Congress Expands Powers of FTC

12/9. The House amended and approved S 1608, the "Undertaking Spam, Spyware, And Fraud Enforcement With Enforcers beyond Borders Act". This title renders the near acronym of US SAFE WEB Act. The Senate then approved the House version of the bill. It is now ready for President Bush's signature.

The bill increases the investigatory and information sharing powers of the Federal Trade Commission's (FTC). The bill will, among other things, enhance the FTC's ability to fight online fraud.

Legislative History. Sen. Gordon Smith (R-OR) introduced this bill on July 29, 2005. The Senate Commerce Committee approved this bill on December 15, 2005, with little discussion. See, story titled "Senate Commerce Committee Approves Bill to Expand FTC Powers to Pursue Online Fraud" in TLJ Daily E-Mail Alert No. 1,274, December 16, 2006.

The Senate approved its version of the bill on March 16, 2006, by unanimous consent. Neither the House Commerce Committee (HCC), nor any of its subcommittees, held a hearing or markup of this bill. The House approved an amendment in the nature of a substitute offered by Rep. Joe Barton (R-TX), the Chairman of the HCC, without debate, or roll call vote. On December 9, 2006, the Senate approved the bill, as amended by the House, by unanimous consent.

During the House of Representative's quick consideration Rep. Dennis Kucinich (D-OH) asked Rep. Barton, "Would you like to, for the benefit of those of us who aren't familiar with it, just give a couple-sentence summary that elaborates a little bit?"

Rep. Barton responded that "This is just a bill on spam and enforcement of antispam and spyware, things of this sort. The bill would provide additional authority to the FCC to investigate spam that originates overseas and fraudulent practices of that sort." The House then approved the bill.

Rep. Barton wrote in his extended remarks that "The issue is important because fraud perpetrated against our citizens increasingly originates or is committed outside the U.S: the Federal Trade Commission reports 20% of the complaints it received are ``cross-border´´ fraud complaints. Under current law, there is little the FTC can do to stop or prosecute a perpetrator outside the U.S."

He added that "The Safe Web Act will make two significant changes to help stop the fraud and protect consumers. First, it amends the FTC Act definition of “unfair or deceptive acts or practices” to include acts or practices involving foreign commerce. Second, it allows the FTC to share information and cooperate with foreign governments to investigate and take action on fraud complaints consistent with existing law enforcement practices."

Reaction. FTC Chairman Deborah Majoras wrote in a statement [PDF] that "Congress has taken an important step in the fight to combat cross-border fraud by passing the US SAFEWEB Act. Just as today's marketplace has gone global, so have scams and deception. Scammers cannot hide behind foreign borders to escape FTC law enforcers. I appreciate this congressional initiative to provide the Commission with useful tools that enhance our ability to bring law enforcement actions."

The Center for Democracy and Technology (CDT) wrote in its web site that this bill "will help the Federal Trade Commission be more effective in protecting consumers from spam, spyware, and Internet fraud on a global scale. The bill allows the FTC and its foreign counterparts to share confidential information and obtain investigative assistance from one another. CDT has long been supportive of this measure given the increasingly international nature of Internet crime."

Summary of the Bill. This bill increases the FTC's statutory authority in many ways. It will enable the FTC to more effectively pursue fraud, and especially online fraud, that crosses national boundaries.

While Rep. Barton and others have focused on the bill's application to spam, spyware and other internet based activity, this bill extends FTC authority in other areas as well. However, many of the new powers do not apply to antitrust investigations.

Section 5 of the FTC Act , which is codified at 15 U.S.C. § 45, is the provision that the FTC usually relies upon in actions against perpetrators of fraud. It currently provides, in part, that "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful"

The bill would expand the definition of "unfair or deceptive acts or practices" to include "acts or practices involving foreign commerce that -- (i) cause or are likely to cause reasonably foreseeable injury within the United States; or (ii) involve material conduct occurring within the United States."

The bill would also add a new subsection to 15 U.S.C. § 46, which pertains to "Additional powers of Commission". The new subsection 46(j) is titled "Investigative Assistance for Foreign Law Enforcement Agencies". It enumerates numerous powers to assist foreign agencies, including the conducting of investigations in the US. However, these new powers do not apply to common carrier activities, or to foreign governments that assist terrorists.

The bill also adds a new subsection 46(k) that authorizes the sharing of information with domestic and foreign criminal enforcement agencies when the FTC has "evidence that any person, partnership, or corporation, either domestic or foreign, has engaged in conduct that may constitute a violation of Federal criminal law".

The bill also amends 15 U.S.C. § 57b-2, which pertains to "Confidentiality". It amends subsection 57b-2(b)(6) to provide broader sharing of information with foreign agencies investigating such things as "fraudulent or deceptive commercial practices" and "foreign criminal laws".

Section 57b-2 currently contains a Freedom of Information Act (FOIA) exemption for FTC investigation information. The bill maintains the basic exemption: "Any material which is received by the Commission in any investigation, a purpose of which is to determine whether any person may have violated any provision of the laws administered by the Commission, and which is provided pursuant to any compulsory process under this Act or which is provided voluntarily in place of such compulsory process shall not be required to be disclosed under section 552 of title 5, United States Code, or any other provision of law, except as provided in paragraph (2)(B) of this section."

It then expands the exemption to include information acquired from foreign sources, including "any material obtained from a foreign law enforcement agency or other foreign government agency, if the foreign law enforcement agency or other foreign government agency has requested confidential treatment, or has precluded such disclosure under other use limitations, as a condition of providing the material".

Stored Communications Act. The bill also creates a new section of the FTCA titled "Confidentiality and Delayed Notice of Compulsory Process for Certain Third Parties".

The bill provides that "The procedures for delay of notification or prohibition of disclosure under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18, United States Code, including procedures for extensions of such delays or prohibitions, shall be available to the Commission ..." (Parentheses in original.)

Chapter 121 of Title 18 is the Stored Communications Act (SCA).

The SCA provides, at 18 U.S.C. § 2705, that the government can get from a court "an order delaying the notification required under section 2703(b) of this title for a period not to exceed ninety days". 18 U.S.C. § 2703(b) provides, in part, that "A governmental entity may require a provider of remote computing service to disclose the contents of any wire or electronic communication ..."

The bill provides that the FTC too can obtain from the court "an order delaying notification or prohibiting disclosure" if the court "finds that there is reason to believe that such notification or disclosure may cause an adverse result".

