TLJ News from January 6-10, 2012

5th Circuit Holds That State Caller ID Spoofing Statute Is Preempted

12/10. The U.S. Court of Appeals (5thCir) issued its opinion [12 pages in PDF] in TelTech Systems v. Bryant, holding that a Mississippi state statute that regulates caller identification spoofing is preempted by the federal Truth in Caller ID Act of 2009, or TCIA.

This is significant because the federal TCIA is a toothless statute which lacks any express preemption. Now, states in the 5th Circuit cannot enact consumer protection statutes directed at misleading commercial uses of caller ID spoofing. Although, other courts have reached different conclusions.

The Congress enacted S 30 [LOC | WW], the TCIA, in 2010. It is now Public Law No. 111-331. This Act amended 47 U.S.C. § 227 to provide that "It shall be unlawful for any person within the United States, in connection with any telecommunications service or IP-enabled voice service, to cause any caller identification service to knowingly transmit misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value, unless such transmission is exempted ..."

The TCIA requires the Federal Communications Commission (FCC) to write implementing regulations. It also authorizes states to bring actions for violation of this Act.

The TCIA is silent on the issue of state preemption. Hence, there is no express preemption in the 2010 Act. However, the TCIA amended the Telephone Consumer Protection Act (TCPA), which does reference preemption.

This federal anti spoofing law is a largely symbolic and toothless prohibition. It enabled members of Congress to assert that they were acting to protect consumers, without bringing about any substantive changes in business practices.

The Act's qualification that it only bars caller ID spoofing that is conducted with "intent to defraud, cause harm, or wrongfully obtain anything of value" has left businesses free to conduct a wide range of caller ID spoofing. This has left ordinary phone service consumers unable to identify the origin of annoying, and often robocalling, solicitations.

The Act does prohibit spoofing when there is "intent to defraud". Yet, under theses circumstances, federal prosecutors and consumer protection agencies already possesses authority to prosecute and take other actions for the underlying fraud. The Act therefore accomplished little, other than allowing the Congress and FCC to posture.

In contrast, the Mississippi statute contains a broader prohibition. It provides that a "person may not enter or cause to be entered false information into a telephone caller identification system with the intent to deceive, defraud or mislead the recipient of a call" and a "person may not place a call knowing that false information was entered into the telephone caller identification system with the intent to deceive, defraud or mislead the recipient of the call."

That is, under the state statute, merely intending to mislead is a violation.

The plaintiffs in the District Court, and appellants in the Court of Appeals, are TelTech Systems, Inc., a New Jersey based company that provides caller ID spoofing services, Wonderland Rentals, Inc., a Michigan based company that uses these spoofing services, and Meir Cohen, President of TelTech.

TelTech's spoofing services are used by Wonderland in a manner that violates the Mississippi statute, but not the federal statute.

The plaintiffs filed a complaint in the U.S. District Court (SDMiss) seeking declaratory and  injunctive relief. They alleged that the state statute is invalid under the doctrine of conflict preemption, the dormant commerce clause, and the First Amendment.

The District Court held on cross motions for summary judgment that the state statute is invalid under the dormant commerce clause because it has the practical effect of regulating commerce occurring wholly outside of the state. It also held that there is no conflict preemption because compliance with both statutes is not physically impossible, and because the plaintiffs failed to show that the state statute constituted an obstacle to the accomplishment of a federal objective. Finally, the District Court did not decide the First Amendment issue.

The state of Mississippi brought the present appeal. The Court of Appeals affirmed the judgment of invalidity, but on different grounds.

It wrote that "Our inquiry begins with the presumption that federal statutes do not supersede States' historic police powers, unless Congress clearly and manifestly intended to do so." It continued that "Although interstate telecommunications has been an area of ``significant federal presence´´", the Mississippi Anti Spoofing Act (ASA) "is grounded instead in consumer protection, an area traditionally reserved to the States", and therefore, "here the presumption remains in favor of no preemption."

The Court then turned to the preemption language of the TCPA. 47 U.S.C. § 227(f) provides, in relevant part, as follows:

But in addition, Subsection 227(e)(9) provides that "Notwithstanding any other provision of this section, subsection (f) shall not apply to this subsection or to the regulations under this subsection."

The Court of Appeals noted that different courts have reached different conclusions regarding the preemptive effect of this language. It wrote that "At bottom, 47 U.S.C. § 227(e)(9)'s exempting TCIA from the savings clause in § 227(f) is arguably unclear, both in purpose and in effect, concerning spoofing."

The Court concluded, however, that "In the light of 47 U.S.C. § 227(e)(1)'s carefully-drafted language and legislative history, and in spite of the presumption against preemption that attaches to a State's exercise of its police power, there is an inherent federal objective in TCIA to protect non-harmful spoofing. ASA's proscription of non-harmful spoofing -- spoofing done without ``intent to defraud, cause harm, or wrongfully obtain anything of value´´ -- frustrates this federal objective and is, therefore, conflict-preempted.

Having affirmed the judgment of invalidity of the state statute on non-constitutional grounds, the Court of Appeals did not address either of the constitutional issues -- the dormant commerce clause or the First Amendment challenge.

This case is TelTech Systems, Inc. v. Phil Byrant and Jim Hood, U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 12-60027, an appeal from the U.S. District Court for the Southern District of Mississippi. Judge Rhesa Barksdale wrote the opinion of the Court of Appeals, in which Judges Smith and King joined.

FCC Forms Technology Transitions Policy Task Force

12/10. The Federal Communications Commission (FCC) issued a vaguely worded release that states that FCC Chairman Julius Genachowski has formed a unit, to be comprised of FCC staff, titled "Technology Transitions Policy Task Force".

