TLJ News from April 21-25, 2013

Rep. Engel Again Introduces Cell Phone Theft Prevention Act

4/25. Rep. Eliot Engel (D-NY) introduced HR 1730 [LOC | WW], the "Cell Phone Theft Prevention Act of 2013". This is a revised version of a similar bill sponsored by Rep. Engel in the 112th Congress. These bills would require service providers to not provide service to a stolen phone.

The just introduced bill would add a new Section 343 to Title 47 (Communications Act) that provides that "A provider of commercial mobile service or commercial mobile data service may not provide service on a mobile device that has been reported to such provider as stolen -- (A) by the person who holds the account with respect to such service; or (B) by another provider of commercial mobile service or commercial mobile data service".

On March 22, 2012, Rep. Engel and others introduced HR 4247 [LOC | WW], the "Cell Phone Theft Prevention Act of 2012". See, story titled "House Democrats Introduce Bill to Enable Service Blacklisting and Data Erasure for Stolen Mobile Devices" in TLJ Daily E-Mail Alert No. 2,356, March 25, 2012.

However, the Congress took no action on that bill, in part because wireless service providers took the initiative first. They created a program based upon integrated databases of unique identifiers of mobile communications devices reported as stolen, by participating wireless service providers. They also committed to not provide service to the unique identifiers associated with devices reported as stolen. See. story titled "Wireless Service Providers Announce Plans for Disabling Stolen Smart Phones" in TLJ Daily E-Mail Alert No. 2,369, April 12, 2012.

Rep. Eliot EngelRep. Engel (at right) stated in a release that "It makes no sense to reward the thief by continuing service on a stolen cell phone. It’s simple common sense that the victim of a crime isn’t responsible for service they are no longer receiving. If service is cut off on a stolen phone, it just becomes a useless brick and the motivation to threaten, or commit violence, to steal a phone goes away. By cutting off service, wireless companies will do wonders for public safety, and I am confident they will support this legislation".

This bill would accomplish some things that the service providers cannot by private agreement. For example, it would amend Title 18 (criminal code) to make it "unlawful to -- (A) knowingly remove, obliterate, tamper with, or alter a mobile device identification number; or (B) knowingly use, produce, traffic in, have control or custody of, or possess hardware or software, knowing it has been configured to engage in the conduct described in subparagraph (A)."

The only original cosponsor of the just introduced bill is Delegate Eleanor Norton (D-DC).

The bill was referred to the House Commerce Committee (HCC). However, the amendment to Title 18 could serve as the basis for an additional referral to the House Judiciary Committee (HJC).

Senate Judiciary Committee Passes Bill to Require Warrant for Accessing Cloud Stored E-Mail

4/25. The Senate Judiciary Committee (SJC) amended and approved S 607 [LOC | WW], the "Electronic Communications Privacy Act Amendments Act of 2013".

This bill would require that the government obtain a court warrant to access cloud stored e-mail. Sen. Patrick Leahy (D-VT) and Sen. Mike Lee (R-UT) introduced this bill on March 19, 2012. See, story titled "Sen. Leahy and Sen. Lee Introduce Bill to Require Warrant to Access Cloud Stored E-Mail" in TLJ Daily E-Mail Alert No. 2,538, March 21, 2013.

However, the SJC considered an earlier version of this bill late in the 112th Congress. 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.

The key provision of S 607 would amend 18 U.S.C. § 2703 to provide that "A governmental entity may require the disclosure by a provider of electronic communication service or remote computing service of the contents of a wire or electronic communication that is in electronic storage with or otherwise stored, held, or maintained by the provider only if the governmental entity obtains a warrant issued using the procedures described in the Federal Rules of Criminal Procedure (or, in the case of a State court, issued using State warrant procedures) that is issued by a court of competent jurisdiction directing the disclosure." (Parentheses in original.)

At the April 25 mark up the SJC approved one amendment [2 pages in PDF] offered by Sen. Leahy to clarify that it would not affect other specified surveillance provisions.

It provides that "Nothing in this Act or an amendment made by this Act shall be construed to preclude the acquisition by the United States Government of -- (1) the contents of a wire or electronic communication pursuant to other lawful authorities, including the authorities under chapter 119 of title 18 (commonly known as the ‘‘Wiretap Act’’), the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801 et seq.), or any other provision of Federal law not specifically amended by this Act; or (2) records or other information relating to a subscriber or customer of any electronic communications service or remote computing service (not including the content of such communications) pursuant to the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801 et seq.), chapter 119 of title 18 (commonly known as the ‘‘Wiretap Act’’), or any other provision of Federal law not specifically amended by this Act."

The SJC also approved a second amendment [4 pages in PDF] offered by Sen. Charles Grassley (R-IA) that requires, and specifies the contents of, a report in 2015 by the Government Accountability Office (GAO) on the impact of this bill.

The SJC approved both amendments, and the bill as amended, without roll call votes.

Sen. Leahy said at the mark up that people should have the same privacy in cloud stored records as records stored in filing cabinets. He added that "we are concerned about the Internal Revenue Service, or other government agencies, reading emails without getting a warrant".

Sen. Grassley said that he still "has some concerns with the legislation". He said that the SJC has not held a hearing in this Congress, and should hold one before the full Senate takes up the bill. Nevertheless, he said that "there is a need to update" the 1986 Act, and this bill could be reported at this time.

He also noted that "we have no official position from the Justice Department".

He also expressed concern, along with Sen. Jeff Sessions (R-AL), about the impact of this bill on civil investigations by the Securities and Exchange Commission (SEC).

Sen. Sessions also argued that there is a "diminished expectation of privacy" in cloud stored e-mail.

Sen. Sheldon Whitehouse (D-RI) and Sen. Dianne Feinstein (D-CA) also expressed concerns with the bill, but did not oppose it at this time.

The opponents of this bill include many federal government regulatory and law enforcement agencies and officials.

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that "This is a long overdue step toward bringing our online privacy laws closer to both our existing 4th amendment protections and our reasonable expectations for privacy."

The Tech Freedom's Berin Szoka stated in a release that "This is the most important step towards long-overdue ECPA reforms", but that Congress should also enact a "a warrant requirement for location data".

House Subcommittee Holds Hearing on Waste in FCC Lifeline Subsidy Program

4/25. The House Commerce Committee's (HCC) Subcommittee on Communications and Technology (SCT) held a hearing on the Federal Communications Commission's (FCC) lifeline universal service tax and subsidy program.