The bill continues that the service provider is immune from liability for failure to notify its customers, even liability under "contract or other legally enforceable agreement, for failure to provide notice to any person that such process has been issued".

The bill also provides that "All judicial proceedings initiated by the Commission under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.), chapter 121 of title 18, United States Code, or this section may be brought in the United States District Court for the District of Columbia or any other appropriate United States District Court." That is, the FTC is free to seek orders compelling disclosure of information from service providers and financial institutions in fora that are distant and inconvenient to the service providers and financial institutions.

Moreover, the bill provides that upon application of the FTC "all judicial proceedings pursuant to this section shall be held in camera and the records thereof sealed until expiration of the period of delay or such other date as the presiding judge or magistrate judge may permit".

Commentary. The new powers given to the FTC by this bill will enhance the FTC's ability to fight internet based fraud that crosses international borders.

This bill gives the FTC new powers to compel third party service providers to disclose the contents of stored wire and electronic communications, without notice to the owner of the communications, and with a gag order imposed upon the service provider. When the Congress considered related provisions in the context of extending the expiring provisions of the USA PATRIOT Act, such provisions generated opposition both within and outside of the Congress.

In contrast, there has been very little public debate or discussion of the contents of this FTC bill.

There may be many reasons for this. One may be that affected groups, Representatives and Senators have more confidence in the professionalism and integrity of the FTC than the Department of Justice (DOJ), and its Federal Bureau of Investigation (FBI).

Another explanation may be that the House and Senate Commerce Committees are more effective in exercising oversight over the FTC than the House and Senate Judiciary Committees are in exercising oversight over the DOJ and FBI. Yet another explanation may be timing. The House and Senate finally approved the FTC bill after the midterm elections, when there was less motivation to gain political advantage from opposing certain provisions of the bill.

Congress Extends R&D Tax Credit

12/8. The House and Senate approved HR 6111, the "Tax Relief and Health Care Act of 2006". This bill, among other things, revises and extends the research and development (R&D) tax credit, revises and extends the deduction for donation of computer technology and equipment, and extends normal trade relations status to Vietnam. The bill is now ready for President Bush's signature.

Section 104 of the bill extends and modifies the R&D tax credit that is codified at 26 U.S.C. § 41. The statute currently provides that the credit does not apply to any amount paid or incurred after December 31, 2005. The just enacted bill changes this to December 31, 2007. The just enacted bill also provides that "The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2005."

This is a two year extension. The Congress has a long history of enacting brief, and sometimes retroactive, extensions. The Congress has not yet made the R&D tax credit permanent.

The bill also increases in the rates of the Alternative Incremental Credit (AIC).

Robert Holleyman, head of the Business Software Alliance (BSA), stated in a release that "The R&D tax credit is critical to the vitality of the software industry. Now that Congress has extended the credit, BSA member companies can to continue to innovate at a pace consumers have come to expect and economies have come to rely on.  This extension will also permit more companies to perform research activities in the United States."

William Archey, head of the American Electronics Association (AEA), stated in a release that “The R&D tax credit is an important investment in the US economy and American innovation. This action was long overdue as the credit expired nearly one year ago."

He added that "By passing a strengthened version of the R&D tax credit, Congress acted to enhance US competitiveness. Because of this action, companies that were previously unable to do so can now take advantage of the R&D tax credit, and we expect this will increase US-based R&D programs. What we need is a greater predictability about the credit, and we hope the 110th Congress will pass a permanent R&D tax credit."

Phil Bond, head of the Information Technology Association of America (ITAA), praised the Congress in a release for the R&D tax credit provision.

Section 116 of HR 6111 pertains to "Corporate Donations of Scientific Property Used for Research and of Computer Technology and Equipment". It extends the deduction for donations of certain computer technology and equipment, which is codified at 26 U.S.C. § 170(e)(6), through December 31, 2007. This is a two year extension of the d eduction.

Also, HR 6111, at Sections 4001 through 4007, extends nondiscriminatory treatment to the products of Vietnam.

President Bush released a statement: "I commend the Congress for its bipartisan support for my request to approve legislation authorizing the grant of permanent normal trade relations to Vietnam. PNTR marks a significant step forward in the process of normalizing relations with Vietnam and will benefit both our nations. This designation will advance our trade and investment relations with Vietnam and ensure that the United States shares in the economic benefits generated by Vietnam's imminent membership in the World Trade Organization. Vietnam is demonstrating its strong commitment to continuing economic reforms, which will support political reform and respect for human rights. The American people welcome the remarkable transformation and economic progress in Vietnam, and we will continue to work together to strengthen our ties."

House But Not Senate Approves Caller ID Spoofing Bill

12/9. The House approved HR 5304, the "Preventing Harassment through Outbound Number Enforcement Act", by voice vote. This bill would add a new Section 1039 to Title 18 (the criminal code) titled "Caller ID spoofing". The Senate did not approve this bill. Proponents of this legislation will begin anew in the 110th Congress.

The bill provides that "Whoever knowingly modifies caller ID information with the intent to defraud or harass another person, or to use another person's caller ID information without consent, shall be fined under this title, imprisoned for not more than five years, or both."

The bill provides that a "telephone call" means "a call made using a telecommunications service or VOIP service".

The bill also includes a law enforcement exemption. It provides that "Any lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of the United States, a State, or a political subdivision of a State, or of an intelligence agency of the United States, or any activity authorized under chapter 224 of this title." ( Chapter 224 of Title 18 pertains to protection of witnesses.)

Rep. Tim Murphy (R-PA) introduced this bill on May 4, 2006. He will return in the 110th Congress. See also, Rep. Murphy's release.

Rep. Chris Cannon (R-UT) stated during floor debate on December 8, 2006, that "In the last few years, the criminal activity known as ``spoofing´´ has been on the rise. Caller ID spoofing occurs when a person deliberately uses an incorrect, fake or fraudulent caller identification to hide their identity in order to facilitate a fraudulent telephone call and to harass, trick or further a fraudulent scheme. The victims of this activity include the legitimate owner of a caller ID or the recipient of a fraudulent telephone call, who, as a result, may divulge legitimate financial or identifying information such as credit card numbers or other financial information. Spoofing is nothing less than criminal fraud."

Rep. Cannon continued that "Spoofing technology has become more accessible to the average person, either through the purchase of Internet telephone equipment or through Web sites specifically set up to spoof. These Web sites promote spoofing as a device to commit fraud, prank phone calls and political attacks, and are used by telemarketers who are attempting to avoid the current ``do not call´´ limits."