This release states that Sean Lev will be its "Interim Director" and Rebekah Goodheart will be its "Deputy Director". This unit will also include the FCC's "Chief Economist and Chief Technology Officer, as well as representatives from across the agency".

This release is vague about what this unit will do. However, the FCC release states that this unit will make recommendations regarding:

Genachowski stated in this release that "Technological transitions don't change the basic mission of the FCC. But technology changes can drive changes in markets and competition. And many of the Commission's existing rules draw technology-based distinctions. So the ongoing changes in our nation's communications networks require a hard look at many rules that were written for a different technological and market landscape."

FCC Commission Ajit Pai released a statement in which he praised Genachowski's formation of this unit.

Pai wrote that "our rules continue to presume static domination by monopoly providers. We need a forward-looking regulatory framework that will expedite the Internet Protocol (IP) transition". Also, "The Task Force will help us address this challenge in a comprehensive manner rather than handling issues on a piecemeal basis as they happen to pop up."

Pai argued that "Our goal in this effort should be as simple as it is profound: to develop sound proposals for hastening the IP transition and incentivizing investment in next-generation networks. In developing those proposals, the Task Force should keep certain core principles in mind, such as the need to preserve vital consumer protections -- like 911 emergency calling -- that are still likely to be needed in an all-IP world. Similarly, the Task Force should resist the urge to simply import the rules of the old world into the new. Instead, it should scour the Code of Federal Regulations to track down and remove obsolete legacy regulations, like the tariffs, the arcane cost studies, and the hidden subsidies that distort competition for the benefit of companies, rather than consumers."

Rep. Greg Walden (R-OR), Chairman of the House Commerce Committee's (HCC) Subcommittee on Communications and Technology, stated in a release that "We no longer live in an analog world where three networks and one phone company are responsible for all the voice, video, audio, and data that we consume and convey ... To pretend otherwise is not only futile, but harms the very innovation we seek. As technological advances alter the way we communicate, so, too, should it challenge our notions of how this market operates and how it must be regulated."

Rep. Walden stated that "My hope is that the task force the Chairman has announced today will present the type of forum Commissioner Pai has called for since joining the agency -- one that not only helps transition toward the networks of tomorrow, but also away from the outdated regulations of the past."

Walter McCormick, head of the U.S. Telecom, wrote in a short piece titled "FCC Task Force is a Timely Move" that "consumers increasingly have migrated away from purchasing voice services over the public switched telephone network (PSTN), to new modes of broadband and wireless communications, eroding the once-dominant marketplace power of incumbent local exchange carriers (ILEC). FCC regulations do not reflect this change."

He argued that "Absent this dominant position, economic regulation of ILEC switched telephony is unnecessary and potentially harmful to business."

AT&T's Bob Quinn wrote in a short piece that the purpose of this FCC unit is "to modernize its rules for the transition of traditionally regulated services to applications that ride on an IP broadband".

He wrote that "Addressing these issues in a comprehensive process that crosses the smoke-stacked bureau structure that is a remnant of an almost eight decades old telecom law is critically important."

On November 7, 2012, AT&T filed a petition for rulemaking [28 pages in PDF] with the FCC regarding allowing incumbent local exchange carriers (ILEC) to replace time division multiplexed (TDM) with internet protocol (IP) facilities.

Harold Feld of the Public Knowledge (PK) wrote in a release that "We are happy to see that the FCC is not approaching the change from copper to wireless with ideas of radical deregulation. The FCC is taking leadership to provide a framework that recognizes the need to coordinate with states and address all providers of IP services. Handled properly, this should produce a new social contract between carriers and the American people that includes basic protections for consumers while promoting competition and investment."

Philip Jones of the National Association of Regulatory Utility Commissioners (NARUC) stated in a release that "Wireless technologies seem to change daily, but the fundamental concept of universal service does not. Federal and State regulators must ensure that all Americans have access to affordable, reliable telecommunications service."

Google and Others Write Rep. Walden and Rep. Eshoo Regarding Unlicensed Spectrum

12/10. Google, Microsoft, Public Knowledge (PK), Electronic Frontier Foundation (EFF) and other companies and interest groups sent a letter to Rep. Greg Walden (R-OR) and Rep. Anna Eshoo (D-CA) regarding unlicensed spectrum and upcoming incentive auctions.

The letter argues for allocation by the Federal Communications Commission (FCC) of more unlicensed spectrum. None of the large wireless service providers -- Verizon, AT&T, T-Mobile USA or Sprint Nextel -- signed this letter.

This letter begins that "it is critical that the FCC pursue policies that strike a productive balance between the need for more spectrum that accommodates both exclusive-use licensed and non-exclusive unlicensed technologies."

It argues the importance of unlicensed spectrum to innovation and the economy. It also notes that "during the devastating Hurricane Sandy and its aftermath, when many wireless phone networks were overloaded, flooded, or completely offline, Wi-Fi provided access to the Internet for critical news and information".

This letter states that "skyrocketing demand for unlicensed technologies is outstripping the supply of unlicensed spectrum and threatens to soon saturate the core 2.4 GHz band, leaving innovators and consumers with only the high-frequency 5 GHz band. While the 5 GHz band is extremely important, it is not a substitute for lower-frequency spectrum given its limited range due to higher attenuation and, over much of its range, lower power limits and more restrictive technical rules."

It argues that if the FCC "does not designate more unlicensed spectrum, the fuel for this growth engine will be lost and consumers will face degraded service and slowed innovation. Fortunately, the current television broadcast spectrum presents the FCC with a once-in-a-generation opportunity to begin to address the unlicensed spectrum crunch by making powerful sub-1-GHz unlicensed spectrum available for innovative approaches to broadband access and machine-to-machine services. A well-designed auction will allow the Commission to both free up new licensed spectrum and expand unlicensed spectrum resources."