The Lifeline program, which is described by the FCC as subsidization of service for poor people, is growing rapidly, in significant part because it now covers wireless phone service, and much of the subsidization is wasted on people who are not poor.

Other FCC universal service programs, including the e-rate subsidies for schools and libraries, and the high cost program, have also long been plagued by waste, fraud and abuse. And, there have been numerous Congressional hearings, mostly in HCC subcommittees, since shortly after passage of the Telecommunications Act of 1996, on waste, fraud and abuse of FCC subsidy programs.

Rep. Greg Walden (R-OR), the Chairman of the SCT, stated that "there is near unanimity among the FCC, both parties of Congress, and almost anyone familiar with the program that the Lifeline fund has been fraught with waste, fraud, and abuse and that the money has not been spent as wisely as it should have been."

"Last year, the FCC spent $2.2 billion of other people's money on the Lifeline program", Rep Walden wrote in his opening statement. "Carriers provide discounted service and collect the difference from the program. Some give away phones to gain the subscribers and the recurring revenue."

"The fund has increased 266 percent since 2008 and grown almost six-fold since 1998, all while the cost of phone service has gone down. Despite the limit of one subsidized subscriber per household, published reports suggest some subscribers have eight or more phones with subsidized service".

He continued that "it's not clear the money is even really helping low-income families. According to some reports, as many as 41 percent of those receiving Lifeline support either could not demonstrate eligibility for the subsidy or refused to respond to requests for certification."

Rep. Walden said that "staying on the present course seems out of the question". He posed many rhetorical questions. "Should the program be eliminated? If not, should a freeze be put in place until reforms are complete? Should the program be placed under a cap or budget?"

Rep. Doris Matsui (D-CA) stated that "We need to reform and modernize Lifeline, not eliminate it", and "it must account for the Internet economy. Nearly 100 million Americans still have not adopted broadband, which is only more concerning given more than 80 percent of available jobs in this country now require online applications."

Moreover, prior to the hearing, Rep. Matsui introduced a bill that would expand the Lifeline program to include subsidized broadband internet access service. See, HR 1685 [LOC | WW] the "Broadband Adoption Act of 2013". See also, related story in this issue titled "Rep. Matsui Introduces Bill to Expand Lifeline Program to Include Broadband Service Subsidies".

The FCC created the Lifeline program in 1985 as a cross subsidy program to provide access by low income persons to basic telephone service. At the time service was landline, there was generally one service provider, and the program subsidized part but not all of a person's monthly phone bill.

The Congress codified FCC universal service tax and subsidy programs in the Telecommunications Act of 1996. See, 47 U.S.C. § 254.

The FCC later expanded the program to cover wireless service, and in 2005, non-facilities based wireless service providers. See, Report and Order [68 pages in PDF], also known at the "Eligible Telecommunications Carrier Order" or "ETC Order", adopted on February 25, 2005, and released on March 17, 2005. It is FCC 05-46 in CC Docket No. 96-45. See also, the FCC Order [13 pages in PDF], also known as the "TracFone Forbearance Order", adopted on September 6, 2005, and released on September 8, 2005. It is FCC 05-165 in CC Docket No. 96-45.

Such service providers proliferated. Also, until recently, the FCC's rules allowed people to receive Lifeline subsidies without any showing of eligibility.

Julie VeachThe FCC's Julie Veach (at right) testified at the hearing that "consumers in most states did not have to prove that they were eligible for Lifeline. Rather, most subscribers only had to self-certify their eligibility. Based on verification data collected by the states and the Commission, it was apparent that ineligible consumers were receiving Lifeline supported service." See, prepared testimony.

In response, the FCC adopted a Report and Order and Further Notice of Proposed Rulemaking (FNPRM) [299 pages in PDF] last year that pertains to both its Lifeline and Link Up universal service tax and subsidy programs. The FCC adopted that item on January 31, 2012 and released the text on February 6, 2012. It is FCC 12-11 in WC Docket Nos. 11-42, 03-109, and 12-23, and CC Docket No. 96-45.

The R&O portion of that item pertaining to FCC Lifeline subsidies purports to establish both eligibility criteria and certification requirements. Veach said that it is resulting in "savings".

Veach, who is Chief of the FCC's Wireline Competition Bureau (WTB), testified at the hearing that "The FCC takes seriously its responsibility to ensure its rules are followed and to identify and deter any future program abuse. Indeed, the FCC has adopted new requirements to increase oversight of Lifeline providers and enhance the auditing program."

However, she also pointed out that in most states key aspects of the Lifeline program are run by state government agencies, including the designation of eligible telecommunications carriers (ETCs) for the Lifeline program.

Geoff Feiss of the Montana Telecommunications Association (MTA) wrote in his prepared testimony that the Lifeline program has grown because of "an influx of prepaid wireless providers" receiving subsidies. He said also that while the FCC 2012 order achieved savings, "there is reason to believe that the savings may bottom out in the near future, and the Lifeline Program may return to a pattern of continued growth".

Feiss offered this recommendation. "The Lifeline Program is the only universal service program that has not been put on a budget. It's time to put the program on a budget."

Phillip Jones, head of the National Association of Regulatory Utility Commissioners (NARUC), wrote in his prepared testimony that the current problems of program growth and ineligible recipients began with the FCC's 2005 decision to permit "non-facilities based, wireless providers to enter the Lifeline market. They developed business plans not only providing low-income consumers with free cell phones and an allotment of free minutes each month, but also generated healthy profits."

Similarly, the FCC's 2012 R&O (at paragraph 23) stated that "Since 2005, a number of pre-paid wireless providers have become Lifeline-only ETCs, competing for low-income subscribers by marketing telephone service that provides a specified number of minutes at no charge to the consumer. This development has expanded choices in many states for low-income consumers, who now have greater access to mobile services than a decade ago, but it has also led to significant growth in the Fund in the last several years". (Footnotes omitted.)

Jones elaborated that "the move to wireless meant the physical connection to the carrier and the customer to a specific geographic location was severed. This undermined the first line of defense against duplicative services and ineligible recipients. The creation of ``free´´ plans also eliminated any financial incentive for customers not to seek duplicate services and further weakened the connection the consumer has with providers associated with paying a monthly bill. Before the most recent recertification requirement was enacted, a Lifeline recipient could enroll and obtain a free wireless device from a third party agent on the street, receive their allotted minutes each month and never interact directly with the service provider. The elimination of these service characteristics opened up opportunities for fraud and abuse that didn’t exist before."

