8/31. The Department of Justice's (DOJ) Antitrust Division filed a complaint [25 pages in PDF] in the U.S. District Court (DC) against AT&T, T-Mobile USA and Deutsche Telekom that seeks an injunction against AT&T's acquisition of T-Mobile USA on the grounds that it would would substantially lessen competition in violation of Section 7 of the Clayton Act, which is codified at 15 U.S.C. § 18. See also, DOJ release.

Wayne Watts, General Counsel of AT&T, stated in a release that "we intend to vigorously contest this matter in court".

Watts said that "We are surprised and disappointed by today's action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated."

He argued that this merger would "Help solve our nation's spectrum exhaust situation and improve wireless service for millions", and "Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans", and would therefore "Result in billions of additional investment and tens of thousands of jobs". He concluded that "We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court."

Summary of Complaint. The complaint characterizes this as a 4 to 3 merger. It states that AT&T, Verizon, Sprint and T-Mobile USA "provide more than 90 percent of service connections to U.S. mobile wireless devices", and that "regional competitors often lack a nationwide data network, nationally recognized brands, significant nationwide spectrum holdings, and timely access to the most popular handsets".

The complaint alleges that the relevant product markets are "Mobile wireless telecommunications services" and "mobile wireless telecommunications services provided to enterprise and government customers".

The complaint also alleges that "local areas may be considered relevant geographic markets for mobile wireless telecommunications services". The complaint lists 97 local markets (cellular market areas or CMAs) "in which the transaction likely would substantially lessen competition for mobile wireless telecommunications services and each constitutes a relevant geographic market under Section 7 of the Clayton Act".

However, it adds that "it is appropriate to consider the competitive effects of the transaction at a national level". The complaint elaborates that "whereas CMAs are appropriate geographic markets from the perspective of individual consumer choice, from a seller's perspective, the Big Four carriers compete against each other on a nationwide basis and AT&T’s acquisition of T-Mobile will have nationwide competitive effects across local markets".

The complaint alleges that for enterprise and government customers, "the United States is a relevant geographic market".

The complaint further states that T-Mobile USA "places important competitive pressure on its three larger rivals, particularly in terms of pricing, a critically important aspect of competition. AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market."

It adds that "T-Mobile's investment in an advanced high-speed network and its innovations in technology and mobile wireless telecommunications services have provided, and continue to provide, consumers with significant value. Thus, unless this acquisition is enjoined, customers of mobile wireless telecommunications services likely will face higher prices, less product variety and innovation, and poorer quality services due to reduced incentives to invest than would exist absent the merger."

The complaint requests that "AT&T's proposed acquisition of T-Mobile be adjudged to violate Section 7 of the Clayton Act" and that the defendants "be permanently enjoined from and restrained from carrying out" the merger.

Statute. Section 7 of the Clayton Act provides, in part, that "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."

Statements Regarding DOJ Action. James Cole (at right), the Deputy Attorney General, wrote in a statement that the DOJ took this action because "the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services."

Sharis Pozen, the acting Assistant Attorney General in charge of the DOJ's Antitrust Division, wrote in a statement that "T-Mobile has been an important source of competition among the national carriers through innovation and quality enhancements. For example, T-Mobile rolled-out the first nationwide high-speed data network using advanced HSPA+ technology and the first handset using the Android operating system. It has also been an important source of price competition in the industry. Unless this merger is blocked, competition and innovation in the mobile wireless market, in the form of low prices and innovative wireless handsets, operating systems, and calling plans, will be diminished -- and consumers will suffer."

Harold Feld of the Public Knowledge (PK) stated in a release that "Fighting this job-killing merger is the best Labor Day present anyone can give the American people. AT&T's effort to recreate 'Ma Cell' by holding rural broadband hostage and threatening American jobs deserves nothing but scorn. The FCC should move as quickly as possible to follow the lead of the Department of Justice and reject the merger."

Craig Aaron, head of the Free Press, praised the DOJ's action in a release and added that "AT&T has already invested untold millions in lobbying and campaign contributions, and it is going to play every card in the deck to try to get this merger done."

FCC Review. The Federal Communications Commission (FCC), which is conducting a redundant antitrust merger review, has not yet made a determination.

FCC Chairman Julius Genachowski released a statement. He asserted that "Competition is an essential component of the FCC’s statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition. Vibrant competition in wireless services is vital to innovation, investment, economic growth and job creation, and to drive our global leadership in mobile. Competition fosters consumer benefits, including more choices, better service and lower prices."

The FCC does not have authority under Section 7 of the Clayton Act. It invented its antitrust merger review process shortly after enactment of the Telecommunications Act of 1996 by leveraging its authority to approve license transfers incident to a merger.

