclusive use of Automatic Identification Systems and to modify the VPC frequency band".

This meeting is scheduled for 10:30 AM on Thursday, June 9, 2011, in the FCC's Commission Meeting Room. The FCC sometimes adds or deletes items. The FCC does not always start its meetings at the scheduled time.

Genachowski Advocates Incentive Auctions

5/19. Federal Communications Commission (FCC) Chairman Julius Genachowski gave a speech to a convention of the Telecommunications Industry Association (TIA) in Dallas, Texas, in which he stated that "The single most important step we can take for U.S. leadership in mobile is implementing voluntary incentive auctions".

He said that "Incentive auctions would unleash market forces to reallocate this scarce resource of spectrum from less efficient uses to more efficient uses. They are two-sided auctions, providing for licensees like over-the-air broadcasters who voluntarily supply spectrum to receive a share of the proceeds. It's an incentive-based approach, grounded in strong free-market principles."

He also said that "Momentum is building behind this idea. Incentive auction authority has been included in bipartisan bills in both the House and the Senate."

For a summary of pending proposals to authorize the FCC to conduct voluntary spectrum auctions, see story titled "Rep. Latta Introduces Incentive Auctions Bill" in TLJ Daily E-Mail Alert No. 2,227, April 27, 2011, and story titled "Rep. Boucher and Rep. Stearns Introduce Voluntary Incentive Auctions Act" in TLJ Daily E-Mail Alert No. 2,114, July 29, 2010.

Genachowski also stated that the FCC is "Giving greater flexibility to bands like Mobile Satellite Service to permit terrestrial broadband use", "Releasing substantial unlicensed spectrum for the next generation of Wi-Fi, machine-to-machine communication and other innovations", and "Fostering greater efficiency in technology and software and spurring dynamic spectrum sharing and secondary markets".

Capitol Hill News

5/19. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over consideration of S 623 [LOC | WW], the "Sunshine in Litigation Act".

5/19. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over consideration of S 968 [LOC | WW], the "Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011".

5/19. Sen. Harry Reid (D-NV) introduced S 1022 [LOC | WW], the "PATRIOT Sunsets Extension Act of 2011".

5/19. Sen. Harry Reid (D-NV) introduced S 1038 [LOC | WW], the "PATRIOT Sunsets Extension Act of 2011".

People and Appointments

5/19. President Obama nominated Morgan Christen to be a Judge of the U.S. Court of Appeals (9thCir) on May 18, 2011. See, White House news office release. She has been a Justice of the Supreme Court of the state of Alaska since 2009. She was appointed by former Governor Sarah Palin. Before that, she was a state trial court judge in Anchorage, Alaska. Before that, she worked in the Anchorage office of the predecessor of K&L Gates. In addition, Sen. Lisa Murkowski (R-AK), who backs this nomination, was the only Republican to vote to override the filibuster of Goodwin Liu on May 19. See also, Sen. Murkowski's release. This nomination is for an Alaska seat on the 9th Circuit. Judge Andrew Kleinfeld has taken senior status.

5/19. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over consideration of five District Court nominees: John Ross (ED Missouri), Timothy Cain (South Carolina), Nannette Brown (ED Louisiana), Nancy Torresen (Maine), and William Kuntz (EDNY).

5/19. President Obama nominated three persons to be District Court Judges: Andrew Carter (SDNY), James Gilstrap (ED Texas), and Gina Marie Groh (ND West Virginia). See, White House news office release and release. Carter is currently a federal Magistrate Judge (EDNY); he was previously a public defender. See also, Sen. Charles Schumer's (D-NY) release.

5/19. President Obama nominated Luis Aguilar to be a member of the Securities and Exchange Commission (SEC) for a term expiring June 5, 2015. His has been an SEC Commissioner since 2008. This is a reappointment. See, White House news office release.

5/19. President Obama nominated Daniel Gallagher to be a member of the Securities and Exchange Commission (SEC) for a term expiring June 5, 2016. If confirmed, he will replace Kathleen Casey, whose term is about to expire.