Christopher McCabe of the CTIA recommended in his prepared testimony that the first step to be taken is for the "FCC's 2012 reforms to be fully implemented", and especially with "the creation of the national duplicate database" to prevent Lifeline "double dip" consumers. He also recommended the "development of a national eligibility database".

He did not address the privacy implications of creating national databases of personally identifiable information that would be accessible by any of hundreds of carriers.

He opposed limiting the size of the program. He opposed limiting wireless carrier eligibility to facilities-based wireless providers. He also opposed imposing a co-payment obligation.

Jessica Gonzalez of the National Hispanic Media Coalition wrote in her prepared testimony that the Lifeline "program is working precisely as intended".  See also, prepared testimony of Billy Jack Gregg.

See also, story titled "House Commerce Committee Republicans Write FCC Regarding Growth, Waste and Abuse in Lifeline Subsidy Program" in TLJ Daily E-Mail Alert No. 2,542, March 27, 2013.

Senate Adjourns Until May 6 Without Passing Internet Sales Tax Bill

4/25. Sen. Harry Reid (D-NV) announced in a nearly empty Senate chamber late on Thursday, April 25 that the Senate will adjourn until Monday, May 6, without passing S 743 [LOC | WW], a bill that would authorize states to compel out of state retailers to collect sales taxes on internet and other remote sales.

This is a setback for Sen. Reid, who had attempted to force this bill through the Senate, on short notice, and without review and mark up by the committee with jurisdiction, the Senate Finance Committee (SFC). This delay gives opposition groups more time to put into play a grass roots campaign to defeat the bill.

Sen. Harry ReidSen. Reid (at left) said that the Senate will pass S 743 when it returns in May.

Opponents of the bill have been waging a filibuster. Sen. Reid prevailed on the first cloture vote (which requires 60 votes for passage) on Monday, by a vote of 74-20. See, Roll Call No. 107, and story titled "Senate Invokes Cloture on Internet Sales Tax Bill" in TLJ Daily E-Mail Alert No. 2,552, April 22, 2013.

Sen. Jeanne SheehanSen. Max Baucus (D-MT), the Chairman of the SFC, and Sen. Ron Wyden (D-OR), a senior member of the SFC, are leading opponents of the bill. Both also represent states that have no state sales tax.

Sen. Baucus also announced on Monday, April 22, that he will not run for re-election in 2014, thereby diminishing the Democrats' chances of maintaining their majority in the Senate. However, he did not associate his decision not to run with Sen. Reid's decision to snub his committee.

See also, Sen. Baucus's April 22 web page titled "Baucus Throws Down The Gauntlet In Fight Against Online Sales Tax".

Sen. Reid taunted the filibustering Senators on Wednesday, April 24. "We have a small number of Senators who are holding this up, stalling. This has 50 Democratic votes and at least 25 Republican votes."

These Senators "are playing procedural games", but, Sen. Reid said, "There is no chance they can prevail. We have three States basically holding up this legislation."

"We are going to finish this legislation this week." And, said Sen. Reid, "If we have to be here Friday and Saturday, I am telling everybody we are going to finish this bill."

Later in the day, the Senate voted on a motion to proceed to S 743. It passed by a vote of 74-23. See, Roll Call No. 110. Democrats from three states voted no -- Sen. Baucus, Sen. Jon Tester (D-MT), Sen. Wyden, Sen. Jeff Merkley (D-OR), and Sen. Jeanne Shaheen (D-NH) -- along with 18 Republicans.

On Thursday, at 5:30 PM the Senate voted on a second motion to invoke cloture. It narrowly passed by a vote of 63-30. See, Roll Call No. 111. Sen. Baucus, Sen. Tester, Sen. Wyden, Sen. Merkley, and Sen. Sheehan voted no, along with 25 Republicans.

Over the course of three votes, opposition grew from 20 to 23 to 30 votes.

Also, Sen. John Cornyn (R-TX) and Sen. Ted Cruz (R-TX) missed the April 25 vote, due to the opening ceremony for the George W. Bush Presidential Library and Museum at Southern Methodist University in Dallas, Texas on April 25. Both voted no in the April 22 and 24 votes.

Sen. Cruz stated in a release that "Had I been present for the vote, I would have emphatically voted `no.´"

"Congress should not pass a massive new Internet sales tax", said Sen. Cruz. "The Democratic leadership should not be doing the bidding of major corporate lobbyists, at the expense of mom-and-pop retailers across America. Forcing small Internet retailers to comply with the taxing authority of over 9600 jurisdictions nationwide would kill jobs and stifle economic growth. There's no reason for the Senate to pass this flawed bill -- skipping the committee process and rushing the bill forward to stifle debate."

"In Montana, our budget has a surplus because we've handled our money wisely," said Sen. Tester in a release. "We don't have a sales tax and have twice voted against having one. This bill would impose new tax burdens on small businesses and create more bureaucracy and more accountants. It's bad policy that will fundamentally alter the rights of states."

Sen. Sheehan stated that "this is a bill that fundamentally violates states' sovereignty". See, video. She wants an amendment that would allow states to opt out.

Many tech groups oppose this bill. See for example, TechAmerica release, Information Technology Industry Council release, NetChoice video, and TechNet release.

See also, National Taxpayers Union (NTU) release, and Competitive Enterprise Institute (CEI) article titled "The Internet Sales Tax Reveals Its Foolish Head Yet Again".

EC Seeks Public Comment on Google's Proposed Antitrust Commitments

4/25. The European Commission (EC) published a set of commitments [61 pages in PDF] proposed by Google to avoid EC action under its antitrust laws, and the EC's request for public comments on those proposed commitments.

The deadline to submit comments is "one month from publication in the Official Journal of the European Union".

The EC's request states that "The Commission's preliminary view is that Google is dominant in the European Economic Area (EEA) both in web search and search advertising. For instance, Google has been holding market shares in web search well above 90% in most European countries for several years now, a level which is higher than in many other parts of the world. There are also significant barriers to entry and network effects in both markets."

It also states that "The Commission has also reached the preliminary conclusion that in four areas Google may be abusing its dominant position in the EEA ... Such abuses would be in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU)."

The EC listed four competition concerns. "The first competition concern relates to the way Google displays links to its own specialised search services in its web search results."

"The second competition concern relates to the way Google uses without consent content from competing specialised search services in its own offerings.