He concluded that "This legislation will help to deter telephone fraud, to protect consumers from harassment, and to increase protection of consumers and their personally identifiable data from fraudulent telephone use."

Rep. Bobby Scott (D-VA) stated that "A misleading caller ID can enable criminals to get information that they couldn't otherwise get. It will enable people to harass. There may be, however, legitimate uses for this technology, and that is why I have to oppose the motion to suspend the rules and pass the bill at this point."

"There are a lot of people for whom it should be illegal", said Rep. Scott. "We had a hearing and we found that there are a lot of legitimate uses for this. For example, women's shelters use misleading caller ID numbers. Businesses may use a misleading caller ID number if they are calling from one line of many lines. If they want people to call back on their main line, they want to use that caller ID."

Rep. Cannon replied that the bill uses the language "defraud or harass".

Rep. Scott also said that "I was under the impression earlier today that we were going to continue negotiating this and work on it and get a decent bill next year."

Rep. Murphy explained some of the abuses of caller ID spoofing. He said that "a criminal could try to obtain personal financial information from individuals by falsely using a bank's phone number. An ex-spouse can harass a former wife or husband who has blocked calls from the ex-spouse's phone line. A pedophile could stalk a child by using a school phone number or the phone number of a friend of the child. A sexual predator could use a doctor's office phone number. Or a terrorist could make threats from a government phone number, and there is no quick way to trace that original call".

See also, story titled "House Judiciary Committee Holds Hearing on Caller ID Spoofing" in TLJ Daily E-Mail Alert No. 1,492, November 20, 2006.

FCC General Counsel Opinion Authorizes McDowell to Participate in AT&T BellSouth Merger Proceeding

12/8. Sam Feder, General Counsel of the Federal Communications Commission (FCC), sent a memorandum [8 pages in PDF] to FCC Commissioner Robert McDowell regarding "Authorization To Participate in the AT&T/BellSouth Merger Proceeding".

Feder wrote, "In accordance with the provisions of 5 C.F.R. § 2635.502(d), you are hereby authorized to participate in the Commission’s decision on the AT&T/BellSouth merger proceeding described below. To date, you have not participated in this proceeding because you were, until May 31, 2006, employed by the Competitive Telecommunications Association (CompTel), which is one of a number of parties that have opposed the merger. You are now free to participate if you choose to do so."

He elaborated that "My decision is guided by FCC precedent, in which then-Chairman Kennard was authorized to take part in a proceeding addressing the repeal or modification of the personal attack and political editorial rules, despite the fact that he had previously represented a party in that same proceeding. I find any appearance concerns in that case to be greater than the potential appearance concerns here: Chairman Kennard previously participated as an advocate in the very same proceeding, while you never participated in any way in this proceeding on behalf of CompTel."

"And I find the Government’s interest in your participation here to be at least as strong as the Government’s interest in Chairman Kennard’s case", wrote Feder.

However, he added that "you are free as an FCC Commissioner to abstain from participating in and voting on any proceeding."

Commissioner McDowell (at left) released a statement on December 8 regarding Feder's determination. He wrote that "This evening, the FCC General Counsel, Samuel Feder, notified me that, in his opinion, I am authorized to participate in the AT&T-BellSouth merger proceeding. I am reviewing his opinion."

McDowell added that "I look forward to receiving a copy of Mr. Feder’s response to the letter of December 5 from Representatives Dingell and Markey. In the meantime, I strongly urge the participating parties and my four colleagues to resolve their differences in the same amicable and unified manner they did in the similar merger between SBC and AT&T just last year."

FCC Chairman Kevin Martin released a statement [PDF]. He wrote that "I appreciate the hard work and careful consideration that went into this important decision by the General Counsel. It is in the interest of the government and the American people to move this matter forward in a timely fashion. To that end, I look forward to working with all of my colleagues here on the Commission to reach a consensus."

Sen. Ted Stevens (R-AK) stated in a release that "This merger has been under consideration for almost nine months. The Commission has considered more than 10,000 comments and 600 reply comments. But now it is deadlocked. We have an odd number of FCC Commissioners for a reason, and the Commission functions best when there is a fifth person involved. A 2-2 stalemate does not serve the public interest. Now that the General Counsel has made this decision, I urge the Commission to reach a timely decision."

Gigi Sohn, head of the Public Knowledge (PK), stated in a release that "Commissioner McDowell made the right decision to recuse himself in this proceeding, and FCC General Counsel Sam Feder's opinion said nothing that should cause the Commissioner to change his view. The opinion made a tepid case at best for Commissioner McDowell to participate. Feder seemed to go out of his way to stress that it was McDowell's decision to participate. The Feder memo said it was a “very, very close call” whether McDowell should take part, and that reasonable parties could disagree on a decision. Indeed, the opinion cited the director of the Office of Government Ethics as saying he would decide against authorizing McDowell to participate. This indicates to us McDowell is on safer ground staying out and letting negotiations continue. If anything, this memo counsels extreme caution for McDowell."

The PK has previously argued that the FCC should condition its approval of the merger upon a network neutrality mandate. FCC Chairman Martin, who opposes imposing such conditions, needs a third vote to win approval for an unburdened merger. Reed Hundt, who was Chairman of the FCC from 1993 through 1997, is a member of the PK Board of Directors.

Josh Silver, head of the Free Press, another group that favors network neutrality mandates, stated in a release that "Pressing Commissioner McDowell to violate his ethical standards and cast the deciding vote on this mega-merger is a flagrant affront to the public’s demand for ethical and impartial policymaking." He added that "The proposed merger of AT&T and BellSouth would constitute the largest merger in the history of U.S. telecommunications and effectively resurrect Ma Bell. This new behemoth would dominate the broadband market and wield immense power over what we see and do online."

See also, story titled "Martin and Congressional Leaders Exchange Letters Re AT&T BellSouth Merger" in TLJ Daily E-Mail Alert No. 1,500, December 7, 2006.

People and Appointments

12/8. The Senate confirmed the nomination of John Kneuer (at right) to be Assistant Secretary of Commerce for Communications and Information -- that is, head of the National Telecommunications and Information Administration (NTIA).

12/8. The Senate confirmed Rachel Paulose to be the U.S. Attorney for the District of Minnesota for the term of four years.

12/8. The Senate confirmed Judge Kent Jordan to be a Judge of the U.S. Court of Appeals for the 3rd Circuit. He is currently a Judge of the U.S. District Court for the District of Delaware. He is one of the few judicial appointments of President Bush who has a background in some technology related area of law. He previously litigated patent cases.

