1/13. President elect Obama has not yet nominated anyone for the position of Commissioner of the Federal Communications Commission (FCC). Nor has he designated its Chairman. Obama is not yet President. Nor has his transition office announced his selection for Chairman of the FCC. However, the Wall Street Journal reported in its January 13, 2009, issue that Obama will pick Julius Genachowski.

Genachowski was a financial contributor and fund raiser for Obama. He also gave to other Democratic candidates and the Democratic Senatorial Campaign Committee. See, CQ MoneyLine.

Like Obama, Genachowski went to college at Columbia, and law school at Harvard.

Genachowski clerked for former Judge Abner Mikva of the U.S. Court of Appeals (DCCir). At the time of his appointment to the Court of Appeals by former President Carter, Mikva represented a north side of Chicago Congressional district (the former 11th) that overlaps to the district (the current 5th) that former Rep. Rod Blagojevich (D-IL) and Rep. Rahm Emanuel (D-IL) have represented. Obama has picked Emanuel to be his Chief of Staff.

Genachowski also clerked for former Justice William Brennan, and Justice David Souter, of the Supreme Court.

He then went to work at the FCC in 1994 as "Special Counsel" to former General Counsel William Kennard. He was then "Counsel" and later "Chief Counsel" to former FCC Chairman Reed Hundt. Genachowski left the FCC in 1997. See, FCC release of December 10, 1996, and FCC release of May 8, 1997.

Genachowski is also a former staff assistant to Sen. Charles Schumer (D-NY).

After leaving the FCC, he worked for eight years for IAC/InterActiveCorp. He then co-founded Rock Creek Ventures (RCV), a Washington DC based venture capital company. LaunchBox Digital and Thummit are RCV companies. See, his RCV biography.

Reaction. Ken Ferree, head of the Progress & Freedom Foundation (PFF), stated in a release that "Julius Genachowski is an outstanding choice to chair the Commission. He is knowledgeable, experienced, and presumably will have the ear of the most influential people within the Administration. PFF looks forward to working with Mr. Genachowski and the agency under his leadership."

Ed Black, head of the Computer & Communications Industry Association (CCIA), praised Genachowski in a release. He stated that "Genachowski’s role as a trusted confidant and personal friend to the president-elect portends favorably for the high-tech and communications industries and consumers".

Black added that "Having a strong commitment to the principles of Internet openness is critical to the many issues often debated separately in Washington. Genachowski has shown this commitment while serving as an advisor to Obama."

Josh Silver of the Free Press stated in a release that "The challenges facing the next FCC are enormous -- a vast digital divide, an open Internet in jeopardy, consolidated media ownership, newsrooms in economic freefall and entrenched industries invested in maintaining the status quo. This moment calls for bold and immediate steps to spur competition, foster innovation and breathe new life into our communications sector. With his unique blend of business and governmental experience, Genachowski promises to provide the strong leadership we need."

Gigi Sohn, head of the Public Knowledge, praised Genachowski in a release. She stated that "it is clear that he understands the importance of open networks".

1/13. Yahoo named Carol Bartz to be its CEO. She was previously a long time CEO of Autodesk. She will replace Jerry Yang, who maintains other roles at Yahoo. See, Yahoo release.

Yahoo also announced that its President, Sue Decker, will resign.

Bartz will also join the Board of Directors of Yahoo. She is also a director of Intel, Cisco Systems, and NetApp.

Last year, under Jerry Yang's leadership, Yahoo rejected Microsoft's attempts to acquire Yahoo. Yahoo stock now trades at about $12 per share.

Microsoft made an unsolicited bid on February 1, 2008 to acquire Yahoo for $31 per share. See, stories titled "Microsoft Makes Offer to Acquire Yahoo" and "Google Opposes Microsoft Bid for Yahoo" in TLJ Daily E-Mail Alert No. 1,710, February 4, 2008.

1/13. The Federal Trade Commission (FTC) published a 34 page notice in the Federal Register that announces, describes, recites, and sets the effective date for, its new rules governing FTC adjudicatory proceedings. It also sets a comment deadline for these "Interim final" rules.

Interim final?

Summary. The FTC's new emphasis on adjudicative proceedings in antitrust merger reviews, and these new rules, will make it harder for targeted companies to challenge FTC attempts to block mergers. This will also likely embolden FTC regulators to act more aggressively in merger reviews. And, this will impact the tech sector.