Were the FCC to issue a final order that seeks to block the merger, AT&T might seek judicial review of that order on multiple grounds, including that the FCC lacks statutory authority to conduct antitrust merger reviews.

This case is USA v. AT&T, Inc., T-Mobile USA, Inc. and Deutsche Telekom AG, U.S. District Court for the District of Columbia.

8/26. The U.S. Court of Appeals (10thCir) issued its opinion [18 pages in PDF] in Qwest v. Colorado PUC, a case regarding the duty of incumbent local exchange carriers (ILECs) to provide unbundled of network elements (UNEs) under 47 U.S.C. § 251 and the Federal Communications Commission's (FCC) rules.

Summary. Section 251 was enacted as part of the Telecommunications Act of 1996. The statute requires ILECs to provide leased access to network elements to competing carriers at reasonable rates, and directs the FCC to write implementing rules. However, it took the FCC almost a decade to write rules that could survive judicial review. The statute also directs the FCC to consider whether the failure to provide access to such network elements would impair CLECs ability to provide services. Consequently, the FCC's rules relieve ILECs of the duty to provide access to UNEs if the number of business lines in a local exchange reaches a certain threshold. This case is a dispute over the meaning of the rules' definition of "business line", and hence, whether Qwest must provide CLECs leased access to network elements in the relevant areas.

Statute and Rules. Subsection 251(c)(3) provides that ILECs have the duty "to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of this section and section 252 of this title. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service."

Subsection 251(d)(2) addresses FCC implementing rules. "In determining what network elements should be made available for purposes of subsection (c)(3) of this section, the Commission shall consider, at a minimum, whether -- (A) access to such network elements as are proprietary in nature is necessary; and (B) the failure to provide access to such network elements would impair the ability of the telecommunications carrier seeking access to provide the services that it seeks to offer."

Under the FCC's rules, ILECs are relieved of the obligation to provide access to unbundled network elements (UNEs) if, among other circumstances, the number of business lines in a local exchange reaches a certain threshold.

The FCC reasoned that when the number of business lines reaches a specified threshold, competitive local exchange carriers (CLECs) that operate in the area served by the wire center are deemed to be economically capable of deploying their own high-capacity loops and transport facilities. That is, they are no longer impaired without access to those UNEs at cost-based rates.

The present dispute turns on the meaning of "business line". The FCC rules, at 47 C.F.R. § 51.5, provide that "A business line is an incumbent LEC-owned switched access line used to serve a business customer, whether by the incumbent LEC itself or by a competitive LEC that leases the line from the incumbent LEC. The number of business lines in a wire center shall equal the sum of all incumbent LEC business switched access lines, plus the sum of all UNE loops connected to that wire center, including UNE loops provisioned in combination with other unbundled elements."

Dispute In This Case. Qwest Communications (now CenturyLink) is the ILEC in this dispute. Cbeyond is the CLEC. They dispute which UNE loops are included in a wire center's business line count. Qwest argues that the business line count includes all UNE loops connected to a wire center. Cbeyond and the Colorado Public Utilities Commission (CPUC) argue that the business line count includes only UNE loops that serve business customers and that are connected to switches.

The CPUC determined that the business line count includes only those UNE loops that served business customers and were connected to switches. This resulted in an impairment finding, and imposition of unbundling obligations on Qwest with respect to high capacity loops and transport at certain of Qwest wire centers.

Qwest filed a complaint in the U.S. District Court (DColo) against the CPUC seeking declaratory and injunctive relief. The District Court held that "non-business UNE loops are part of the business line count but non-switched UNE loops are not."

Both Qwest and Cbeyond appealed. The FCC filed an amicus curiae brief [32 pages in PDF] in which it argued that both non-business and non-switched UNE loops are part of the business line count.

Holding of Court of Appeals. First, the Court of Appeals considered whether the number of business lines in a wire center includes UNE loops that serve non-business customers.

The Court concluded that 47 C.F.R. § 51.5 "plainly states that all UNE loops count towards the number of business lines in a wire center". It added, "We hold that a UNE loop is included in the business line count regardless of whether it is used to serve a business or non-business customer."

Second, the Court considered whether the number of business lines in a wire center includes only UNE loops connecting end-user customers with ILEC offices for switched services.

The Court concluded that "the regulation is ambiguous". But, "Because the FCC's interpretation is not plainly erroneous or inconsistent with the language of the regulation, we must defer to the FCC's position and hold that the business line count includes UNE loops that are not connected to switches."