"The third competition concern relates to exclusivity requirements in Google's agreements with publishers (i.e. any third party web site such as newspapers) with regard to Google online search advertisements displayed on those publishers' web sites. The Commission is concerned that these requirements oblige publishers to obtain all or most of their online search advertisements from Google."

"The fourth competition concern relates to Google contractually restricting the possibility to transfer online search advertising campaigns away from Google's AdWords and to simultaneously manage such campaigns on competing online search advertising platforms."

The EC's request adds that the EC is also "thoroughly examining all other allegations brought to its attention by different market players with a view to deciding whether or not a further investigation of those issues is warranted. Google's Android related business practices are part of those issues."

The U.S. Federal Trade Commission (FTC) has already examined Google, and declined to take significant antitrust action. See, story titled "FTC Concludes Its Investigation of Google" in TLJ Daily E-Mail Alert No. 2,504, January 7, 2013.

The EC stated that "The factual and legal environments are different in the US and Europe. In particular, Bing and Yahoo represent a substantial alternative to Google in web search in the USA", but not in Europe.

Fair Search (FS) stated in a release that "Google's proposed commitments appear to fall short of ending the preferential treatment at the heart of the Commission’s case based on formal complaints from 17 companies. Google’s own screen shots in its proposal (see p. 30) shows it seeks approval to continue preferential treatment for its own products." (Parentheses in original.)

FS is a group that represents Expedia, Microsoft, Nokia, Oracle, TripAdvisor and other mostly U.S. companies in seeking to induce antitrust regulators around the world to regulate Google's business practices.

See also, story titled "Fair Search Files Complaint with EC About Google Mobile Practices" in TLJ Daily E-Mail Alert No. 2,548, April 9, 2013.

Obama Picks Shelanski for OMB Post

4/25.  President Obama nominated Howard Shelanski to be Administrator of the Office of Information and Regulatory Affairs, in the Executive Office of the President's (EOP) Office of Management and Budget (OMB). See, White House news office release and release.

His area of expertise is antitrust law and economics. Moreover, he has also focused on application of antitrust to intellectual property, information technology and communications.

He received both a Ph.D. in economics and J.D. from UC Berkeley. He clerked for Judge Stephen Williams of the U.S. Court of Appeals (DCCir) and Justice Antonin Scalia of the Supreme Court. He then worked for the law firm of Kellogg Huber. He also briefly was Chief Economist at the Federal Communications Commission (FCC).

He then worked at UC Berkeley, from 1999 through 2009. He transferred to Georgetown University law school in 2011. However, for the past four years he has mostly worked at the Federal Trade Commission (FTC), first as Deputy Director for Antitrust in the Bureau of Economics (BE), and now as Director of the FTC's BE.

See also, Shelanski's Georgetown biography page.

More News

4/25. The Department of Homeland Security (DHS) published a notice in the Federal Register (FR) that contains a Request for Expressions of Interest (REI) regarding providing accreditation services for laboratories participating in the Project 25 (P25) Compliance Assessment Program (P25 CAP), which pertains to enabling interoperability among digital two way land mobile radio communications products for public safety. The deadline for laboratory accreditation bodies to submit responses is Tuesday, May 28, 2013. See, FR, Vol. 78, No. 80, April 25, 2013, at Pages 24428-24429.

People and Appointments

4/24. The Senate confirmed Jane Kelly to be a Judge of the U.S. Court of Appeals (8thCir) by a vote of 96-0. See, Roll Call No. 108.

4/24. The Senate confirmed Sylvia Burwell to be Director of the Office of Management and Budget by a vote of 96-0. See, Roll Call No. 109 and statement by President Obama.

4/24. Gary Shapiro, head of the Consumer Electronics Association (CEA), sent a letter to President Obama regarding selection of the next Chairman of the Federal Communications Commission (FCC), to replace Julius Genachowski. Responding to a letter "from groups purporting to represent the ``public interest´´", he wrote that "having real world business experience is a plus for a policy job affecting businesses". He also urged the selection of someone who holds the "view that freeing up spectrum is important for future innovation and for the millions of tablets, smartphones and other connected devices to come to work as consumers expect".

More News

4/24. The Federal Communications Commission (FCC) published a notice in the Federal Register (FR) that sets comment deadlines for its Notice of Proposed Rulemaking (NPRM) [47 pages in PDF] regarding implementation of the 2012 spectrum act's provisions regarding deployment of a nationwide public safety broadband network in the 700 MHz band under a nationwide license issued to the FirstNet. The deadline to submit initial comments is May 24, 2013. The deadline to submit reply comments is June 10, 2013. The FCC adopted this NPRM on March 7, 2013, and released the text on March 8. It is FCC 13-31 in PS Docket Nos. 12-94 and 06-229, and WT Docket No. 06-150. See, FR, Vol. 78, No. 79, April 24, 2013, at Pages 24138-24147. See also, HR 3630 [LOC | WW], the "Middle Class Tax Relief and Job Creation Act of 2012", Public Law No. 112-96.

Rep. Matsui Introduces Bill to Expand Lifeline Program to Include Broadband Service Subsidies

4/23. Rep. Doris Matsui (D-CA) and other House Democrats introduced HR 1685 [LOC | WW] the "Broadband Adoption Act of 2013", a bill to expand the Federal Communications Commission's (FCC) Lifeline program to also subsidize broadband internet access service (BIAS).

Rep. Doris MatsuiRep. Matsui (at right) stated in a release that "The Internet is increasingly the economic engine for growth and innovation. The Lifeline program provides a tangible service to lower-income Americans and it is imperative that the Lifeline program be reformed and modernized to account for broadband services. We must ensure lower-income Americans have a greater opportunity to participate in the digital economy, whether it be for workforce training, education, finding a job or creating the next big idea."

The original cosponsors of the bill are Rep. Henry Waxman (D-CA), Rep. Anna Eshoo (D-CA), Rep. Dianne Degette (D-CO), Rep. Zoe Lofgren (D-CA), Rep. Mike Doyle (D-PA), Rep. Ben Ray Lujan (D-NM), Rep. Jan Schakowsky (D-IL), and Rep. G.K. Butterfield (D-NC).

This bill was referred to the House Commerce Committee (HCC).

Christopher Lewis of the Public Knowledge (PK) praised this bill in a release.

Legislative History. This bill is based upon, but not identical to, bills introduced by Rep. Matsui in the 111th and 112th Congresses.