More News

12/8. The Cato Institute published a short essay titled "Data Mining Can't Improve Our Security". The author is the Cato Institute's Jim Harper. He wrote that data mining for terrorism prediction, such as by the Department of Homeland Security's (DHS) Automated Targeting System (ATS), has two fundamental flaws: "First, terrorist acts and their precursors are too rare in our society for there to be patterns to find. There simply is no nugget of information to mine. Second, the lack of suitable patterns means that any algorithm used to turn up supposedly suspicious behavior or suspicious people will yield so many false positives as to make it useless. A list of potential terror suspects generated from pattern analysis would not be sufficiently targeted to justify investigating people on the list." See also, stories titled "FBI Director Mueller Testifies Before Senate Judiciary Committee" in TLJ Daily E-Mail Alert No. 1,500, December 7, 2006, and "DHS Discloses Some Details of Electronic Database" in TLJ Daily E-Mail Alert No. 1,497, December 1, 2006.

12/8. The Department of Homeland Security (DHS) published a notice in the Federal Register that extends the deadline to submit comments regarding its program titled "Automated Targeting System", or ATS. The deadline was December 4, 2006. The new deadline is December 29, 2006. The notice states that the "DHS has received a number of comments from the public requesting an extension of the comment period". See, Federal Register, December 8, 2006, Vol. 71, No. 236, at Page 71182.

12/8. The U.S. District Court (DC) issued a Magistrate Judge's order and memorandum opinion [15 pages in PDF] regarding pretrial discovery disputes in Robert Steinbuch v. Jessica Cutler and Ann Marie Cox. This is a civil action for invasion of privacy and intentional infliction of emotional distress brought by a former Senate Judiciary Committee (SJC) counsel for Sen. Mike DeWine (R-OH) against a former staff assistant for Sen. DeWine in connection with statements that she made in an internet blog. See also, original complaint [PDF]. This is D.C. No. 05-970 (PLF/JMF). Magistrate Judge John Facciola wrote the opinion. Judge Paul Friedman is the presiding Judge.

12/8. Attorney General Alberto Gonzales gave another speech in which he warned about "these cowardly villains who hide in the shadows of the Internet" and "other offenders who use the Internet to facilitate their crimes". He said that "We cannot allow ourselves to be ``outgunned´´ by criminals whose knowledge of the Internet and computers exceeds our own."

Supreme Court Grants Certiorari in Antitrust Cases

12/7. The Supreme Court (SCUS) granted certiorari in Leegin Creative Leather Products v. PSKS, an antitrust case regarding minimum resale price maintenance by manufacturers and intermediate distributors. The case could impact the way some consumer electronics products are marketed. The SCUS also granted certiorari in Credit Suisse First Boston v. Billing, an antitrust immunity case.

Leegin Creative Leather Products. The Supreme Court wrote in its Order List [2 pages in PDF] that "The motion of CTIA -The Wireless Association for leave to file a brief as amicus curiae is granted. The motion of Economists for leave to file a brief as amici curiae is granted. The motion of National Association of Manufacturers for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is granted."

Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1, provides that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." Section 1 also contains a criminal prohibition. The rest of the law exists in judicial interpretation and agency enforcement.

The SCUS held in 1911 that intrabrand vertical price fixing by manufacturers or intermediate distributors is a per se violation of the Sherman Act. That is, a manufacturer cannot fix the minimum price at which retailers sell its product. See, opinion in Dr. Miles Medical Co. v. John D. Park & Sons Co., which is reported at 220 U.S. 373.

However, more recently the SCUS has rendered opinions that have eroded the Dr. Miles rule. For example, it has held that vertical nonprice restraints and maximum resale price maintenance are not per se unlawful under the antitrust laws. Yet, the basic rule remains that minimum resale price fixing is a per se violation.

The Dr. Miles holding may be problematic in certain retail markets that involve rapidly evolving, complex, multi-featured products and services, such as communications handsets. Manufacturers and distributors seek not only to sell lots of the product or service at issue. They also seek to inform prospective customers of their news products, educate them regarding features, and train them in using the new products and services. And, they want to sell associated products or services. This means incenting resellers to do far more than merely sell the product or service at issue. In the absence of vertical integration, this entails contracts with resellers that impose terms and conditions regarding resale, including prices. For example, in the wireless context, carriers want resellers to sell lots of handsets. But, they also have an interest in reseller advertising and education of prospective customers. And, they want to sell the communications services that the handsets enable.

The satellite radio industry and some other tech sectors may also have an interest in how the Supreme Court decides this case.

Restraints are contractually imposed today on such things as minimum training of sales staff, and minimum retail space. These restraints are subject to (and would likely stand up under) rule of reason analysis. Moreover, with enough antitrust legal advice, and expertise in drafting contracts, manufacturers and distributors can often indirectly maintain minimum prices, without actually contracting to maintain minimum prices. What the SCUS might do is remove the final item, minimum resale price maintenance (RPM), from per se violation, to rule of reason analysis, and make the process of marketing simpler and more efficient.

PSKS, the plaintiff below, runs a women's clothing and accessories store. It filed a complaint in the U.S. District Court (EDTex) against Leegin Creative Leather Products (LCLP), which makes women's accessories, alleging violation of Section 1 of the Sherman Act, in connection with LCLP's suggested resale price policies. The District Court awarded $3.6 Million in treble damages to PSKS.

The U.S. Court of Appeals (5thCir) affirmed in a non-precedential opinion [PDF]. The District Court and Court of Appeals both applied the antitrust per se violation rule to LCLP's imposing of a minimum price fixing agreement on its retailer, PSKS. And now, the Supreme Court has decided to hear the case.

The CTIA -- Wireless Association submitted an amicus brief [31 pages in PDF] urging the Supreme Court to grant certiorari, reverse the Court of Appeals, and overturn the final vestiges of Dr. Miles.

The CTIA argued that "There is a consensus among lower courts, antitrust scholars, and economists that vertical restrictions on intrabrand competition are usually procompetitive and beneficial to consumers. There is no serious intellectual support for the proposition that such restrictions are always anticompetitive (or nearly so) and deserving of per se condemnation. Minimum resale price maintenance is one such vertical restriction." (Parentheses and italics in original.)

The CTIA wrote that its members "limit intrabrand retail price competition for legitimate and procompetitive reasons".