Hence, the parties to the letter urge the FCC "to designate an ample amount of spectrum for non-exclusive unlicensed technologies, and urge Congress to allow the FCC to accomplish this task unimpeded."

FTC Releases Another Report on Mobile Apps Privacy

12/10. The Federal Trade Commission (FTC) released a staff report [42 pages in PDF] titled "Mobile Apps for Kids: Disclosures Still Not Making the Grade".

This is another in a series of FTC reports related to privacy. This report, unlike some of the prior reports was approved unanimously by the Commission.

This report follows the FTC's February 16, 2012 report [34 pages in PDF] titled "Mobile Apps for Kids: Current Privacy Disclosures are Disappointing". That report found that little or no information was available to parents about the privacy practices and interactive features of the mobile apps surveyed prior to download.

Factual Findings. The just released report finds that "many apps included interactive features or shared kids' information with third parties without disclosing these practices to parents".

This report continues that "most apps failed to provide any information about the data collected through the app, let alone the type of data collected, the purpose of the collection, and who would obtain access to the data. Even more troubling, the results showed that many of the apps shared certain information -- such as device ID, geolocation, or phone number -- with third parties without disclosing that fact to parents."

Also, "a number of apps contained interactive features -- such as advertising, the ability to make in-app purchases, and links to social media -- without disclosing these features to parents prior to download."

Recommendations. This report urges "the mobile app industry to develop and implement ``best practices´´ to protect privacy, including those recommended in the recent FTC Privacy Report".

See, the FTC's March 26, 2012 report [112 pages in PDF] titled "Protecting Consumer Privacy in an Era of Rapid Change". See also, stories titled "FTC Releases Second Report on Privacy Issues" and "Reaction to FTC Privacy Report" in TLJ Daily E-Mail Alert No. 2,357, March 26, 2012.

These recommendations are "incorporating privacy protections into the design of mobile products and services" also known as privacy by design, "offering parents easy-to-understand choices about the data collection and sharing through kids’ apps", and "providing greater transparency about how data is collected, used, and shared through kids' apps."

Legal Issues. This report makes no new recommendations that the Congress enact legislation, or that the FTC promulgate new rules. This report contains no legal conclusions.

However, this does address in several ways the applicability of the FTC Act and the Children's Online Privacy Protection Act (COPPA) to business practices involving mobile apps.

It concludes (at page 21) that there are "gaps between company practices and disclosures" and that these "discrepancies could constitute violations of COPPA or the FTC Act's prohibition against unfair or deceptive practices."

It discloses (at page 5) that "FTC staff is launching multiple nonpublic investigations to determine whether certain entities in the mobile app marketplace have violated" the COPPA, or "engaged in unfair or deceptive trade practices in violation of the FTC Act." (Footnote omitted.)

This report's use of the phrase "unfair or deceptive trade practices", rather than "deceptive trade practices", might raise the question of whether business practices of mobile apps providers could violate the FTC Act, in the absence of deception, under the "unfair" prong of Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45. For a discussion of this issue, see story titled "Commentary: Unfair v. Deceptive Conduct" in TLJ Daily E-Mail Alert No. 2,357, March 26, 2012.

But, this report also states that "Staff did not examine whether the practices observed violated the laws enforced by the Commission, and some of staff's recommendations may go beyond what would be required to comply with the law."

In addition, this report addresses (at footnote 29) the application of the FTC's proposed revisions to the COPPA to mobile apps.

See, FTC notice in the Federal Register, Vol. 77, No. 151, August 6, 2012, at Pages 46643-46653, story titled "FTC Releases COPPA Further NPRM" in TLJ Daily E-Mail Alert No. 2,418, August 2, 2012, and FTC web page with hyperlinks to comments submitted in response to this FNPRM.

The COPPA, which is codified at 15 U.S.C. §§ 6501-6506, bans operators of web sites and online services that are directed to children from collecting information from children under thirteen without parental consent.

Future FTC Actions. This report also states that the FTC "will soon issue consumer education directed to parents to help them navigate the mobile app marketplace and avoid apps that fail to provide adequate disclosures about how children’s information will be used".

It also states that the FTC "will conduct a third kids app survey once the initiatives and activities described in this report, including the Department of Commerce multistakeholder process and other self-regulatory efforts, have had a reasonable time to develop."

Association for Competitive Technology. Morgan Reed, head of the Association for Competitive Technology (ACT), stated in a release that "The rapid growth of the mobile app industry has been fueled by startups and first time developers, some of whom are still in high school. In fact 87% of apps are developed by small or micro businesses that do not have legal departments or privacy experts on staff. This report reminds us how important it is for the industry to focus attention on educating developers on privacy best practices."

Reed also stated that "We partnered with the world’s largest group of educational app developers, Parents with Apps, to run educational seminars and even create a new set of privacy disclosure icons for kids apps. We are continuing this work in 2013 and expanding it to include to all app developers." See, ACT's November 30 statement titled "ACT Launches the App Privacy Dashboard -- The Next Generation of App Privacy Icons".

Reed added that "One area of progress that the FTC missed, however, is on unique device identifiers like Apple's UDID. Apple and the other platforms are moving developers away from using device-specific identifiers that can be unified across apps and services, and are introducing alternatives to limit tracking that are app-specific for sharing with advertisers and other 3rd parties. This will make it very difficult to combine information based on these ID’s across multiple apps or the web. Additionally, the platforms have given parents very granular tools that allow them to prevent apps from accessing certain types of data (like geolocation) regardless of app settings." (Parentheses in original.)

See also, CTIA release.