Rep. Matsui introduced HR 3646 [LOC | WW], the "Broadband Affordability Act of 2009", in the 111th Congress on September 24, 2009. See also, story titled "Rep. Matsui Introduces Bill to Expand FCC Lifeline Universal Service Subsidies to Cover Broadband" in TLJ Daily E-Mail Alert No. 1,993, September 30, 2009.

She introduced HR 2163 [LOC | WW], the "Broadband Affordability Act of 2011", in the 112th Congress on June 14, 2011.

Neither of these bills was reported by any committee or subcommittee. Both were cosponsored by Democrats only.

Summary and Explanation of Bill. The Lifeline program is described by the FCC as a universal service program that subsidizes service for poor people.

The 104th Congress codified FCC universal service tax and subsidy programs for the first time in the Telecommunications Act of 1996. See, 47 U.S.C. § 254. Under this statute, universal service subsidies are limited to "telecommunications services", and only the customers of a "telecommunications carrier that provides interstate telecommunications services" are taxed to support universal service programs.

The FCC has not classified broadband internet access service (BIAS) as "telecommunications". Nevertheless, the FCC has exceeded its statutory authority (but not without support from key members of Congress) by providing universal service subsidies for BIAS, including in its Lifeline program, through something the FCC titles the "Low-Income Broadband Pilot Program".

The FCC created this pilot program last year as just one element of its huge Report and Order and Further Notice of Proposed Rulemaking (FNPRM) [299 pages in PDF] that pertains to both its Lifeline and Link Up universal service tax and subsidy programs. The FCC adopted that item on January 31, 2012 and released the text on February 6, 2012. It is FCC 12-11 in WC Docket Nos. 11-42, 03-109, and 12-23, and CC Docket No. 96-45.

See also, the FCC's Order [30 pages in PDF] selecting 14 projects to participate in this pilot program. The FCC's Wireline Competition Bureau (WCB) adopted and released that order on December 19, 2012. It is DA 12-2045 in WC Docket No. 11-42.

The statute currently refers to the Lifeline program in subsection 254(j). This subsection merely states that "Nothing in this section shall affect the collection, distribution, or administration of the Lifeline Assistance Program provided for by the Commission under regulations set forth in section 69.117 of title 47, Code of Federal Regulations, and other related sections of such title."

Rep. Matsui's bill would rewrite this subsection. It would add to the existing FCC Lifeline program a "Broadband Lifeline Assistance Program".

It would require the FCC to write rules within 270 days "establishing Lifeline program support for broadband that enables qualifying low-income customers residing in urban and rural areas to purchase broadband service at reduced charges by reimbursing providers who elect to participate in the program for each such customer served."

The bill adds that the FCC "shall consider the results" of its current pilot program.

The bill also states that "Such program shall be similar in structure to the Lifeline program for basic telephone service under subpart E of part 54 of title 47, Code of Federal Regulations. Qualifying individuals may elect to apply support from the Lifeline program to basic telephone service, voice telephony service, or broadband service, whether each service is purchased stand-alone or in a bundle."

The bill does not specify the subsidy to be provided to qualifying customers. It merely states that the FCC "shall routinely study the prevailing market price for broadband service".

The bill requires technology neutrality for both existing and broadband Lifeline subsidies.

This bill also provides that a BIAS provider need not be an eligible telecommunications carrier (ETC) to qualify for broadband Lifeline subsidies.

See, the FCC's Report and Order [68 pages in PDF], also known at the "Eligible Telecommunications Carrier Order" or "ETC Order", adopted on February 25, 2005, and released on March 17, 2005. It is FCC 05-46 in CC Docket No. 96-45.

Specifically, the bill states that "A participating broadband service provider need not be an eligible telecommunications carrier to receive support under such program, but such provider shall obtain authorization from the Commission in order to participate in the program."

Bloat, Waste, Fraud and Abuse. This is a bill drafted with the purpose of creating a huge subsidy program, without consideration of either the costs, the likely size of the program, or the waste, fraud and abuse that it would invite.

This bill does not establish any limit on either the subsidy per customer, or the total size of the program.

This bill does not define "low income". That would be left to the FCC.

The bill is almost devoid of provisions related to limiting waste, fraud or abuse of the program. It contains no requirements that applicants for subsidized service prove that they are "low income".

It contains little that pertains to double dipping and resale by recipients of subsidized service. It only states that the FCC "shall consider any appropriate measures to prevent any waste, fraud, or abuse of this program" and that the FCC shall create a "national database" of consumers eligible for subsidized service.

FCC Support. FCC Chairman Julius Genachowski stated in a release that "I commend Congresswoman Matsui for her continued leadership on ensuring that low-income Americans have access to broadband by addressing one of the key barriers to adoption -- cost. As with our other USF reforms, transitioning Lifeline support to 21st century communications is vital: today, broadband is essential for finding jobs, allowing children to do their homework, communicating in times of emergency, and accessing vital health information."

He continued that "In overhauling the Lifeline program last year and setting the program on a path to save over $2 billion by the end of next year, our bipartisan, unanimous reforms also made greater broadband adoption an express goal for Lifeline and established a pilot program to look at alternative models for supporting it. Our work will complement the legislation introduced today, ensuring that low income Americans are connected while protecting this critical program from waste, fraud, or abuse."

FCC Commissioner Mignon Clyburn stated in a release that "this legislation is welcome guidance".

Representatives and Senators Introduce Bills to Limit Duration of Automotive Design Patents

4/23. Rep. Darrell Issa (R-CA) and Rep. Zoe Lofgren (D-CA) introduced HR 1663 [LOC | WW | PDF], the "Promoting Automotive Repair, Trade, and Sales Act of 2013" or "PARTS Act" in the House on April 23, 2013. This bill would amend the Patent Act to provide an exemption from infringement of design patents for certain component parts of motor vehicles -- primarily collision repair parts.

On the same day, Sen. Sheldon Whitehouse (D-RI) and Sen. Orrin Hatch (R-UT) introduced the companion bill in the Senate, S 780 [LOC | WW].

Rep. Issa and Rep. Lofgren introduced a similar bill in the 112th Congress, HR 3889 [LOC | WW], on February 2, 2012. The House Judiciary Committee's (HJC) Subcommittee on Intellectual Property, Competition and the Internet held a hearing on that bill on August 1, 2012. See, hearing record [85 pages in PDF], Serial Number 112-144. However, no further action was taken on that bill in the 112th Congress.