More News

5/19. Federal Communications Commission (FCC) Chairman Julius Genachowski sent a letter to House Commerce Committee (HCC) leaders regarding regarding the public safety equipment and device market. Genachowski's letter responds to the April 20 letter [PDF] sent by  Rep. Fred Upton (R-MI), Rep. Henry Waxman (D-CA), Rep. Greg Walden (R-OR), and Rep. Anna Eshoo (D-CA), who are the Chairmen and ranking Democrats of the (HCC) and its Subcommittee on Communications and Technology. See, story titled "Representatives Write FCC Re Motorola Dominance in Public Safety Market" in TLJ Daily E-Mail Alert No. 2,226, April 26, 2011.

USITC Reports on IP Infringement and Indigenous Innovation in the PRC

5/18. The U.S. International Trade Commission (USITC) released a report [308 pages in PDF] titled "China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy".

This report states that "many U.S. companies have reported that the infringement of their intellectual property rights (IPR) in China, as well as China’s “indigenous innovation” policies, have undermined their competitive positions. IPR infringement -- including violations of copyrights, trademarks, patents, and trade secrets -- reduces market opportunities and profits for U.S. firms in China and other markets, since these firms' products and technologies are forced to compete against sales of illegal, lower-cost imitations."

This report also finds that "China's indigenous innovation policies, which promote the development, commercialization, and procurement of Chinese products and technologies, are of recent origin. In some industries, they appear to have eroded the competitive positions of U.S. and other foreign firms in China while creating new barriers to foreign direct investment (FDI) and exports. More generally, U.S. firms are concerned about the future implications of China's evolving policies in such areas as preferential support to Chinese firms and the implementation of China-specific technical standards."

Sen. Max Baucus (D-MT), the Chairman of the Senate Finance Committee (SFC), which asked the USITC to write this report, stated in a release that "China's unfair practices cost the U.S. billions of dollars and millions of jobs ... Time and time again, China has failed to protect and enforce American intellectual property rights, and it continues to discriminate unfairly against American businesses. We cannot pretend that there aren’t real consequences to these violations when these numbers show that millions of American jobs are on the line."

Sen. Orrin Hatch (R-UT), the ranking Republican on the SFC, stated in this release that "Our nation plays by the rules -- so too must China ... I hope the report’s findings spur the Administration to deepen their efforts to meet this challenge."

Robert Holleyman, head of the Business Software Alliance (BSA), stated in a release that "The ITC report confirms what the software industry has long known: The Chinese practice of ignoring the intellectual property rights of US innovators harms our nation, puts a drag on our economy and siphons jobs away from Americans".

He added that "When companies in a high-piracy country like China dodge overhead costs by stealing the software they need to run their operations, they gain an unfair competitive advantage over companies in low-piracy rate countries like the United States."

Former Rep. Boucher Joins Sidley Austin

5/18. Former Rep. Rick Boucher (D-VA) joined the Washington DC office of the law firm of Sidley Austin as head of its government strategies group. Until his election defeat last November, he was one of the Congress's leading authorities on communications and internet technologies, laws and policies.

He represented a district at the western end of the state of Virginia for 28 years. He was first elected in 1982. He lost his seat in the Republican sweep in the November 2, 2010 general elections. See, story titled "Rep. Boucher Loses Election" in TLJ Daily E-Mail Alert No. 2,149, November 2, 2010.

Rick BoucherBoucher (at right) was a member of both House Commerce Committee (HCC) and its telecommunications subcommittee, and the House Judiciary Committee (HJC) and its intellectual property subcommittee. He was involved in many of the legislative debates related to information and communications technologies.

Most recently, he was the Chairman of the HCC's Subcommittee on Communications, Technology and the Internet. This subcommittee is now titled Subcommittee on Communications and Technology, and is chaired by Rep. Greg Walden (R-OR).

TLJ spoke with Boucher on May 18. He said that he joined Sidley Austin "a couple of weeks ago", and so far has been involved in "an orientation process". Also, Liz Tucker, who was executive assistant in his Congressional office, has joined him at Sidley Austin.