For example, "By guaranteeing a minimum gross margin between wholesale and retail prices, a manufacturer or intermediate distributor can enlarge the number of retailers that are willing to sell the product and create and preserve retailers' incentives to invest in valuable non-price competitive behavior, such as advertising and promoting the product. Retailers' incentives to provide such costly services are severely undermined when a competitor offers lower prices without providing them and without incurring the associated costs. Manufacturers and intermediate distributors have legitimate interests in preventing this free-riding behavior, and consumers benefit from receiving the services that vertical price restraints can promote. The current per se treatment of minimum resale price maintenance imposes large costs on businesses and consumers alike."

The CTIA added that "the practice is used to create incentives for retailers to engage in product advertising and promotion, to maintain adequate inventory, and to train sales personnel to explain new or complex products. Manufacturers and intermediate distributors could reasonably believe that resale price maintenance is necessary to prevent some retailers from free riding off the presale services supplied by others, and market forces will provide the necessary discipline if they are wrong, because inefficient practices will result in loss of sales to interbrand competitors."

The CTIA also commented up the affect of antitrust law upon electronic commerce. It wrote that "The dramatic growth of Internet commerce has vastly increased the threat of free-riding; retailers that provide costly point-of-sale services now lose sales to distant Internet sellers, not just local bricks-and-mortar free riders."

"If RPM were permissible, manufacturers or intermediate distributors could use that device to distribute their products through the Internet, while limiting free riding by Internet sellers. Instead, because RPM is now per se illegal, manufacturers and intermediate distributors now face the unattractive alternatives of forgoing Internet distribution entirely, or severely undermining the incentives of their bricks-and-mortar retailers to provide valuable point-of-sale service", the CTIA concluded.

Roy Englert and Donald Russell the law firm of Robbins Russell and Michael Altschul of the CTIA prepared the amicus brief of the CTIA.

TLJ spoke with Altschul, who is pleased with the decision of the Supreme Court to hear the case. He said that "it is appropriate for the last vestige of the Dr. Miles case to be removed." He added that "everyone has become artful" at maintaining uniform intrabrand prices through non-price mechanisms, and that "moving everything into rule of reason analysis will be far more efficient".

He also stated that he knows of no antitrust judgments against communications carriers or handset makers for setting minimum prices for handsets.

See also, amicus brief [PDF] of the National Association of Manufacturers (NAM) urging the SCUS to grant certiorari. It wrote that Dr. Miles, and the cases that limit it, have resulted in "incoherence" that forces manufacturers "to walk a precarious line in their relationship with the dealers that distribute their products, with aggressive procompetitive strategies that serve consumer welfare on one side -- and treble damages on the other."

This case is Leegin Creative Leather Products, Inc. v. PSKS, Inc., Sup. Ct. No. 06-480, a petition for writ of certiorari to the U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 04-41243. See also, Supreme Court docket.

Credit Suisse. The Supreme Court wrote in its Order List [2 pages in PDF] that "The motion of NYSE Group, Inc. for leave to file a brief as amicus curiae is granted. The motion of National Association of Securities Dealers, Inc. for leave to file a brief as amicus curiae is granted. The motion of Securities Industry Association, et al. for leave to file a brief as amici curiae is granted. The petition for a writ of certiorari is granted. The Chief Justice took no part in the consideration or decision of these motions and this petition."

The Office of the Solicitor General (OSG) wrote in an amicus curiae brief that there are two issues. The first issue is "Whether an antitrust complaint predicated on alleged collusive activity in the securities markets must, in order to survive a motion to dismiss on grounds of implied antitrust immunity, set forth allegations sufficient to support a reasonably grounded expectation that the plaintiff's claims do not rest on collaborative activities that are either permitted under the securities laws or inextricably intertwined with such permissible activities."

The OSG wrote that the second issue is "Whether conduct that is prohibited under the regulatory scheme governing public offerings of securities is categorically immune from liability under the federal antitrust laws because of the extensive regulatory authority exercised by the Securities and Exchange Commission over such conduct.

This case is Credit Suisse First Boston Ltd., et al. v. Glen Billing, et al., Sup. Ct. No. 05-1157, a petition for writ of certiorari to the U.S. Court of Appeals for the 2nd Circuit, App. Ct. Nos. 03-9284 and 03-9288. See also, Supreme Court docket.

People and Appointments

12/7. House Democrats selected Rep. John Conyers (D-MI) to be Chairman of the House Judiciary Committee (HJC) in the 110th Congress. He was the ranking Democrat in the 109th Congress. House Republicans selected Rep. Lamar Smith (R-TX) to be the ranking ranking Republican. He was the Chairman of the Subcommittee on Courts, the Internet and Intellectual Property. Rep. James Sensenbrenner (R-WI) was Chairman in the 109th Congress. See also, Rep. Smith's release.

12/7. House Democrats selected Rep. John Dingell (D-MI) to be Chairman of the House Commerce Committee (HCC) in the 110th Congress, which meets in January of 2007. He was the ranking Democrat in the 109th Congress.

12/7. House Democrats selected Rep. Charles Rangel (D-NY) to be Chairman of the House Ways and Means Committee in the 110th Congress. He is currently the ranking Democrat. House Republicans selected Rep. Jim McCrery (R-LA) to be the ranking Republican. Rep. Bill Thomas (R-CA), the outgoing Chairman, did not seek re-election.

12/7. House Democrats selected Rep. Henry Waxman (D-CA) to be Chairman of the House Government Reform Committee in the 110th Congress. House Republicans selected Rep. Tom Davis (R-VA) to be the ranking Republican. Rep. Davis was the Chairman in the 108th and 109th Congresses.

12/7. House Democrats selected Rep. Bart Gordon (D-TN) to be Chairman of the House Science Committee in the 110th Congress. House Republicans selected Rep. Ralph Hall (R-TX) to be the ranking Republican. Rep. Sherwood Boehlert (R-NY), the outgoing Chairman, did not seek re-election. See also, HSC release.

12/7. House Democrats selected Rep. Barney Frank (D-MA) to be Chairman of the House Financial Services Committee in the 110th Congress. He is currently the ranking Democrat. House Republicans selected Rep. Spencer Bachus (R-AL) to be the ranking Republican. Rep. Mike Oxley (R-OH), the outgoing Chairman, did not seek re-election. Rep. Bachus stated in a release that the matters that "await the committee's attention during the next Congress" include "data security" and "Sarbanes-Oxley Act implementation".

12/7. House Democrats selected Rep. David Obey (D-WI) to be Chairman of the House Appropriations Committee in the 110th Congress. He was the ranking Democrat in the 109th Congress. House Republicans selected Rep. Jerry Lewis (R-CA) to be the ranking Republican. Rep. Lewis was the Chairman in the 109th Congress.