Thus, the Court of Appeals held that "The district court's ruling that the business line count includes nonbusiness UNE loops is AFFIRMED, and the district court's ruling that the business line count does not include non-switched UNE loops is REVERSED."

This case is Qwest Corporation v. Colorado Public Utilities Commission, et al., U.S. Court of Appeals for the10th Circuit, App. Ct. Nos. 10-1187 & 10-1212, an appeal from the U.S. District Court for the District of Colorado, D.C. No. 1:08-CV-02653-RPM. Judge Briscoe wrote the opinion of the Court of Appeals, in which Judges Seymour and Lucero joined.

The House will not meet.  It is in recess until 2:00 PM on September 7. However, it will hold pro forma sessions twice per week until then.

The Senate will not meet. It is in recess until 2:00 PM on September 6. However, it will hold pro forma sessions twice per week until then.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-67 Rev. 1 [35 pages in PDF] titled "Recommendation for the Triple Data Encryption Algorithm (TDEA) Block Cipher".

EXTENDED TO SEPTEMBER 6. Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Public Notice regarding certain universal service and intercarrier compensation reform issues. The FCC released this item on August 3, 2011. It is DA 11-1348 in WC Docket Nos. 10-90, 07-135, 05-337, and 03-109, CC Docket Nos. 01-92 and 96-45, and GN Docket No. 09-51. See, notice in the Federal Register, Vol. 76, No. 154, Wednesday, August 10, 2011, at Pages 49401-49408. See, August 29, 2011 order extending deadline.

10:00 AM - 2:30 PM. The American Constitution Society for Law and Policy will host an event titled "Legal Policy Shifts Since 9/11". At 10:00 - 11:30 AM there will be a panel titled "Surveillance". The speakers will be Kenneth Wainstein (O’Melveny & Myers, and former head of the DOJ's National Security Division), Jeffrey Rosen (George Washington University law school), Michael German (ACLU), Deepa Iyer (South Asian Americans Leading Together), Gregory Nojeim (Center for Democracy and Technology), and Suzanne Spaulding (Bingham Consulting Group). William Lietzau (Deputy Assistant Secretary of Defense for Rule of Law and Detainee Policy) will be the lunch speaker. At 1:00 - 2:30 PM there will be a second panel. The speakers will be Charlie Savage (New York Times), David Cole (Georgetown University Law Center), Richard Klingler (Sidley Austin), Wendy Patten (Open Society Foundations), Deborah Pearlstein (Princeton University), Geoffrey Stone (University of Chicago Law School). Location: National Press Club, 13th floor, 529 14th St., NW.

12:00 NOON - 1:00 PM. Shannon Rossmiller, an independent online terrorism investigator, will give a speech. See, notice. Location: Heritage Foundation, 214 Massachusetts Ave., NE.

Deadline to submit Form 477 to the Federal Communications Commission (FCC).

The House will meet in pro forma session at 10:00 AM.

The Senate will meet in pro forma session at 10:00 AM.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [36 pages in PDF] regarding removing the International Settlements Policy (ISP) from all U.S. international routes except Cuba. The FCC adopted this NPRM on May 12, 2011, and released the text on May 13, 2011. This item is FCC 11-75 in IB Docket No. 11-80. See, notice in the Federal Register, Vol. 76, No. 138, Tuesday, July 19, 2011, at Pages 42625-42631.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [82 pages in PDF] regarding reporting requirements for providers of international telecommunications services. The FCC adopted this NPRM on May 12, 2011, and released the text on May 13, 2011. This item is FCC 11-76 in IB Docket No. 04-112. See, notice in the Federal Register, Vol. 76, No. 138, Tuesday, July 19, 2011, at Pages 42613-42625.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Public Notice (PN) seeking further comments in response to its Notice of Proposed Rulemaking (NPRM) regarding its Lifeline and Link Up Universal Service programs. The FCC released this PN on August 5, 2011. It is DA 11-1346 in WC Docket Nos. 03-109 and 11-42, and CC Docket No. 96-45. The FCC adopted this NPRM on March 3, 2011, and released it on March 4. It is FCC 11-32. See also, notice in the Federal Register, Vol. 76, No. 159, Wednesday, August 17, 2011, at Pages 50969-50971.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-53 Appendix J [24 pages in PDF] titled "Privacy Control Catalog".

Labor Day. This is a federal holiday. See, OPM list of 2011 federal holidays.

The House will meet in pro forma session at 10:00 AM.

The Senate will meet 2:00 PM. It is scheduled to begin consideration of cloture on the motion to proceed to HR 1249 [LOC | WW], the "American Invents Act", the House version of the patent reform bill, and to consider the nomination of Bouie Donald to be a Judge of the U.S. Court of Appeals (6thCir). See, story titled "Senate to Take Up House Patent Bill in September" in TLJ Daily E-Mail Alert No. 2,279, August 4, 2011.