He will be the head of Sidley Austin's government strategies group (GSG), which will counsel clients "on ways their problems can be solved through federal policy". He said that he will "help craft those strategies", and that he will also have "administrative purview".

Boucher's main areas of experience and expertise lie in information and communications technology, intellectual property, energy, and air quality issues. However, the Sidley Austin GSG  also counsels clients in other areas, including financial services, life sciences, health care, international trade, and environmental issues.

Sidley Austin issued a release in which Boucher stated that "Sidley offers a truly unique opportunity for me to promote the growth of a public policy group that brings together lawyers renowned for their leadership in areas I have focused on for much of my career, such as technology, telecommunications, life sciences, financial services, energy and the environment".

In the early 1990s, he wrote legislation that allowed the first commercial use of the internet. Later in the 1990s, he was one of the most knowledgeable and active members of a group of Representatives and Senators who worked to enact laws, and promote government policies, that would advance the development and use of the internet and information technologies and the economic and social benefits that would flow therefrom.

He also cosponsored tort reform legislation known as the Class Action Fairness Act. He also attempted over many Congresses to enact legislation to limit abusive state business activity taxes.

In recent Congresses he worked to create a data privacy regulatory regime, reform the universal service tax and subsidy programs, and create an incentive spectrum auction process.

He was also one of the House's leading opponents of content industry efforts to increase copyright protection and enforcement. A decade ago he successfully lead efforts to block legislation to create new proprietary interests in collections of data. Subsequently, he worked unsuccessfully to create a fair use exemption to the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA).

Goodwin Liu Set for Cloture Vote

5/17. Sen. Harry Reid (D-NV) filed a motion to invoke cloture on the controversial nomination of Goodwin Liu to be a Judge of the U.S. Court of Appeals (9thCir). The Senate is scheduled to vote on this motion on Thursday, May 19, 2011.

He is a law professor at UC Berkeley with numerous opponents who state that he advocates liberal policies, and judicial activism to implement those policies. However, while the 9th Circuit hears many technology related cases, the long running debate over Liu has focused on non-technology related matters. Also, his published works and teaching experience reflect no expertise in any technology related area of law.

Sen. Charles Grassley (R-IA) explained that his opposition Liu is based on "(1) his controversial writings and speeches; (2)an activist judicial philosophy; (3) his lack of judicial temperament; (4) his lack of candor before the Committee, and (5) his limited experience".

Sen. Grassley wrote in his May 18 statement that Liu "seems to favor a social needs-based view of living constitutionalism. His scholarly work argues that judicial decision making should be shaped by contemporary social needs and norms. Notably, he has said that ``the problem for courts is to determine, at the moment of decision, whether our collective values on a given issue have converged to a degree that they can be persuasively crystallized and credibly absorbed into legal doctrine.´´ This is troublesome. Our constitutional framework puts the legislative function in the Congress, not in the courts. It is the legislative function, through the political process, that determines when a particular value is to become part of our law. This is not the duty of judges. The judiciary is limited to deciding cases and controversies, not establishing public policy."

Sen. Schumer and Sen. Crapo Introduce Bill to Repeal Excise Tax on Phone Service

5/17. Sen. Charles Schumer (D-NY) and Sen. Mike Crapo (R-ID) introduced S 1012 [LOC | WW], a bill to amend the Internal Revenue Code of 1986 to repeal the excise tax on telephone and other communications services.

26 U.S.C. § 4251 imposes a 3 percent excise tax on some, but not all, communications services. This tax is sometimes referred to by its opponents as the "Spanish American War tax", since it was originally imposed to help fund that war.

Bills to repeal this tax are introduced, Congress after Congress, but are not enacted.

This bill was referred to the Senate Finance Committee (SFC).

Former DOJ Attorney to Head FCC's AT&T T-Mobile Antitrust Merger Review Team

5/17. Federal Communications Commission (FCC) Chairman Julius Genachowski named Renata Hesse to be Senior Counsel to the Chairman for Transactions.

The FCC issued a release that states that Hesse will "head the working team that is conducting the review of the proposed AT&T/T-Mobile transaction, and will oversee the inter-bureau steering committee established to coordinate the agency's review of the merger application".