12/7. Federal Election Commission (FEC) Commissioner Michael Toner announced his resignation, effective "this winter". His fixed term as a Commissioner would have expired in April of 2007. During his tenure, the FEC considered, but mostly rejected, attempts to regulate online political expression under the rubric of the Federal Election Campaign Act (FECA), as amended by the Bipartisan Campaign Reform Act (BRCA), which is also known as McCain Feingold. Toner stated in a release that "I am particularly pleased that earlier this year the Commission issued regulations protecting on-line political speech from many of the restrictions and prohibitions of the campaign finance laws. In so doing, the Commission ensured that millions of Americans in the future will have the ability to use the Internet to support the candidates of their choice without fear of FEC investigation or restriction." Toner was previously Chief Counsel of the Republican National Committee.

12/7. The Senate Finance Committee favorably reported the nomination of Eric Solomon to be Assistant Secretary of the Treasury.

FBI Director Mueller Testifies Before Senate Judiciary Committee

12/6. The Senate Judiciary Committee (SJC) held a hearing titled "FBI Oversight". The sole witness was Robert Mueller, Director of the Federal Bureau of Investigation (FBI). He testified regarding electronic surveillance, the DHS's ATS program, cyber crime, and the FBI's attempts to adopt IT.

Mueller (at left) submitted a prepared testimony for the SJC. The FBI published a complete copy in its web site. The SJC has published in its web site a document that consists of the first twenty and one-half pages of this thirty-one page document. The SJC document omits those portions pertaining to computer forensics labs, and the FBI's efforts to develop new IT systems.

DHS Automated Targeting System. Sen. Patrick Leahy (D-VT) partially read an opening statement. He addressed the Department of Homeland Security's (DHS) program titled "Automated Targeting System", or ATS. See, story titled "DHS Discloses Some Details of Electronic Database" in TLJ Daily E-Mail Alert No. 1,497, December 1, 2006.

Sen. Leahy (at right) wrote that the Bush administration "has been compiling secret dossiers on millions of unwitting, law-abiding Americans who travel across our borders". He continued that "It is simply incredible that the Administration is willing to share this sensitive information with foreign governments and even private employers, while refusing to allow U.S. citizens to see or challenge the so-called terror score that the government has assigned them based on their travel habits and schedules."

Sen. Leahy argued that "When done poorly or without proper safeguards and oversight, data banks do not make us safer, they just further erode Americans’ privacy and civil liberties. This Administration has gone to unprecedented lengths to hide its own activities from the public, while at the same time collecting and compiling unprecedented amounts of information about every citizen."

He added that "New technologies make data banks more powerful and more useful than they have ever been before. They have a place in our security regimen. But powerful tools like this are easy to abuse and are prone to mistakes. A mistake can cost Americans their jobs and wreak havoc in their lives. Mistakes on government watch lists have become legendary in recent years. We need checks and balances to keep government data bases from being misused against the American people. Data banks like this are overdue for meaningful oversight, and that is going to change in the new Congress."

Sen. Leahy asked Mueller why the government is operating this program. Mueller responded that "I am not familiar with the program", and that "it is a DHS program". But, he said, "we may well get information from that program".

Sen. Leahy also asked Mueller whether or not the DHS's ATS interfaces with the FBI’s Investigative Data Warehouse (IDW). Mueller responded, "I do not believe so", but he added that he is not certain.

Sen. Leahy concluded this line of questioning with the observation that "if we are having database after database after database with things that talk about Americans", this will lead to harm to innocent people. He elaborated that "if you get these intersected, you are going to have kids looking for a college loan, you are going to have people trying to get a job, somebody trying to get a security clearance, and they are told ``nope´´, we can't tell you why you are not getting it, and somebody has got them mistakenly on a list."

He added that "there is a growing concern in this country that the government knows too much about us and may be doing things with that information that none of us want done." And, he said the SJC will examine this more in the 110th Congress.

Electronic Surveillance. Sen. Arlen Specter (R-PA) attempted to ask Mueller about the electronic surveillance program that the Bush administration calls "Terrorist Surveillance Program". He first asked Mueller what assurances he could give that the program is worthwhile? However, Mueller refused to provide any information about the program, other than to say that "the program is classified" and "it is compartmented".

Sen. Specter (at right) commented that the SJC cannot even get a closed session with Mueller on the TSP. Sen. Specter concluded that "that is not what I view as a satisfactory response by the administration", and that this prevents the SJC from carrying out its oversight responsibilities.

Sen. Russ Feingold (D-WI) argued that President Bush, VP Dick Cheney, and Attorney General Alberto Gonzales have given political speeches about the TSP that include false statements. Sen. Feingold asserted that "they are falsely accusing their critics of sympathizing with terrorists".

Sen. Feingold also criticized the Bush administration's proposals for revising the Foreign Intelligence Surveillance Act (FISA). He said that the Bush administration wants to wipe out thirty years' of law.

Sen. Jeff Sessions (R-AL) defended Mueller, the FBI, and the DHS. He said, with reference to the IDW and ATS, that "it is easy to criticize your programs". He added, "I suggest that you continue those programs" that you think are appropriate, until stopped by the courts, or by the Congress by a termination of funding.

Sen. Jon Kyl (R-AZ) asked Mueller what authority does the FBI need that it does not now have. Mueller discussed FISA treatment of targets that are not connected to a foreign entity. He also discussed administrative subpoenas.

Cyber Crime. Mueller's prepared testimony addresses the FBI's Cyber Division. It states that "Shortly after September 11, the FBI established as our third priority protecting the United States against cyber-based attacks and high-technology crimes. In coordination with this priority and recognition of the international aspects and national economic implications of cyber threats, the FBI created a Cyber Division (CyD) at the headquarters level to manage and direct this nationally developing program."

The prepared testimony continues that "The rapid evolution of computer technology, coupled with ever‑increasing techniques used by terrorists, foreign intelligence actors, and criminals, requires FBI investigators and professionals to have highly-specialized computer based skills. The FBI Cyber Program uses a centrally coordinated strategy to support FBI priorities across program lines, assisting crucial counterterrorism, counterintelligence, and criminal investigations whenever aggressive technical investigative assistance is required. The Cyber Program also targets major criminal violators with a cyber nexus."

The testimony asserts that "We have achieved significant results in both computer intrusion investigations and cyber crime investigations." It goes on to discuss FBI efforts related to child pornography on the internet, and child exploitation facilitated by internet communications. It also describes the FBI's Internet Crimes Complaint Center.