Telecom company mergers are generally understood to fall within the jurisdiction of the Department of Justice's (DOJ) Antitrust Division. Although, with new technologies and convergence, the lines are becoming less clear.

Those who favor more aggressive antitrust enforcement in the tech sector have reason to support these rules. Those who fear a more aggressive, less challengeable FTC, have reason to oppose these rules.

The effective date of these rules is January 13, 2009. The deadline for comments is February 12, 2009.

See also, FTC's December 23, 2008, release summarizing these rules changes.

Analysis. These rules apply to all adjudicative proceedings before the FTC. However, the most affected proceedings, and those that are the likely motive of the FTC for writing new rules, are merger blocks.

The FTC's notice does not mention either Larry Ellison (founder and CEO of Oracle) or John Mackey (founder and CEO of Whole Foods). Nor does the notice state that their recent actions are among the reasons for adopting these new rules.

Few companies involved in large mergers, or related transactions, challenge in full the antitrust determinations of the DOJ, FTC, or Federal Communications Commission (FCC). In recent years, both Ellison and Mackey have. Both won significant legal victories that frustrated the efforts of regulators to block the relevant mergers, and undermined the regulators' reputations for authority.

The DOJ, pursuant to its statutory authority, files a complaint in U.S. District Court to block a merger, as it did against Oracle in 2004. See, stories titled "Antitrust Division Sues Oracle to Enjoin Its Proposed Acquisition of PeopleSoft" in TLJ Daily E-Mail Alert No. 846, March 1, 2004, and "DOJ Loses Oracle Case" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

The FTC is still trying to undo the 2006 merger of Whole Foods and another grocery chain. See, story titled "Whole Foods Files Complaint Against FTC" in TLJ Daily E-Mail Alert No. 1,871, December 11, 2008.

The FTC has recently signaled that it intends to make greater use of its statutory authority to proceed by in house administrative proceedings. These proceedings provide the FTC the opportunity to act as both prosecutor and judge. These proceedings also deprive the targeted companies of both the time and process that they would be allowed in District Court proceedings.

A comparison of the FTC's old rules, new rules, and the Federal Rules of Civil Procedure (FRCP) reveals several things. The new rules shorten deadlines. The new rules also shorten the time from filing of the FTC's administrative complaint to final order of the FTC.

Antitrust merger reviews are among the most complicated factual and legal proceedings that exist. Yet, the target companies are allowed only 14 days to file an answer to the FTC's complaint. In contrast, in even the simplest of District Court proceedings, ordinary defendants are allowed 20 days to answer. Moreover, when the FTC or other agencies are sued, they are allowed 60 days to answer, regardless of how trivial the case. See, Rule 12, FRCP.

The FTC's notice does not state that the reason for shortening time, and limiting process, is to make it less likely that targeted companies will be able to mount an effective defense, and hence, will be less likely to challenge the determinations of FTC's antitrust regulators.

Nevertheless, a review of the rules suggests that antitrust counsel for companies considering mergers subject to review by the FTC will advise their clients that the new rules make it more futile to attempt to challenge the FTC, even with meritorious facts and arguments.

However, there is more to this notice. The FTC's just released notice is 34 pages long. Yet, there is a glaring omission. While the FTC can force targeted companies to hearing in five months, even if they object, there is nothing in these rules that requires the FTC to bring a case to hearing in five months. See, for example, new Rule 3.21(c)(1), at pages 1820-1. The FTC can sit on a complaint, and delay indefinitely, if it chooses. With no final order, the targeted companies cannot petition for review by the Court of Appeals.

This is significant because in most mergers, time is of the essence, not only for the merging companies, but also for their investors, customers, suppliers and others. Delay of approval can be as damaging as an outright denial. Faced with indefinite delay, some merging entities may abandon their merger plans, even though the merits of the dispute lie with them.

However, the FTC has not been a repeat abuser of its power to delay in merger reviews, as the FCC has been.

FTC v. DOJ. It should be noted that administrative adjudications, and these new rules, apply at the FTC, but not at the DOJ.

There is already some divergence of approaches to antitrust at the two agencies. See, for example, stories titled "Antitrust Division Releases Report on Single Firm Conduct", "Summary of Single Firm Conduct Report" and "Three FTC Commissioners Criticize Single Firm Conduct Report" in TLJ Daily E-Mail Alert No. 1,827, September 27, 2008.