The just introduced bills are very similar, but not identical, to HR 3889.

These bills would not affect utility patents, which provide exclusive rights in new and useful inventions. These bills would affect automotive design patents, and particularly those in parts frequently damaged in collisions, such as panels, fenders, grills, bumpers, lights, and mirrors.

These bills would not affect design patents in other industry sectors. However, the argument exists that if the Congress were to enact this bill, then the Congress would be inundated with demands to create exemptions for other industries. Yet, it is particularly the nature of automobiles, but not most other consumer products, to collide with things in ways that cause lots of damage, and the need for replacement of damaged parts. Refrigerators, for example, are rarely sideswiped or rear ended.

The Consumer Federation of America, Consumers Union and automobile insurance companies support this proposal. Automobile companies oppose this proposal.

Rep. Darrell IssaRep. Issa (at right) issued a release that explains that "The PARTS Act amends U.S. design patent law to reduce the exclusivity period car companies hold on design patents for collision repair parts from 14 years to 30 months (or two-and-a-half years) during which time other suppliers could test, research and develop parts on a not-for-sale basis. The current 14-year design patent monopoly prevents aftermarket manufacturers from making or selling external collision repair parts, driving up costs by limiting consumer choice, crowding out competition leading to higher insurance rates and fees." (Parentheses in original.)

Sen. Whitehouse stated in the same release that "Having to replace a car part is frustrating enough; drivers shouldn’t have to pay artificially high prices set by car manufacturers ... This bill will preserve competition in the car-parts market and ultimately allow consumers to get safe replacement parts at lower prices."

These bills would amend 35 U.S.C. § 271, which provides a private right of action for patent infringement, and lists activities that constitute infringement. That is, this section provides that "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent".

The just introduced bills would add a new subsection (j) that contains an exemption. It provides in part that

These bills would have retroactive application.

Rep. Poe Addresses IRS Warrantless E-Mail Searches

4/23. Rep. Ted Poe (R-TX) spoke in the House condemning the fact that the Internal Revenue Service (IRS) can access cloud stored e-mail without a warrant. He argued that the ECPA should be amended to require that the government obtain a court warrant based upon probable cause to access cloud stored e-mail.

Rep. Ted PoeRep. Poe (at right) said that "Let's say the IRS decides to snoop around and secretly investigate a citizen named Joe and his taxes. Right now, the government can go to Joe's email provider, demand his email records, and check on his finances that are stored in the cloud, all without Joe's knowledge or consent." See, Congressional Record, April 23, 2013, at pages H2165-6.

"Government agencies have the authority to snoop around through private emails and photos as long as they are 180 days old, no warrant required. How is this possible? Well, it's called the outdated Electronic Communications Privacy Act, ECPA. ECPA was passed back in 1986, the stone age of technology, when most Americans didn't even own a home computer, much less use email or store things in a cloud."

"In other words", Rep. Poe continued, "Big Government can force a private company to turn over private information of a citizen, without their consent, without a warrant, and without that person's knowledge. This circumvents the Fourth Amendment's prohibition against unreasonable searches and seizures of Americans' ``persons, houses, papers, and personal effects.´´"

He argued that the "Government should get a warrant if it has probable cause to believe a crime is being committed. Technology may have changed, but the Fourth Amendment still applies to the Internet."

The House Judiciary Committee's (HJC) Subcommittee on Crime, Terrorism, Homeland Security and Investigations will hold a hearing titled "The Electronic Communications Privacy Act (ECPA), Part 2: Geolocation Privacy and Surveillance" at 10:00 AM on Thursday, April 25. This hearing will not focus on the issue raised by Rep. Poe.

Also on April 25, at 9:30 AM, the Senate Judiciary Committee (SJC) will hold an executive business meeting for which the agenda includes consideration of S 607 [LOC | WW], the "Electronic Communications Privacy Act Amendments Act of 2013".

S 607 would address the issue raised by Rep. Poe. It would require the IRS, and any other government agency, to obtain a warrant to access cloud stored e-mail.

See also, 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, and story titled "Sen. Leahy and Sen. Lee Introduce Bill to Require Warrant to Access Cloud Stored E-Mail" in TLJ Daily E-Mail Alert No. 2,538, March 21, 2013.

Obama Announces His Support for Internet Tax Collection Bill

4/23. The Executive Office of the President's (EOP) Office of Management and Budget (OMB) stated in a release that "The Administration strongly supports" S 743 [LOC | WW], a bill that would empower states to compel out of state retailers to collect sales taxes on internet and other remote sales.

This release states that "The Administration strongly supports provisions in S. 743 that would directly address those concerns by granting only those States and localities that have simplified their sales tax systems the option to require all retailers, including those located out-of-state, to collect sales and use taxes already owed under law."

It adds that this bill would increase state and local tax revenues, and end an unfair advantage enjoyed by online retailers.

Sen. Baucus Will Not Seek Re-Election in 2014

4/23. Sen. Max Baucus (D-MT), the Chairman of the Senate Finance Committee (SFC), announced in a release that he will not seek re-election in 2014. He is a red state Democrat who is often at odds with President Obama. He has also long been supportive of information technology on numerous issues.

Sen. Max BaucusSen. Baucus (at right) is a Democrat who has long represented a state easily won by Republicans in most other Presidential, Senate and House elections by distancing himself from the policies and leaders of his party.

Sen. Baucus's separation from President Obama and the Senate Democratic leadership also manifests itself in numerous technology related issues.

For example, he twice voted, along with Sen. Jon Tester (D-MT), in the 112th Congress against the bill backed by President Obama and Sen. Harry Reid (D-NV) that would have given the President authority to regulate business's cyber security related practices.

Sen. Baucus's long time support for free trade policies has also placed him at odds with President Obama. Many farm and ranch state Senators of both parties are free traders in part because their states export much of what they produce.

Sen. Baucus has also long supported, and often sponsored, legislation to make the research and development tax credit permanent.

Sen. Baucus is also a vocal opponent of S 743 [LOC | WW], the Senate bill that would empower states to collect taxes from out of state online retailers. Sen. Reid is now attempting to push this bill through the Senate by bypassing the SFC.

Sen. Jay Rockefeller (D-WV) is next in Democratic seniority on the SFC. However, he has announced that he will not run for re-election in 2014. Behind him had been former Sen. John Kerry (D-MA), who left the Senate to become Secretary of State.