However, the prepared testimony only addresses one FBI investigation regarding computer intrusion. This is the FBI investigation of the zotob worm, which targets computers running on Windows 2000.

The prepared testimony also states that computer intrusion cases "are expected to increase in the coming years".

FBI's Adoption of IT. Sen. Leahy read from an opening statement, in which he wrote that "I also remain greatly concerned about the FBI’s new paperless case management system, Sentinel. We have been told that Sentinel will cost the American taxpayers $425 million to complete and that this system will not be fully operational until 2009. On Monday, the Department of Justice Office of Inspector General issued a report finding that the FBI will need an addition $56.7 million to just to pay for Phase II of Sentinel and that there are serious concerns about the adverse impact that these additional costs could have on the FBI’s non-IT programs."

He added that "There have also been rumors about growing concern within the FBI that the Bureau will cut other mission-critical programs to pay for this program for several months. In addition, in October, the GAO issued a report that found that the FBI has no plan in place to address future staffing and human capital needs for Sentinel. After watching the FBI waste five years and millions of taxpayer dollars on the Trilogy program, I remain seriously concerned about this project. The American people cannot afford another fiasco."

See, DOJ's Office of the Inspector General's redacted report [112 pages in PDF] titled "Sentinel Audit II: Status of the Federal Bureau of Investigation's Case Management System". See also, story titled "DOJ Report Discusses FBI's Failures in Creating a Secure Web Accessed File System" in TLJ Daily E-Mail Alert No. 1,499, December 5, 2006.

Mueller's prepared testimony provides little information. It states that "One of the most critical programs to the future of the FBI’s IT posture is Sentinel, for which we awarded a $305 million contract to Lockheed Martin earlier this year. Sentinel will deliver an electronic information management system, automate workflow processes for the first time, and provide a user-friendly web-based interface to access and search across multiple databases. Sentinel will help the FBI manage information beyond the case-focus of the existing Automated Case Support and will provide enhanced information sharing, search, and analysis capabilities. Sentinel will also facilitate information sharing with members of the law enforcement and intelligence communities. The Sentinel program will be developed and deployed over time -- in four phases -- with each phase introducing new capabilities. Existing information will be migrated to the new system throughout the phases so that selected systems can be retired by the end of the fourth phase."

Mueller said at the hearing that there are no "budget shortfalls", and that "the Sentinel project is on budget".

He later stated, in connection with the appropriations process, that the FBI wants $100 Million in the continuing resolution for Sentinel. He said too that the FBI learned from its Virtual Case File mistakes, and that Sentinel should not be delayed for lack of funding.

Other Topics. Many Senators participated in the hearing, but had nothing to say about any technology related subjects.

None of the Senators asked questions or made statements about investigation and prosecution of intellectual property related crimes. None discussed any data retention mandates. None discussed proposals to enact a criminal statute that would impose a web site labeling mandate. Mueller did not raise any of these subjects in his prepared testimony or during his oral testimony.

Sen. Herb Kohl (D-WI) discussed violent crime in Milwaukee, Wisconsin. He said that he wants more FBI agents in his state, a visit by Mueller, and further study and assistance from the FBI. Mueller stated, among other things, that every Senator wants more FBI agents, and that he recently visited Milwaukee.

Sen. Jon Cornyn (R-TX) discussed violence along the border of Texas and Mexico, and the Department of Justice's use of confidential informants.

Sen. Charles Grassley (R-IA) discussed the FBI's investigation of the 2001 anthrax attacks, and the FBI's refusal to provide the SJC a briefing on the investigation.

Sen. Diane Feinstein (D-CA) discussed gang violence. She argued that it is not a high enough priority at the FBI.

Sen. Specter discussed and asked questions about investigations of a poisoning death of a former Russian official in London. Sen. Specter urged the FBI to assist British investigators. Mueller said that the FBI is assisting. Sen. Specter added that this matter could have ramifications. No one at this hearing discussed whether or not this could affect Russia's joining the World Trade Organization (WTO).

Martin and Congressional Leaders Exchange Letters Re AT&T BellSouth Merger

12/6. Kevin Martin, Chairman of the Federal Communications Commission (FCC), announced that he sent a letter to Sam Feder, the General Counsel of the FCC, asking him to consider authorizing FCC Commissioner Robert McDowell to participate in the FCC's pending consideration of the merger of AT&T and BellSouth.

Chairman Martin sent a letter [PDF] to Congressional leaders on December 1, 2006, informing them of this. Congressional Democrats have responded.

Feder (at left) previously worked as a legal advisor to Martin, and before that, for former Commissioner Harld Furchtgott-Roth.

On March 5, 2006, AT&T and BellSouth announced that the two companies will merge. See, BellSouth release and AT&T release. See also, story titled "AT&T and BellSouth Announce Merger" in TLJ Daily E-Mail Alert No. 1,323, March 6, 2006.

The Department of Justice (DOJ), which has antitrust merger review authority, approved the merger on October 11, 2006. See, story titled "DOJ Approves AT&T BellSouth Merger" in TLJ Daily E-Mail Alert No. 1,466, October 11, 2006.

The FCC, which does not possess, but nevertheless exercises, antitrust merger review authority, continues to withhold its approval of the merger. Two Republican Commissioners, Kevin Martin and Deborah Tate, seek to approve the merger. Two Democratic Commissioners, Michael Copps and Jonathan Adelstein, are withholding their approval of the merger. They seek to condition the FCC's approval with competition related provisions, including a network neutrality mandate. Commissioner McDowell has not participated, because of his representation prior to becoming an FCC Commissioner. Martin now seeks a third vote from Commissioner McDowell.

Martin Letter to Congress. Martin wrote in his letter to Congressional leaders that "It now appears that, despite working for months to reach consensus with my colleagues, three attempts over the past six weeks to have this item considered at an open meeting, and countless hours of internal deliberations, the Commission has reached an impasse."

Martin continued that "Although Commissioner McDowell is currently not participating in this proceeding, the FCC's general counsel ``may authorize [him] to participate in the matter based on a determination, made in light of all relevant circumstances, that the interest of the Government in the employee's participation outweighs the concern that a reasonable person may question the integrity of the agency's programs and operations.´´" (Brackets in original.)