The FTC's new focus, and new rules, increase the two agencies' divergence. Increasingly, the outcome of an antitrust merger review may depend on which agency conducts the review.

Also, while the Congress has given two agencies merger review authority, it has not codified their respective jurisdictions. The two agencies are in substantial, but far from complete, agreement on the jurisdictional divide. Tim Muris (former FTC Chairman) and Charles James (former head of the Antitrust Division) attempted to modify and formalize their respective jurisdictions in 2002.

James and Muris issued a Memorandum of Agreement in January 2002 concerning clearance procedures for merger reviews and other antitrust matters. The agreement defined, by industry, which transactions would be reviewed by which agency.

However, this agreement was dropped following opposition from, and threats of appropriations cuts by, former Sen. Ernest Hollings (D-SC). See, story titled "DOJ & FTC Abandon Merger Review Agreement Under Threat from Sen. Hollings" in TLJ Daily E-Mail Alert No. 436, May 22, 2002.

This issue contains the following items:
 • Julius Genachowski
 • Bartz Named CEO of Yahoo
 • FTC Writes Rules to Bolster Power of Antitrust Regulators

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's schedule for week of January 12, and schedule for January 14.

The Senate will meet at 9:30 AM. It will resume consideration of S 22 [LOC | WW], "Omnibus Public Land Management Act of 2009".

8:30 AM. The Center for Democracy and Technology's (CDT) Internet Caucus will host an event titled "State of the Net Conference". See, notice. Location: Hyatt Regency Capitol Hill.

9:00 AM - 5:00 PM. The Brookings Institute will host a conference titled "The Limits of Abstract Patents In an Intangible Economy". See, notice. Location: Brookings, 1775 Massachusetts Ave., NW.

10:00 - 11:00 AM. Chris Essid, Director of the Department of Homeland Security's (DHS) Office of Emergency Communications will give a speech on "latest news and developments on public safety communications and related initiatives". See, notice. Location: FCC, Commission Meeting Room, TW-C305.

11:00 AM. The House Ways and Means Committee will hold an organizational meeting. Location: Room 1100, Longworth Building.

1:30 - 6:00 PM. The DC Bar Association will host an event titled "Impact of the New Obama Administration on Laws Affecting Mergers and Acquisitions". The speakers will include William Kovacic (outgoing Chairman of the Federal Trade Commission), Brian Breheny (Securities and Exchange Commission), and Joshua Odintz (Senate Finance Committee staff). See, notice. Location: Grand Hyatt Washington, 1000 H St., NW.

2:00 PM. The House Commerce Committee (HCC) will hold an organizational meeting. This meeting will be web cast by the HCC. Location: Room 2123, Rayburn Building.

2:00 PM. The Senate Homeland Security and Government Affairs Committee will hold hearing on on the likely nominations of Peter Orszag to be Director of the Office of Management and Budget (OMB) and Robert Nabors to be Deputy Director of the OMB. See, notice. Location: Room 342, Dirksen Building.

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's schedule for week of January 12.

RESCHEDULED FROM JANUARY 8. 9:30 AM. The Senate Judiciary Committee (SJC) will hold a hearing on the likely nomination of Eric Holder to be Attorney General in the Obama administration. See, notice. The SJC will webcast this hearing. Location: Room 325, Russell Building.

9:30 AM. The Senate Foreign Relations Committee will hold a business meeting to consider the likely nomination of Hilary Clinton to be Secretary of State. See, notice. Location: Room 216, Hart Building.

10:00 AM. The Senate Banking Committee will hold a hearing on several likely nominees of President elect Obama: Mary Schapiro (CEO of the Financial Industry Regulatory Authority) to be Chairman of the Securities and Exchange Commission (SEC), Christina Romer (UC Berkeley) to be Chairman of the Council of Economic Advisors (CEA), Austan Goolsbee (University of Chicago) to be a member of the CEA, Cecilia Rouse (Princeton) to be a member of the CEA, and Daniel Tarullo (Georgetown University law school) to be a member of the Federal Reserve Board (FRB). See, notice. Location: Room 538, Dirksen Building.

10:00 AM. The Senate Homeland Security and Government Affairs Committee will hold hearing on President elect Obama's likely nomination of Janet Napolitano to be Secretary of Homeland Security. See, notice. Location: Room 342, Dirksen Building.