Next in Democratic seniority is Sen. Ron Wyden (D-OR). Sen. Wyden has long been a leading opponent of internet taxes, first in the House, and then in the Senate. Next in seniority is Sen. Charles Schumer (D-NY).

People and Appointments

4/23. Maryam Cope and Miguel Martínez will join the Information Technology Industry Council (ITIC). Cope previously worked for former Sen. Kay Hutchison (R-TX) and the Senate Commerce Committee (SCC). Martinez previously worked for Rep. John Lewis (D-GA), a member of the House Ways and Means Committee (HWMC). See, ITIC release.

More News

4/23. The Federal Communications Commission (FCC) published a notice in the Federal Register (FR) that sets deadlines to submit comments in response to its Public Notice (PN) [17 pages in PDF] regarding its e-rate tax and subsidy program for schools and libraries. The FCC released this PN on April 9, 2013. It is DA 13-592 in CC Docket No. 02-6 and GN Docket No. 09-51. The deadline to submit initial comments is May 23, 2013. The deadline to submit reply comments is June 7, 2013. See, FR, Vol. 78, No. 78, April 23, 2013, at Pages 23877-23882.

Senate Invokes Cloture on Internet Sales Tax Bill

4/22. The Senate approved a motion to invoke cloture on S 743 [LOC | WW], a bill that would empower states to compel out of state retailers to collect sales taxes on internet and other remote sales, by a vote of 74-20. See, Roll Call No. 107. A super majority of 60 is required to pass a cloture motion.

Seventeen Republicans and three Democrats -- Sen. Jon Tester (D-MT), Sen. Max Baucus (D-MT), and Sen. Ron Wyden (D-OR) -- voted no. Also, Sen. Jeff Merkley (D-OR) did not vote.

The states of Montana, Oregon, New Hampshire and Delaware do not impose sales or use taxes.

This bill is, in part, a reaction to the Supreme Court's 1992 ruling in Quill v. North Dakota, 504 U.S. 298. The Supreme Court held that state and local taxing authorities are barred under the Commerce Clause from requiring remote sellers without a substantial nexus to the taxing jurisdiction to collect sales taxes for sales to persons within the jurisdiction.

However, the Supreme Court added that Congress may extend such authority. It wrote that "Congress is now free to decide whether, when, and to what extent the States may burden interstate mail order concerns with a duty to collect use taxes." (At 504 U.S. 318.)

The Consumer Electronics Association (CEA) praised the Senate cloture vote, and urged passage, in a release. The National Retail Federation (NRF) also supports this bill.

Bill Summary. S 743 is nondescriptively titled the "Marketplace Fairness Act".

The bill would authorize any state "to require all sellers", regardless of location, "to collect and remit sales and use taxes with respect to remote sales sourced to that" state. Thus, it would apply not only to internet sales, but also mail order catalogue sales, and other remote sales.

The bill provides an exemption "if the remote seller has gross annual receipts in total remote sales in the United States in the preceding calendar year" of less the $1 Million. Most individuals who sell stuff on eBay would not have to collect sales taxes.

The bill also authorizes states to require remote sellers to "file sales and use tax returns", and then conduct "audits for remote sales sourced to the State". The term "sourced" is then defined to mean the "location where the item sold is received by the purchaser, based on the location indicated by instructions for delivery that the purchaser furnishes to the seller", which is typically the buyer's home address. If this is not known by the seller, then the term "sourced" means the "customer's address" as "obtained by the seller during the consummation of the transaction" -- that is, from credit card billing address records.

There are around 30,000 state and local jurisdictions with authority to impose sales and use taxes. Depending upon which group's data one accepts, there are around 7,500 to 9,600 jurisdictions that impose some kind of sales or use tax.

The bill relies upon a presumption of suspect validity that retailers will be ably to comply with the laws of thousands of jurisdictions because states will provide "software free of charge for remote sellers that calculates sales and use taxes".

The bill is devoid of provisions that would limit complexity or arbitrariness. It does not require the thousands of taxing jurisdictions to develop uniform definitions for taxed and exempted items. It does not establish standard requirements for electronic filing. It does not establish a single audit system. It does not contain any procedural rights for remote sellers.

There is, of course, the state pact titled the "Streamlined Sales and Use Tax Agreement". However, this bill would authorize states to collect taxes on remote sellers without signing that pact.

This bill would enable state and local jurisdictions to shift from what was once primarily a retailer location based tax system, to a tax system that is also based upon buyer locations. The former is simple, and anonymous. The latter is complex, burdensome, non-anonymous and privacy invasive.

Under a location based system retailers only need to know the laws of the jurisdictions in which they are located. Also, the identities and addresses of buyers are irrelevant. If someone comes into a store and buys a covered item, the relevant tax is collected, regardless of who the buyer is, or where he or she lives.

Under a buyer location system, for all remote sales, the buyer's location is determinative of the tax. The seller must know the address of every buyer, in which taxing jurisdiction they reside, and what are the tax laws of those jurisdictions. This is complex and burdensome.

The seller must collect and retain databases of information on all remote sales that includes the home addresses of remote buyers for mailed items, and in the case of streamed or other digital products, credit cards billing addresses. These databases would be discoverable in audits. The bill contains no data minimization requirements. This is privacy invasive.

Jim Harper of the Cato Institute wrote in a February 15 piece titled "More Internet Sales Taxes -- and Your Privacy Compromised" that "it's important not to forget the consequences for privacy if Congress were to approve interstate tax collection like this. Dig down into the bill and you start to see what it takes for states and localities to tax products sent into their states by remote sellers."

Harper wrote that "state tax authorities would get troves of data about online purchases delivered into their state. The standard misuses apply. It might be transferred to other organs of government, legally or not, for investigation and examination. Curious state bureaucrats might look up the purchasing habits of ex-spouses, famous names, and political figures. The list goes on and on."

Senate Proponents. Proponents of the bill primarily advanced two main arguments. First, states need more tax revenues. Second, the status quo is unfair to brick and mortar retailers.

Sen. Richard DurbinSen. Richard Durbin (D-IL) (at right), a sponsor of the bill, stated that "My State is struggling with terrible budget problems. We are in the red with deficits, our pension system is in trouble, and money that should be collected for sales tax is not being collected. So what we are doing with this bill is allowing States to have Internet retailers selling in those States to collect the sales tax."