2:00 - 2:15 PM. The American Bar Association (ABA) will host a Training Tuesday webcast event titled "Sync Outlook contacts with Google". See, notice. Free.

3:00 PM. The Senate Appropriations Committee (SAC) will meet to mark up the FY 2012 Department of Homeland Security (DHS) appropriations bill. Location: Room 138, Dirksen Building.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) regarding information collection under its Patent Prosecution Highway (PPH) pilot program. See, notice in the Federal Register, Vol. 76, No. 131, Friday, July 8, 2011, at Pages 40339-40341.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) regarding the USPTO portions of the DOC's document titled "Preliminary Plan for Retrospective Analysis of Existing Rules", which it prepared in response to President Obama's January 18, 2011, Executive Order 13563 titled "Improving Regulation and Regulatory Review". See, notice in the Federal Register, Vol. 76, No. 130, Thursday, July 7, 2011, at Pages 39796-39797. See also, the USPTO's web page titled "Look Back Plan: Plan for Retrospective Analysis of Existing Regulations".

Deadline to submit initial comments in response to the Federal Communications Commission (FCC) in response to its notice of inquiry [19 pages in PDF] titled "Eighth Broadband Progress Notice and Inquiry". This is a Section 706 NOI concerning the availability of advanced telecommunications capability. The FCC adopted and released this NOI on August 5, 2011. It is FCC 11-124 in GN Docket No. 11-121. See also, story titled "FCC Releases NOI for 8th Section 706 Report" in TLJ Daily E-Mail Alert No. 2,283, August 8, 2011.

EXTENDED FROM AUGUST 31. Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Public Notice regarding certain universal service and intercarrier compensation reform issues. The FCC released this item on August 3, 2011. It is DA 11-1348 in WC Docket Nos. 10-90, 07-135, 05-337, and 03-109, CC Docket Nos. 01-92 and 96-45, and GN Docket No. 09-51. See, notice in the Federal Register, Vol. 76, No. 154, Wednesday, August 10, 2011, at Pages 49401-49408. See also, August 29, 2011 order extending deadline.

The House will return from its August recess. It will meet at 2:00 PM.

RESCHEDULED FROM AUGUST 3. 10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Cybercrime: Updating the Computer Fraud and Abuse Act to Protect Cyberspace and Combat Emerging Threats". The witnesses will be James Baker (DOJ's Associate Deputy Attorney General) and Pablo Martinez (U.S. Secret Service). See, notice. The SJC will webcast this event. Location Room 226, Dirksen Building.

10:00 AM. The Senate Finance Committee (SFC) will hold a hearing on several pending nominations, including Michael Punke (to be Deputy U.S. Trade Representative), Islam Siddiqui (to be Chief Agricultural Negotiator in the Office of the USTR), Paul Piquado (to be Assistant Secretary of Commerce in charge of the Import Administration), and David Johanson (to be a member of the U.S. International Trade Commission). See, notice. Location: Room 215, Dirksen Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Hochstein v. Microsoft, App. Ct. No. 2010-1551. Location: Courtroom 201.

12:00 NOON - 1:30 PM. The American Bar Association (ABA) will host a telecast panel discussion titled "Has Twombly Been Over-Turned?: The 7th Circuit's Text Messaging Case". See, December 29, 2010 opinion in In Re Text Messaging Antitrust Litigation, 630 F.3d 622. The speakers will be Rex Heinke (Akin Gump), Chris Sager (Cleveland Marshall law school), Anant Raut (Pepper Hamilton), Kenneth Glazer (K&L Gates), and John Delacourt (Plasma Protein Therapeutics Association). See, notice.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Practice Committee will host a brown bag lunch for planning purposes. For more information, contact Steve Sharkey at Steve dot Sharkey at T-Mobile dot com. Location: National Association of Broadcasters, 1771 N St., NW.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "An Update on the Law of Patent Infringement in the U.S.". The speakers will be former Judge Paul Michel, Ted Cruz (Morgan Lewis), Steven Sereboff (SoCal IP Law Group), and Meredith Addy (Steptoe & Johnson). Prices vary. CLE credits. See, notice.

2:30 PM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Nominations". Location: Room 226, Dirksen Building.

6:00 - 9:15 PM. The DC Bar Association will host a program titled "How to Litigate a Patent Infringement Case 2011". The speaker will be Patrick Coyne (Finnegan Henderson). The price to attend ranges from $89 to $129. Reporters are barred from attending most DC Bar events. CLE credits. See, notice. For more information, call 202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.

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