Amici File Briefs With Federal Circuit in Software Patents Case

12/10. Amici curiae filed briefs with U.S. Court of Appeals (FedCir) in CLS Bank v. Alice Corp., an en banc review in a case involving software patents and 35 U.S.C. § 101.

The U.S. District Court (DC) held a patent invalid under Section 101 that involves software implementation of credit intermediation.

A divided three judge panel of the Federal Circuit issued its opinion [38 pages in PDF] on July 9, 2012, reversing the judgment of the District Court.

David Kappos, the outgoing head of the U.S. Patent and Trademark Office (USPTO), gave a speech in defense of software patents on November 20, 2012. See, story titled "Kappos Defends Software Patents" in TLJ Daily E-Mail Alert No. 2,484, December 6, 2012.

Section 101 provides, in full, that "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."

The Business Software Alliance (BSA) filed an amicus curiae brief [35 pages in PDF] in which it argued that the judgment of invalidity should be affirmed, but that the Court of Appeals should not write an opinion that upsets settled precedent.

The BSA wrote that "The principle that software-implemented inventions qualify as patentable subject matter under Section 101 has been settled law for more than thirty years." Moreover, firms have made huge investments in reliance upon this principle.

The BSA continued that "if patent protection for software were curtailed, the adverse consequences would be swift and severe. With less profit to capture from the commercialization of the fruits of research and development, businesses would divert their resources into other ventures, and software development would suffer. That would have a ripple effect on productivity across the entire economy."

It argued that "this Court should be careful not to upset this settled industry of innovators by adopting a new, narrower interpretation of Section 101."

The Electronic Frontier Foundation (EFF) and Public Knowledge (PK) filed an amicus curiae brief in which they argued that Section 101 and court opinions that have interpreted it provide no clear guidance with regard to software or business method patents, and as a consequence, "the patent system is to often serving as a tax on innovation". Now, "the technology industry needs more certainty in the interpretation and validity of dubious patents".

They cited and relied upon a paper by Mark Lemley (Stanford law school) titled "Software Patents and the Return of Functional Claiming".

The EFF and PK argued that "Implementing a more stringent interpretation of functional claiming under § 112(f) would help narrow the scope of the § 101 problem while protecting efficient and less expensive litigation vehicles that allow those with more limited resources to make meritorious defenses in court."

Google, Dell, Facebook, and other companies filed an amicus curiae brief urging the Court of Appeals to follow the Supreme Court's opinion in Mayo v. Prometheus Labs. See, story titled "Supreme Court Rules in Mayo v. Prometheus Regarding Patentable Subject Matter", in TLJ Daily E-Mail Alert No. 2,360, March 29, 2012.

This case is CLS Bank International, et al. v. Alice Corporation Pty. Ltd., U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2011-1301, an appeal from the U.S. District Court for the District of Columbia, D.C. No. 07-cv-0974, Judge Rosemary Collyer presiding. Judge Linn wrote the opinion of the three judge panel of the Court of Appeals, in which Judge O'Malley joined. Judge Sharon Prost dissented.

People and Appointments

12/10. David Vladeck, Director of the Federal Trade Commission's (FTC) Consumer Protection Bureau, announced in an FTC video that he will leave the FTC, and return to Georgetown University. He added that "I will stay on as a consultant to the FTC". This announcement comes at the end of this eight minute video on advice to consumers regarding common scams.

12/10. Verizon announced that Randal Milch, who is currently EVP and General Counsel, will replace Tom Tauke, who is currently EVP -- Public Affairs, Policy and Communications, as head of Verizon's public policy operations. See, Washington Post story by Cecelia Kang.

More News

12/10. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) held a day long workshop titled "Patent Assertion Entity Activities". See, speech by FTC Chairman Jonathan Leibowitz, presentation slides of Colleen Chien (Santa Clara University), presentation slides of Carl Shapiro (UC Berkeley), presentation slides of Timothy Simcoe (Boston University), presentation slides of Ron Epstein (Epicenter IP Group), presentation slides of Iain Cockburn (Boston University), and DOJ web page for this workshop. The DOJ and FTC have extended the deadline to submit written comments to March 10, 2013.

12/10. The Office of the U.S. Trade Representative (OUSTR) issued a statement regarding the upcoming meeting in Washington DC of the U.S.-China Joint Commission on Commerce and Trade, aka JCCT, to be held on December 18 and 19. See, identical Department of Commerce (DOC) release.

12/10. The American Antitrust Institute (AAI) filed an amicus curiae merits brief with the Supreme Court in Bowman v. Monsanto, a case involving patent exhaustion, urging reversal of the judgment of the U.S. Court of Appeals (FedCir). In its September 21, 2011 opinion the Federal Circuit refused to find exhaustion where a farmer used seeds purchased in an authorized sale for their natural and foreseeable purpose, planting. That opinion is also reported at 657 F.3d 1341. The Solicitor General filed an amicus curiae brief in August urging the Supreme Court to deny the petition for writ of certiorari. However, the Supreme Court granted certiorari on October 5, 2012. The question presented is "Whether the Federal Circuit erred by (1) refusing to find patent exhaustion in patented seeds even after an authorized sale and by (2) creating an exception to the doctrine of patent exhaustion for self-replicating technologies?" This case is Vernon Hugh Bowman v. Monsanto Company, et al., Supreme Court of the U.S., Sup. Ct. No. 11-796, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2010-1068. See, Supreme Court docket.

12/10. The Washington Times published an editorial titled "Texting away your freedom: Nosy bureaucrats want to boost their snooping powers". It states that "Americans need to take action if they want to keep Uncle Sam from spying on their smartphones."