Sen. Mike Enzi (R-WY), the lead sponsor of the bill, stated that "I believe it is important to level that playing field for all retailers -- the in-store, the catalogue, and the online -- so an outdated rule for sales tax collection doesn't adversely impact particularly small businesses and Main Street retailers."

Sen. Enzi predicted that if enacted, this bill "would provide approximately $23 billion in fiscal relief for States". However, Sen. John Rockefeller (D-WV) said that "California loses about $4 trillion-plus because of this".

Sen. Lamar Alexander (R-TN) said that this bill is about "states rights".

Senate Opponents. Sen. Wyden stated that "the Senate is on course to consider profoundly misguided legislation. This proposal is known as the Marketplace Fairness Act, but it is anything but fair. The Marketplace Fairness Act is unprecedented in its reach to discriminate against the Internet, employers, and States with modest or no sales taxes."

Sen. Ron WydenSen. Wyden (at right) continued that "Big retailers, effectively seeking a legislative bailout, have allied themselves with State governments that see the Marketplace Fairness Act as an opportunity to obtain new tax revenue without enduring the political consequence of enforcing their own tax laws in their own jurisdictions. It is always easier to put the burden of collecting taxes on the people who can't vote for you".

"The Marketplace Fairness Act is going to hobble the Internet economy and constrain online commerce. It is, in my view, a recipe for economic stagnation. It would rein in the Internet economy which has helped lead our economy out of the recession that began in 2008." He continued that "This proposal, in effect, unleashes all the Nation's tax collectors on small Internet businesses -- Internet entrepreneurs who have neither the ability to enforce the terms of the Marketplace Fairness Act nor the political influence in this city to be able to shape the legislation. The Marketplace Fairness Act takes the Internet down a dangerous path because its passage would endorse the notion that Internet entities should be required to enforce laws outside their home jurisdiction."

Sen. Baucus said that "This bill forces small businesses across the country to spend time and resources they should be using to create jobs, jumping through new bureaucratic hoops. In Montana it forces our small businesses to play tax collector for other States, with absolutely no benefit to them."

He said that this bill "forces small businesses to hire expensive lawyers and accountants to deal with the burdensome paperwork and added complexity of tax rules and filings across multiple States."

The bill, as written, has no audit or enforcement protection. As a result, it opens small businesses to aggressive out-of-State tax collectors. States will be taxing businesses beyond their borders. This bill helps States target those businesses that are truly operating out of State and subjects them to the same broken, confusing State sales tax systems that are currently in place.

Sen. Kelly Ayotte (R-NH) said that this bill "should be renamed the Internet Tax Collection Act because it is going to make online businesses the tax collectors for the Nation".

Several Senators, and especially members of the Senate Finance Committee (SFC), complained that the bill should first be marked up by the SFC. For example, Sen. Orrin Hatch (R-UT), the ranking Republican on the SFC, said that the committee system exists "to make sure the legislation we pass is technically sound".

House of Representatives. This bill has not yet passed the House.

The House Judiciary Committee (HJC) has jurisdiction. Unlike Sen. Reid, Rep. John Boehner (R-OH), the Speaker of the House, does not make a practice of circumventing the committee process for major legislation.

Rep. Bob Goodlatte (R-VA), the Chairman of the HJC, has a history of sponsoring bills to limit aggressive state tax collection efforts directed at out of state businesses.

See also story titled "House Judiciary Committee Holds Hearing on Internet Sales Tax Bill" in TLJ Daily E-Mail Alert No. 2,410, July 24, 2012.

Steve Del Bianco, head of Net Choice, stated in a release that this bill "is a like a bad impressionist painting -- it's appealing at first glance, but the longer you stare the worse it looks. The Senate got around that problem today by making sure nobody had a chance to look too closely at this legislation. Thankfully for businesses and consumers, the House of Representatives won't be so accommodating."

Sen. Begich Seeks GAO Study of FCC Universal Service Reforms

4/22. Sen. Mark Begich (D-AK) and Sen. Deb Fischer (R-NE) introduced S 774 [LOC | WW], a bill that would require the Government Accountability Office (GAO) to submit a report to the Congress on the effectiveness of the Federal Communications Commission’s Universal Service Fund (USF) reforms.

In 2011, the FCC adopted a huge order that, among other things, expanded the scope of its high cost universal service tax and subsidy program to include broadband internet access service. See, Report and Order and Further Notice of Proposed Rulemaking [752 pages in PDF], adopted on October 27, 2011, and released on November 17, 2011. It is FCC 11-161 in WC Docket No. 10-90, GN Docket No. 09-51, WC Docket No. 07-135, WC Docket No. 05-337, CC Docket No. 01-92, CC Docket No. 96-45, WC Docket No. 03-109, and WT Docket No. 10-208.

Sen. Begich stated in a release that "I have heard for months on end about the uncertainty and unpredictably facing the telecom providers in my state of Alaska as a result of the FCC's Universal Service Fund reform order ... The challenges and uncertainty facing Alaska companies are extreme examples of the challenges faced by all providers committed to serving rural areas throughout the nation. Rural telecom expansion and deployment is far too important to go unchecked, which is why more data will help us get a better understanding of how these new rules affect our communities."

People and Appointments

4/22. The Securities and Exchange Commission (SEC) announced in a release that George Canellos and Andrew Ceresney "have been named Co-Directors" of the SEC's Division of Enforcement. Mary Jo White, who was confirmed as Chairman of the SEC on April 8, 2013, previously worked at the law firm of Debevoise & Plimpton. Ceresny worked in the same office. Sen. Charles Grassley (R-IA) stated in a release that "With the head of the SEC and one of the co-directors of enforcement coming from the same firm, both might be recused from many cases involving that firm's clients. The SEC will have to ensure that cases don't fall by the wayside because of potential conflicts of interest and recusals. The commission can't give any impression of favoritism toward former clients of the chairman and co-director of enforcement’s former law firm."

4/22. The Pharmaceutical Research and Manufacturers of America (PhRMA) announced in a release the election of Michael Narachi (P/CEO of Orexigen Therapeutics) to its Board of Directors. John Castellani remains the P/CEO of the PhRMA.

More News

4/22. The Federal Communications Commission's (FCC) Wireline Competition Bureau (WCB) adopted and released a Report and Order (R&O) [29 pages in PDF] that adopts a Connect America Phase II cost model platform. This R&O is DA 13-807 in WC Docket No. 10-90 and WC Docket No. 05-337.

Go to News from April 16-20, 2013.