See also, stories titled "FCC Again Delays Approval of AT&T BellSouth Merger" in TLJ Daily Alert No. 1,482, November 3, 2006, "FCC Further Delays AT&T BellSouth Merger Decision and NOI on Broadband Industry Practices" in TLJ Daily Ee-Mail Alert No. 1,468, October 13, 2006, and "FCC Delays its AT&T BellSouth Merger Review Decision" and TLJ Daily E-Mail Alert No. 1,467, October 12, 2006.

Martin wrote that, given the impasse, "I have asked the General Counsel to consider whether the Government's interest would be served by permitting Commissioner McDowell -- who has not participated in this proceeding thus far -- to participate." Martin cited as authority 5 C.F.R. § 2635.502(d).

Inouye Letter. Sen. Daniel Inouye (D-HI) is the ranking Democrat on the Senate Commerce Committee, and soon to be its Chairman. He wrote a letter to Martin "to express my disappointment with you apparent willingness to waive government recusal rules in order to enable Commissioner Robert McDowell's participation in this proceeding."

Sen. Inouye (at left) added, "I urge you to reconsider such drastic action and to return to constructive negotiations with your other colleagues. In particular, I am disturbed by your conclusion that negotiations are at an impasse."

Barton and Upton Letter. Rep. Joe Barton (R-TX) is the current Chairman of the HCC. Rep. Fred Upton (R-MI) is the current Chairman of the HCC's Subcommittee on Telecommunications and the Internet. They oppose a network neutrality mandate, beyond giving the FCC authority to enforce its August 2005 policy statement [3 pages in PDF] regarding network neutrality through case by case adjudicatory proceedings. They sent a letter to Martin on December 6, 2006.

They wrote that "Two hundred and fifty days have now transpired since AT&T and BellSouth filed the applications, and we share your concern that the Commission has reached an impasse."

"Eighteen state public utility commissions, three countries, and the Department of Justice approved the AT&T-BellSouth transaction without conditions." They continued the FCC has received many comments, and that it "has been afforded an ample amount of time to review, debate, and reach a conclusion regarding the transfer of licenses. Unfortunately, it appears that certain Commissioners are attempting to effectuate industry-wide policy by imposing conditions on AT&T and BellSouth in exchange for approving the transaction."

Rep. Barton and Rep. Upton added that "Commissioners may have legitimate policy concerns regarding the regulation of certain services within the Commission's jurisdiction. However, the Commission's consideration of company-specific transactions should not be used to manipulate the Commission's rulemaking process.  Industry-wide issues should be addressed industry-wide. Mergers and acquisitions should not be held hostage in order to advance a particular policy agenda that would otherwise not be sustainable through the Commission's rulemaking process."

They concluded that since the FCC "appears unable to act", it is now "appropriate for the Commission's General Counsel to examine whether the Government's interest would be served by permitting Commissioner McDowell to participate."

Dingell and Markey Letter. Rep. John Dingell (D-MI) is the the ranking Democrat on the HCC, and soon to be the Chairman. Rep. Ed Markey (D-MA) is the ranking Democrat on the Subcommittee on Telecommunications and the Internet. He is likely to be the next Chairman of the Subcommittee. They support imposing a broader network neutrality mandates on providers of broadband access services. They sent a letter [4 pages in PDF] to Feder that is in the nature of written interrogatories. There are fourteen multi-part questions. They ask for a response by Monday, December 11, 2006.

People and Appointments

12/6. Sen. Arlen Specter (R-PA), the Chairman of the Senate Judiciary Committee (SJC), spoke with reporters regarding judicial appointments after the conclusion of the SJC's hearing on December 6, 2006, titled "FBI Oversight". He declined to state what advice he is giving to President Bush or members of his administration. He said that the President can nominate whomever he chooses. However, Sen. Specter added that he is "looking for economy of time". He elaborated that he does not want to take up time with "nominees who can't get confirmed". However, he did not identify who any of these might be. And, he refused to comment regarding either Haynes, Boyle, or Meyer.

12/6. The Senate confirmed Robert Gates to be Secretary of Defense. See, statement by President Bush.

12/6. President Bush withdrew the nomination of David Laufman to be Inspector General at the Department of Defense. See, White House release.

12/6. Jared Cohen (President of Carnegie Mellon University) was named Chair of the Department of Homeland Security's (DHS) Secure Borders and Open Doors Advisory Committee (SBODAC). John Chen (Ch/CEO/P of Sybase) was named Co-Chair. See, DHS release for a list of other members of the SBODAC.

12/6. The Senate Finance Committee (SFC) approved the nomination of Phillip Swagel to be Assistant Secretary for Economic Policy at the Department of the Treasury.

12/6. The Senate Finance Committee (SFC) approved the nomination of Robert Hoyt to be General Counsel at the Department of the Treasury.

12/6. The Senate Finance Committee (SFC) approved the nomination of Deborah Wince-Smith to be a member of the Internal Revenue Service Oversight Board. She is President of the Council on Competitiveness. She was Assistant Secretary for Technology Policy in the Department of Commerce during the administration of the first President Bush.

12/6. The Senate Finance Committee (SFC) approved the nomination of Michele Davis to be Assistant Secretary for Public Affairs at the Department of the Treasury.

12/6. The Senate Finance Committee (SFC) approved the nominations of Dean Pinkert and Irving Williamson to be members of the US International Trade Commission (USITC).

12/6. Gail MacKinnon was named SVP of Global Public Policy at Time Warner Inc., effective January 2, 2007. She will report to EVP Carol Melton. MacKinnon will help oversee all of Time Warner’s government, political and public policy activities in Washington DC. She was previously SVP for Government Relations at the National Cable and Telecommunications Association (NCTA). She will be replaced at the NCTA by Steve Vest, an internal promotion.

More News

12/6. Sen. Arlen Specter (R-PA), the Chairman of the Senate Judiciary Committee (SJC), spoke with reporters regarding the SJC's agenda for the 110th Congress after the conclusion of the SJC's hearing on December 6, 2006, titled "FBI Oversight". He said the several matters in the current 109th Congress will carry over into the 110th Congress, including immigration reform, the asbestos bill, and judicial nominations. He did not reference any intellectual property related issues. He added that "I am sorry to loose the gavel", but that he will work with his party to regain control of the Senate in the 111th Congress.

12/6. A grand jury of the U.S. District Court (SDTex) returned a nine count indictment against Rafael G. Adame charging wire fraud in violation of 18 U.S.C. § 1343 in connection with his alleged submission of fraudulent requests for payments from the Federal Communications Commission's (FCC) fraud plagued e-rate subsidy program. See, Department of Justice (DOJ) release.