More News

12/8. The New York Times (NYT) published an editorial titled "A Step Towards E-Mail Privacy". It praises HR 2471 [LOC | WW]. See, red line mark up of version approved by the Senate Judiciary Committee (SJC) on November 29, 2012. The NYT adds that "the bill is not expected to advance in this lame-duck session".

BLS Releases November 2012 Employment Data

12/7. The Department of Labor's (DOL) Bureau of Labor Statistics (BLS) released employment data for the U.S. for the month of November 2012.

The BLS stated in a release that the seasonally adjusted unemployment rate in the US in November was 7.7%. This is down from 7.9% in October.

However, while a decline in the unemployment rate usually suggests an improvement, the underlying data shows that the labor market actually worsened. Total employment decreased. But, since the BLS also recorded an even larger decrease in the number of people participating in the labor force, the unemployment rate dropped. Decreases in the labor force participation rate suggests that many people gave up looking for work.

In the tech sectors, the employment situation remained lackluster. However, there was a large increase in employment in November in "Motion picture & sound recording". Also, the "Computer systems design & related services" sector continued its job growth trend.

BLS Table A-1, which is based on household surveys, shows that the seasonally adjusted total labor force shrunk from 155,641,000 to 155,291,000, a decrease of 350,000. The labor force participation rate decreased from 63.8% in October to 63.6% in November. This same table shows that total employment shrank from 143,384,000 to 143,262,000, a decrease of 122,000. Since the BLS moved so many people from being in the labor force, to being outside the labor force, the BLS reported that unemployment declined from 12,258,000 to 12,029,000.

BLS Table B-1, which is based upon business surveys, reveals employment trends in various industry sectors, including information and communications technology (ICT) sectors. The BLS's categories do not facilitate precise analysis of trends in ICT. Nevertheless, the data set out in the table below contains ICT related categories.

The table below contains ICT related excerpts from the BLS table titled "Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail". This is the seasonally adjusted data.

Table: Total Number of Employees in Thousands by ICT Industry Sector
  Computer & peripheral equipment 161.1 164.8 164.5 164.2
  Communication equipment 113.1 107.8 107.0 106.7
  Semiconductors & electronic comp. 387.0 384.4 383.8 382.5
Information Services:        
  Publishing industries, except Internet 745.8 738.4 736.6 733.6
  Motion picture & sound recording 359.5 369.3 365.0 379.6
  Broadcasting, except Internet 279.0 279.1 278.4 278.9
  Telecommunications 850.3 828.5 829.0 829.3
  Data processing, hosting & related serv. 244.1 240.2 240.2 239.6
  Other information services 165.1 170.6 171.4 172.1
Professional Services:        
  Legal services 1,116.7 1,121.3 1,122.3 1,122.5
  Computer systems design & related serv. 1,553.1 1,617.2 1,623.9 1,631.0
Source: BLS, December 7, 2012 employment report, Table B-1.

The BLS category of "Computer Systems Design & Related Services" is one of the bright spots in BLS employment data. There was job growth in this category of 7,100 from October to November, and job growth of 77,900 from November of 2011 to November of 2012, or about 5%.

This BLS category includes about 250 subcategories. The subcategories with the large numbers of workers include "Computer Systems Analysts", "Computer Programmers", "Software Developers, Applications", "Software Developers, Systems Software", "Database Administrators", "Network and Computer Systems Administrators", "Computer Support Specialists", "Information Security Analysts, Web Developers, and Computer Network Architects", "Computer Hardware Engineers", and "Computer and Information Systems Managers". See, May 2011 BLS web page on "Computer Systems Design & Related Services".

Also, employment in the BLS category of "Motion Picture and Sound Recording" grew by 14,600 from October to November, an increase of 4% in just one month.

People and Appointments

12/7. Steve Holzen joined Invotex as a Director. He focuses on the valuation of intellectual property (IP) and the determination of economic damages in litigation involving patent infringement, theft of trade secrets, trademark infringement and violations of licensing agreements. See, Invotex release.

More News

12/7. President Obama signed HR 6063 [LOC | WW], the "Child Protection Act of 2012", sponsored by Rep. Lamar Smith (R-TX), the Chairman of the House Judiciary Committee (HJC). See, White House news office release. This bill contains much of the content of HR 1981 [LOC | WW], known as the data retention bill, but without the data retention mandates and related provisions.

12/7. The Department of Health and Human Services (DHHS) published a notice in the Federal Register (FR) that announces, describes, recites, and requests comments on, its "interim final" changes to the health information technology rules published on September 4, 2012. See, FR, Vol. 77, No. 236, December 7, 2012, at Pages 72985-72991. See also, notice in the FR, Vol. 77, No. 171, September 4, 2012, at Pages 54163-54292. The deadline to submit comments is January 7, 2013.

FCC, Public Safety, and Four Wireless Providers Announce Text to 911 Agreement

12/6. The Federal Communications Commission (FCC) announced in a release that AT&T, Verizon, Sprint, T-Mobile, APCO International and NENA "have agreed to accelerate the availability of text-to-911".

This agreement exists in the form of a letter to the five FCC Commissioners.

The FCC stated that this agreement will "ensure that over 90 percent of the nation's wireless consumers" will be able to access emergency services by sending a text message to 911.

The FCC stated that "the carriers have committed to provide an automatic ``bounce back´´ text message to notify consumers if their attempt to reach 911 via text message was unsuccessful because this service is not yet available in their area. Such a message would instruct the recipient to make a voice call to a 911 center. The four carriers will fully implement this ``bounce back´´ capability across their networks by June 30, 2013."

The FCC is scheduled to adopt a Report and Order (R&O) and Further Notice of Proposed Rulemaking at its December 12 Commission meeting regarding expanding the 911, E911 and NG911 regime to text messaging (SMS to 911) and other technologies. This is PS Docket Nos. 11-153 and 10-255.