She is currently a partner in the Washington DC office of the law firm of Wilson Sonsini Goodrich & Rosati (WSGR). She previously worked at the Department of Justice's (DOJ) Antitrust Division, where she was head of the Networks and Technology Enforcement Section.

She was one of the senior attorneys involved in the DOJ's action in 2004 against Oracle to block its acquisition of PeopleSoft. The DOJ suffered a humiliating defeat in the District Court, and dropped the case without appealing. Oracle proceeded to acquire PeopleSoft.

On February 26, 2004, the DOJ filed a complaint in U.S. District Court (NDCal) against Oracle alleging that its proposed acquisition of PeopleSoft would lessen competition substantially in interstate trade and commerce in violation of Section 7 of the Clayton Act, which is codified at 15 U.S.C. § 18. The plaintiffs sought an injunction of the proposed acquisition. See, story titled "Antitrust Division Sues Oracle to Enjoin Its Proposed Acquisition of PeopleSoft" in TLJ Daily E-Mail Alert No. 846, March 1, 2004.

On September 9, 2004, the District Court issued its Findings of Facts, Conclusions of Law and Order Thereon holding that the DOJ failed to meet its burden of showing by a preponderance of the evidence that the proposed merger is likely substantially to lessen competition in a relevant product and geographic market. Hence, the District Court directed the entry of judgment against the government, and in favor of Oracle. See, story titled "DOJ Loses Oracle Case" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

The FCC has structured its antitrust merger review process to evade judicial review. Since it began conducting antitrust merger reviews shortly after enactment of the Telecommunications Act of 1996, not one FCC disposition has been subjected to judicial review.

Hesse also worked on the DOJ's antitrust action against Microsoft.

Hesse's WSGR web page states that "her practice is focused on antitrust litigation and counseling". It adds that she represented McAfee in its acquisition by Intel, 3Com in its acquisition by Hewlett-Packard, and Sun Microsystems in its acquisition by Oracle.

AT&T and T-Mobile USA announced their transaction on March 20, 2011. See, story titled "AT&T to Acquire T-Mobile USA" in TLJ Daily E-Mail Alert No. 2,205, March 21, 2011. They filed their merger application [112 pages in PDF, redacted], nominally a license transfer request, on April 21, 2011.

Petitions to deny are due by May 31, 2011. Oppositions are due by June 10, 2011. Replies are due by June 20, 2011. See, FCC Public Notice (PN). It is DA 11-799 in WT Docket No. 11-65. See also, story titled "FCC Sets Comments Deadlines for AT&T T-Mobile USA Antitrust Merger Review" in TLJ Daily E-Mail Alert No. 2,229, April 29, 2011.

People and Appointments

5/17. The Senate confirmed Susan Carney to be a Judge of the U.S. Court of Appeals (2ndCir) by a vote of 71-28. See, Roll Call No. 71. All of the no votes were cast by Republicans. She has worked for Yale University's Office of Legal Council for 13 years. See also, statement by Sen. Patrick Leahy (D-VT).

More News

5/17. The Federal Communications Commission (FCC) published a notice in the Federal Register that sets comment deadlines for its Notice of Inquiry (NOI) [27 pages in PDF] regarding rights of way policies and wireless facilities siting requirements. The deadline to submit initial comments is July 18, 2011. The deadline to submit reply comments is August 30, 2011. The FCC adopted and released this item on April 7, 2011. It is FCC 11-51 in WC Docket No. 11-59. See,  Federal Register, Vol. 76, No. 95, Tuesday, May 17, 2011, at Pages 28397-28403.

5/17. Sen. Patrick Leahy (D-VT) introduced S 1011 [LOC | WW], the "Electronic Communications Privacy Act Amendments Act of 2011".

People and Appointments

5/16. President Obama nominated Terry Garcia to be the Deputy Secretary of Commerce. See, White House news office release. He has worked for the National Geographic Society (NGS) since 1999. He held senior positions at the Department of Commerce's (DOC) National Oceanic and Atmospheric Administration (NOAA) during the Clinton administration.

Go to News from May 11-15, 2011.