10:00 AM. The Federal Communications Commission (FCC) might hold an event titled "Open Meeting". The agenda includes adoption of rules to implement S 3663 [LOC | WW], "Short-term Analog Flash and Emergency Readiness Act", and annual performance awards for career Senior Executive Service personnel. The event will also include reports from FCC Bureau chiefs. Location: FCC, Commission Meeting Room, 445 12th St., SW.

11:15 AM. The Senate Finance Committee (SFC) will hold an organizational meeting. Location: Room 215, Dirksen Building.

12:00 NOON - 1:30 PM. The Federal Communications Bar Association's (FCBA) Annual Seminar Committee will hold a brown bag lunch. Location: Wilkinson Barker Knauer, 2300 N St., NW.

12:15 PM - 1:30 PM. Julius Knapp, Chief of the Federal Communications Commission's (FCC) Office of Engineering and Technology (OET) will speak at a meeting titled "White Spaces: How Will the FCC's Rules Work and What Consumer Devices are in the Pipeline?" The FCC's proceeding is titled "In the Matter of Unlicensed Operation in the TV Broadcast Bands Additional Spectrum for Unlicensed Devices Below 900 MHz and in the 3 GHz Band" and numbered ET Docket No. 04-186 and 02-380. See, FCC's order adopted on November 4, 2008, and story titled "FCC Adopts White Space Order" in TLJ Daily E-Mail Alert No. 1,852, November 4, 2008. The Federal Communications Bar Association's (FCBA) asserts that this is an FCBA event. Location: Sidley Austin, 6th floor, 1501 K St., NW.

5:00 PM. Deadline to submit applications to the National Telecommunications and Information Administration (NTIA) for a grant for the Pan-Pacific Education and Communications Experiments by Satellite (PEACESAT) Program. See, notice in the Federal Register, December 5, 2008, Vol. 73, No. 235, at Pages 74146-74148.

Rep. Hoyer's schedule for the week of January 12 states that no votes are expected in the House.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Practice and International Telecommunications Practice Committee will host a brown bag lunch titled "Satellite 201: So You Want to Launch a Satellite? Understanding the International and Domestic Regulatory Considerations". The speakers will be Tom Tycz (Goldberg Godles Wiener & Wright) and others. For more information, contact Christy Hammond chammond at wileyrein dot com or 202-719-7365. Location: Wiley Rein, 10th floor, 1750 K St., NW.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its SP 800-57 Part 3 [103 pages in PDF] titled "Recommendation for Key Management, Part 3 Application-Specific Key Management Guidance".

Deadline to submit reply comments to the Office of the U.S. Trade Representative (OUSTR) regarding the operation, effectiveness, and implementation of and compliance with trade agreements regarding telecommunications products and services, including the World Trade Organization (WTO) General Agreement on Trade in Services, the North American Free Trade Agreement (NAFTA), free trade agreements (FTAs) with Australia, Bahrain, Chile, Morocco, and Singapore, the Dominican Republic-Central America-United States FTAs. See, notice in the Federal Register, November 25, 2008, Vol. 73, No. 228, at Page 71707-71708.

Effective date of the U.S. Patent and Trademark Office's (USPTO) changes to its Trademark Rules of Practice. These changes pertain to applications, intent to use documents, amendments to classification, requests to divide, and post registration practice. See, notice in the Federal Register, November 17, 2008, Vol. 73, No. 222, at Pages 67759-67776.

Martin Luther King's Birthday. See, Office of Personnel Management's (OPM) list of 2009 federal holidays.

The House will not meet.

Effective date of the Department of the Treasury's (DOT) and the Federal Reserve Board's (FRB) rules implementing the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). See, text of UIGEA and notice in the Federal Register that describes and recites these rules. See, Federal Register, November 18, 2008, Vol. 73, No. 223, at Pages 69381-69411. See also, story titled "Treasury & FRB Publish Internet Gambling Rules" in TLJ Daily E-Mail Alert No. 1,858, November 18, 2008.

Inauguration Day.

The House will not meet.

12:30 - 2:00 PM. The Federal Communications Bar Association's (FCBA) Diversity and Young Lawyers Committees will host a brown bag lunch titled "Work/Life Balance". For more information, RSVP to Jessica Gonzalez at jg433 at law dot georgetown dot edu or Elizabeth Goldin at EGoldin at wileyrein dot com. Location: Georgetown University Law Center, 600 New Jersey Ave., NW.

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