The FCC adopted a Notice of Inquiry (NOI) [36 pages in PDF] on December 21, 2010. It is FCC 10-200. The FCC adopted a Notice of Proposed Rulemaking (NPRM) [81 pages in PDF] on September 22, 2011. It is FCC 11-134. See also, story titled "FCC Releases Agenda for December 12 Meeting" in TLJ Daily E-Mail Alert No. 2,484, December 6, 2012.

The Association of Public-Safety Communications Officials International stated in a release that "This agreement paves the way for a national approach to enabling the public to reach 9-1-1 via text messages, which can be especially important for persons with disabilities and for any situations in which a voice call cannot be made.

The National Emergency Number Association (NENA) stated in a release that "the agreement is expected to hasten the day when all Americans can call for emergency aid via text messages".

See also, statement by AT&T's Bob Quinn.

Senate Passes Russia Trade Bill

12/6. The Senate passed HR 6156 [LOC | WW], the "Russia and Moldova Jackson-Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act of 2012", a bill to establish permanent normal trade relations (PNTR) with Russia, by a vote of 92-4. See, Roll Call No. 223.

The House passed this bill on November 16, 2012 by a vote of 365-43. See, Roll Call No. 608. President Obama stated in a release on December 6 that "I look forward to receiving and signing this legislation."

President Obama stated that this bill "will ensure that American businesses and workers are able to take full advantage of the WTO rules and market access commitments that the United States worked so hard to negotiate. We are also one step closer to realizing job-creating export opportunities and leveling the playing field for American workers, farmers, ranchers, and service providers. My Administration will continue to work with Congress and our partners to support those seeking a free and democratic future for Russia and promote the rule of law and respect for human rights around the world."

Sen. Orrin Hatch (R-UT) stated in the Senate that this bill "is going to cause Russia to have to live up to some international trade and international intellectual property laws. We in this country believe in obeying those laws, and I have to say Russia, India, and China have invaded intellectual property in areas they shouldn't have. Hopefully, this type of agreement, PNTR, will help alleviate that problem."

Sen. Max Baucus (D-MT) stated in the Senate that "I see this too as a vote to help propel us to the next level of trade expansion. One is the TPP, Trans-Pacific Partnership, which is being worked on by the United States and other Asian countries. I think it is a dramatic opportunity for growth.  Second, working with Europe, the potential free-trade agreement with Europe".

Robert Holleyman, head of the Business Software Association (BSA), stated in a release that "With passage of this legislation, America can now use the full array of tools available through the World Trade Organization to ensure Russia strengthens intellectual property protections and further opens its market to software and other technology products and services."

Gary Shapiro, head of the Consumer Electronics Association (CEA), stated in a release that "Without normalized trade relations, U.S. companies have been at a significant disadvantage since Russia joined the World Trade Organization earlier this year. Normalized trade relations with Russia, the ninth largest economy in the world, will open markets to American businesses, allowing them to compete and meet the demands of the growing consumer class of Russia, while helping create more jobs on the home front."

Microsoft's Fred Humphries stated in a release that this bill "ensures that America now will be able to take advantage of the benefits of their joining the WTO, and the enforcement of the rule of law in key areas such as Intellectual Property Rights protection and Services".

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that "CCIA has long advocated the recognition of Internet censorship as both a human rights issue and a trade barrier issue. The USTR reporting requirement on barriers to digital trade in Russia constitutes legislative recognition of the importance of digital trade and the significance of new trade barriers in a digital global economy. It is a good first step toward building in better provisions to discourage Internet censorship as part of our future trade relations. This vote comes amid serious concerns regarding Russian policies on Internet filtering and blacklisting enacted in recent months. Internet censorship will need to be addressed as part of our continued vigilance on Russia's human rights violations."

DOJ's Brandenburger Discusses International Antitrust Cooperation

12/6. The Rachel Brandenburger of the Department of Justice's (DOJ) Antitrust Division gave a speech [17 pages in PDF] in Brussels, Belgium, titled "International Cooperation: Taking a Broader View".

She discussed (at pages 4 and 10-11) cooperation between the US DOJ and the European Commission (EC) on the DOJ's "challenge to anticompetitive conduct by Apple" and book publishers regarding e-books. She also briefly referenced (at page 5) most favored nation (MFN) clauses (which are at issue in the Apple cases), and the recent DOJ workshop on MFNs.

She also discussed (at pages 5-7) standard essential patents (SEPs). She also touched on (at pages 4-5) the DOJ's LCD price fixing cases.

She said that "the Antitrust Division has made cooperation in competition matters, and particularly in enforcement matters, a priority". She added that "International cooperation in competition cases is becoming more important and widespread, but is in some ways still at a formative stage."

She elaborated that "case cooperation is more common in merger cases than in unilateral conduct cases" and that "enforcement cooperation in cartel cases ... has so far been limited to a somewhat smaller group of agencies than is the case for mergers".

She noted that antitrust agencies "face constraints in case cooperation" such as "legal limitations on their ability to share confidential information and the absence of waivers from parties or third parties to share such information."

But, "many agencies can rely on confidentiality waivers by parties or third parties as a legal basis for exchanging statutorily-protected information. The use of such waivers has become commonplace in merger cases, at least for some agencies, but it is less so in cartel and unilateral conduct cases. Also, not all parties to investigations have supported a cooperative agency approach, and some parties have tried to leverage one agency’s investigation against another’s." (Footnote omitted.)

She asked rhetorically "whether current cooperation frameworks will suffice for future needs". She stated that in addition to the US and the European Competition Network (ECN), there is "a core group of only a dozen or so agencies worldwide that regularly participate in case cooperation". She said that this "suggests that there is potential for generating broader participation in international case cooperation efforts within the current framework."

"In addition, newer or smaller agencies may, because of limited resources, the character of their national economies, or their enforcement books of business, only periodically find it useful to cooperate in cases. However, when those agencies do wish to cooperate, they will want to have access to cooperation mechanisms that accommodate their needs, as well as those of the larger and more established agencies."

Senate Judiciary Committee Holds Over Geolocation Data Bill

12/6. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over consideration of S 1223 [LOC | WW], the "Location Privacy Protection Act of 2011".

This is an Electronic Communications Privacy Act (ECPA) reform bill sponsored by Sen. Al Franken (D-MN). This bill is again on the SJC agenda for its next meeting on December 13, 2012.

This bill would amend the ECPA's Stored Communications Act (SCA), which is codified at 18 U.S.C. §§ 2701-2712, by adding a new Section 2713, titled "Voluntary location tracking of electronic communications devices".

This section would provide that "a covered entity may not knowingly collect, receive, record, obtain, or disclose to a nongovernmental individual or entity the geolocation information from an electronic communications device without the express authorization of the individual that is using the electronic communications device."

This section limits commercial sale and distribution of geolocation data. However, this section would not affect access to geolocation information by government law enforcement, intelligence, public safety, or regulatory agencies. This section also includes exemptions for common carriers and cable companies.

This bill would also add other new sections in Title 18 to create new criminal prohibitions regarding "Geolocation information used in interstate domestic violence or stalking" and "Sale of geolocation information of young children".

Sen. Al FrankenSen. Franken (at right) stated in a release that "Every smart phone out there is a personal tracking device that transmits our location" and "the law allows companies to collect and disclose our location information without our knowledge or consent -- and that a lot of companies are doing just that."

"What's worse," he continued, "bad actors are using these same loopholes to develop and market stalking apps to the public. I've heard harrowing accounts from Minnesota women about their experiences with GPS stalking. My legislation protects people’s privacy and will help put an end to GPS stalking by requiring all smartphone, app, and wireless companies to get consumers' consent before collecting or sharing their location, and by creating special protections against stalking apps.”

Sen. Charles Grassley (R-IA) stated at the meeting that "I spoke with Sen. Franken yesterday and he agreed that we need to continue to work on this bill. His staff and mine have discussed some concerns that have been voiced by industry and the Department of Justice. Almost all of the concerns I have heard of relate to the commercial portion of the bill, and not the domestic violence provisions."

On December 29, the SJC amended and approved another ECPA reform bill, HR 2471 [LOC | WW | HTML], an untitled bill that would require a warrant for accessing cloud stored e-mail. See, story titled "Senate Judiciary Committee Approves Leahy Bill to Require Warrant for Accessing Cloud Stored E-Mail" in TLJ Daily E-Mail Alert No. 2,479, November 30, 2012.

Sen. DeMint to Leave Senate to Lead Heritage Foundation

12/6. Sen. Jim DeMint (R-SC) announced that he will resign from the Senate, to become President of the Heritage Foundation. See, Sen. DeMint's release.

The Heritage Foundation (HF) is a Washington DC based conservative think tank that conducts research, publishes papers, hosts events, and provides testimony on a wide range of issues. It has deep pockets and a deep bench of policy analysts. It was founded 40 years ago, but came to prominence with the election of former President Reagan, and the Republican take over of the Senate in 1980. Its offices are located on the Senate side of Capitol Hill, and its stronger ties have been with the Senate.

Sen. DeMint served three terms in the House of Representatives. He was first elected to the Senate in 2004, when former Sen. Ernest Hollings (D-SC) retired. Sen. DeMint was re-elected to the Senate in 2010. He had four years remaining in his term.

He stated in his release that "I'm leaving the Senate now, but I'm not leaving the fight. I've decided to join The Heritage Foundation at a time when the conservative movement needs strong leadership in the battle of ideas. No organization is better equipped to lead this fight and I believe my experience in public office as well as in the private sector as a business owner will help Heritage become even more effective in the years to come."

Sen. DeMint has been conservative, outspoken, and supportive of Tea Party candidates, even in intra party contests. He has also been publicly confrontational with both Democrats and fellow Senate Republicans in Senate policy debates.

With the retirements of Sen. Kay Hutchison (R-TX) and Sen. Olympia Snowe (R-ME), Sen. DeMint would have been the most senior Republican on the Senate Commerce Committee (SCC), and the most likely member to become the ranking Republican in the 113th Congress.

Sen. Jim DeMintIn information and communications technology, Sen. DeMint (at right) has been an advocate of preventing the Federal Communications Commission (FCC) from imposing network neutrality mandates on broadband internet access service providers.

More broadly, he has advocated greater reliance upon free markets in ICT. In particular, he sought to limit FCC rule making and adjudicatory discretion by introducing legislation that, if enacted, would have required the FCC to apply certain principles of antitrust law, and the economic analysis underlying antitrust.

See, S 3624 [LOC | WW], the "Freedom For Consumer Choice Act" or "FCC Act", introduced by Sen. DeMint the 111th Congress. See also, story titled "Senate Republicans Introduce Bill to Constrain FCC by Antitrust Principles" in TLJ Daily E-Mail Alert No. 2,111, July 26, 2010.

Also, in December 2005, in the 109th Congress, he introduced the predecessor bill, S 2113, the "Digital Age Communications Act of 2005" or "DACA".

FCC Chairman Julius Genachowski has reason to be relieved by Sen. DeMint's departure from the Senate.

However, Sen. John Thune (R-SD), who was first elected to the Senate in 2004 by unseating former Sen. Tom Daschle (D-SD), is next in Republican seniority on the SCC. While less confrontational than Sen. DeMint, he was also a cosponsor of the "FCC Act".

Sen. John Rockefeller (D-WV), the Chairman of the SCC, stated in a release that "I wish Jim DeMint well in his new position at the Heritage Foundation. I look forward to working with whomever the Republicans select as the Ranking Member in the 113th Congress. I know the Commerce Committee will continue to work in a bipartisan manner to create economic growth, invest in our future, and protect consumers."

Gigi Sohn, head of the Public Knowledge (PK), stated in a release that "Although it's a surprise, we welcome and extend our congratulations to Sen. DeMint on his new post at the Heritage Foundation. As a member of the think tank community, we look forward to working together on common ground issues. The future holds many opportunities for Public Knowledge and the Internet and Technology arm of the Heritage Foundation to work together."

Republicans Assigned to Subcommittee of House Commerce Committee

12/6. Rep. Fred Upton (R-MI), Chairman of the House Commerce Committee (HCC) announced the assignment of Republican members of the Subcommittees of the HCC. See, HCC release.

The Chairman and Vice Chairman of the Subcommittee on Communications and Technology will be Rep. Greg Walden (R-OR) and Rep. Bob Latta (R-OH). The other members will be Rep. John Shimkus (R-IL), Rep. Lee Terry (R-NE), Rep. Mike Rogers (R-MI), Rep. Marsha Blackburn (R-TN), Rep. Steve Scalise (LA), Rep. Leonard Lance (NJ), Rep. Brett Guthrie (KY), Rep. Cory Gardner (CO), Rep. Mike Pompeo (KS), Rep. Adam Kinzinger (IL), Rep. Billy Long (MO), Rep. Renee Ellmers (NC), Rep. Joe Barton (TX), and Rep. Upton.

The Chairman and Vice Chairman of the Subcommittee on Commerce, Manufacturing, and Trade will be Rep. Lee Terry (R-NE) and Rep. Leonard Lance (R-NE). The other members will be Rep. Marsha Blackburn (TN), Rep.Gregg Harper (MS), Rep. Brett Guthrie (KY), Rep. Pete Olson (TX), Rep. David McKinley (WV), Rep. Mike Pompeo (KS), Rep. Adam Kinzinger (IL), Rep. Gus Bilirakis (FL), Rep. Bill Johnson (OH), Rep. Billy Long (MO), Rep. Joe Barton (TX), and Rep. Upton.

See also, story titled "Rep. Upton Announces House Commerce Committee Subcommittee Chairmen for 113th Congress" in TLJ Daily E-Mail Alert No. 2,478, November 29, 2012.

People and Appointments

12/6. The Senate confirmed Mark Walker to be a Judge of the U.S. District Court (NDFl) by a vote of 94-0. See, Roll Call No. 224.

12/6. The Senate confirmed Terrence Berg to be a Judge of the U.S. District Court (EDMich) See, Congressional Record, December 6, 2012, at Page S7689.

12/6. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved by voice vote the following judicial nominations: Katherine Failla (to be a Judge of the USDC/SDNY), Troy Nunley (USDC/EDCal), Sheri Chappell (USDC/MDFl), Pamela Ki Mai Chen (USDC/EDNY), and Mark Barnett (U.S. Court of International Trade).

More News

12/6. The Federal Trade Commission (FTC) released a notice announcing recent Hart Scott Rodino (HSR) grants of early termination of the waiting period provided by law and the premerger notification rules. The FTC granted early termination regarding (1) Equifax Inc., Computer Sciences Corporation, CSC Credit Services, Inc., No. 20130257, (2) Verizon Communications Inc., Leap Wireless International, Inc., Cricket License Company, LLC, No. 20130337, and (3) Leap Wireless International, Inc., Deutsche Telekom AG, T-Mobile License LLC, No. 20130351.

12/6. The Copyright Office (CO) published a notice in the Federal Register (FR) regarding its proposed fee schedule for filing cable and satellite statements of account. The deadline to submit initial comments is 5:00 PM on January 7, 2013. The deadline to submit reply comments is 5:00 PM on January 22, 2013. See, FR, Vol. 77, No. 235, December 6, 2012, at Pages 72788-72791.

12/6. The Federal Trade Commission (FTC) published a notice in the Federal Register (FR) regarding its new rule implementing the identity theft red flag provisions of Section 615 of the Fair Credit Reporting Act (FCRA). See, FR, Vol. 77, No. 235, December 6, 2012, at Pages 72712-72715. The FTC released a draft of this notice on November 30. See, story titled "FTC Rule Narrows Definition of Creditor in ID Theft Red Flag Rules" in TLJ Daily E-Mail Alert No. 2,481, December 3, 2012.

12/6. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) released its draft NIST IR-7298 Rev. 2 [222 pages in PDF] titled "Glossary of Key Information Security Terms". The deadline to submit comments is January 15, 2013.

12/6. The U.S. Court of Appeals (5thCir) issued its opinion [23 pages in PDF] in Abraham v. Alpha Chi Omega, affirming the judgment of the U.S. District Court (NDTex). This case involves application of the doctrine of laches to the issue of trademark infringement. This case is Thomas Kenneth Abraham v. Alpha Chi Omega, et al., U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 12-10525, an appeal from the U.S. District Court for the Northern District of Texas. Judge Garza wrote the opinion of the Court of Appeals, in which Judges Jones and Prado joined.

12/6. The Information Technology and Innovation Foundation (ITIF) released another in its series of reports on the state of the "new economy" by state. This report [84 pages in PDF] is titled "The 2012 State New Economy Index: Benchmarking Economic Transformation in the States".

Go to News from December 1-5, 2012.