|TLJ News from December 6-10, 2007|
Wainstein Discusses Export Controls
12/10. Kenneth Wainstein, the Assistant Attorney General in charge of the Department of Justice's (DOJ) National Security Division (NSD), gave a speech [5 pages in PDF] in Washington DC regarding export controls.
He said that the cold war threat posed by communist countries has been replaced by the war on terror, "which is a war mainly against terrorist groups that are not foreign governments". He noted that Hizballah has attempted to export from the U.S. night vision goggles, thermal imaging camera equipment and GPS modules. However, most of the actual illegal efforts to obtain U.S. military and dual use technologies that he discussed involve nation states.
He repeatedly referred to the People's Republic of China (PRC). He said that the Department of Homeland Security's (DHS) Immigration and Customs Enforcement (ICE) "has launched more than 540 investigations of illegal technology exports to China since 2000 and the Defense Criminal Investigative Service has opened 143 such investigations in the past year alone."
He said that one problem is that others seek U.S. technologies, including know how, data, and components. He added that "foreign experts are methodically searching out trade secrets to send back to their home countries".
He some outlined some of the methods used by others to circumvent technology transfer controls laws. These include entering into joint ventures with U.S. companies, attending trade fairs, using internet based intrusions to obtain sensitive data, and using diplomats.
He said that "we also see foreign governments using official delegations as platforms for illegal collection. In fiscal year 2005 alone, delegations from the few countries that are the most flagrant violators requested a total of over 3000 official visits to military bases and/or defense industry facilities."
He also said that other nations are sending "students who come to study in high-tech fields and thereby get exposure to our sensitive technologies". He elaborated that "it's no coincidence that several of the countries that send the most students happen to be the most active and determined collectors of our technology".
Wainstein said that the DOJ is accelerating its enforcement efforts, expanding training of field prosecutors, establishing joint task forces, and increasing the "coordination between our national security prosecutors at DOJ and the export licensing officials at the State Department’s Directorate of Defense Trade Controls and the Commerce Department’s Bureau of Industry and Security."
However, he said that "this initiative does not mean new regulations".
SEC Commissioner Discusses Interactive Data and Convergence of Accounting Standards
12/10. Securities and Exchange Commission (SEC) Commissioner Kathleen Casey gave a speech at an American Institute of Certified Public Accountants (AICPA) conference in Washington DC in which she discussed Section 404 of the Sarbanes Oxley Act, GAAP, IFRS, and the convergence of accounting standards, and making financial data interactive with eXtensible Business Reporting Language (XBRL)
She said that "There is an interesting parallel between the work to converge accounting standards and the work to implement XBRL. While the IASB, FASB and other standard setters are working to converge international accounting standards, the U.S. GAAP and IFRS taxonomy teams are working to ensure that their taxonomies are aligned."
She continued that "In a future in which companies file their financial statements in XBRL, preparers and users of financial data should not need to build separate technologies for different accounting systems. XBRL will be especially useful here as it offers a way to compare disclosures under U.S. GAAP and IFRS and highlight differences. Independent of each other, XBRL and convergence efforts have the potential to reduce accounting complexity and help improve the usefulness of financial data for investors. Used together, they can be even a more powerful force."
Also, on December 5, 2007, the SEC's recently created Office of Interactive Disclosure (OID) announced the release of its Beta release 1.0 of the "US GAAP Taxonomies and Documentation", a standard list of codes, or taxonomy, for tagging data for financial reporting. See also, SEC release.
The deadline to submit comments is April 4, 2008.
12/10. The Supreme Court released three non-technology related opinions and an Orders List [7 pages in PDF]. It also ordered that the motion of the Solicitor General in Quanta Computer v. LG Electronics for leave to participate in oral argument as amicus curiae and for divided argument is granted. Oral argument is scheduled for January 16, 2007. The case pertains to the patent exhaustion doctrine. See also, story titled "Supreme Court to Hear Case Regarding Patent Exhaustion Doctrine" in TLJ Daily E-Mail Alert No. 1,683, December 5, 2007.
12/10. The Department of Justice's (DOJ) Brian Roehrkasse stated in a release on December 10 that the DOJ's National Security Division (NSD) "initiated a preliminary inquiry in conjunction with the CIA's Office of Inspector General regarding the destruction of the interrogation videos described in CIA Director Mike Hayden’s message to employees on December 6." He added that "A preliminary inquiry is a procedure the Department of Justice uses regularly to gather the initial facts needed to determine whether there is sufficient predication to warrant a full investigation." Also, Sen. Patrick Leahy (D-VT) and Sen. Arlen Specter (R-PA), the Chairman and ranking Republican of the Senate Judiciary Committee (SJC), sent a letter to Attorney General Michael Mukasey requesting "information about the reported destruction by the Central Intelligence Agency of videotapes showing interrogations of detainees and about the Department of Justice review of this matter".
12/10. The CTIA announced in a release that it has issued a request for information (RFI) regarding cameraphone barcode scanning (CBS). The CTIA states that "there is potential in the U.S. to support and develop a common architecture that enables a mass code-scanning market" and that CTIA's Code Scan Action Team "is currently in the process of evaluating solutions to implement CBS on wireless phones".
District Court Dismisses Aharonian's Complaint
12/7. The U.S. District Court (DC) issued a Memorandum [4 pages in PDF] in Aharonian v. Gutierrez explaining its dismissal of the complaint.
The Secretary of Commerce appointed Margaret Peterlin to the position of Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the U.S. Patent and Trademark Office (USPTO). She previously worked for former House Speaker Denny Hastert (R-IL). Before that she worked for former House Majority Leader Dick Armey (R-TX).
The relevant statute, 35 U.S.C. § 3(b), provides that the person appointed to this position shall have "a professional background and experience in patent or trademark law".
Gregory Aharonian is the publisher of the Internet Patent News Service.
Aharonian and David Pressman filed a complaint in the District Court alleging violation of this statute, as well as the Administrative Procedure Act (APA). The District Court held that § 3(b) creates no private right of action. It also held that while the APA does create a private right of action, § 3(b) appointments are not reviewable under the APA.
Jon Dudas, the head of the USPTO, whose background is also working on Capitol Hill, stated in a release that "I am pleased the U.S. District Court dismissed this meritless lawsuit. Margaret Peterlin is well qualified to serve in her capacity as Deputy Under Secretary, and we at the Department continue to support her in fulfilling the duties of her office."
This case is Gregory Aharonian, et al. v. Carlos Gutierrez, U.S. District Court for the District of Columbia, D.C. No. 07-1224 (JR), Judge James Robertson presiding.
Court of Appeals Denies Petitions for Review of FCC's Deemed Granting of Verizon's Forbearance Petition
12/7. The U.S. Court of Appeals (DCCir) issued its opinion [8 pages in PDF] in Sprint Nextel v. FCC, petitions for review of the Federal Communication's Commission's (FCC) deemed granting of a forbearance petition of Verizon. The Court of Appeals denied the petitions.
Section 10 of the Communications Act, which is codified at 47 U.S.C. § 160(c), provides that "Any telecommunications carrier, or class of telecommunications carriers, may submit a petition to the Commission requesting that the Commission exercise the authority granted under this section with respect to that carrier or those carriers, or any service offered by that carrier or carriers. Any such petition shall be deemed granted if the Commission does not deny the petition for failure to meet the requirements for forbearance under subsection (a) of this section within one year after the Commission receives it, unless the one-year period is extended by the Commission. The Commission may extend the initial one-year period by an additional 90 days if the Commission finds that an extension is necessary to meet the requirements of subsection (a) of this section. The Commission may grant or deny a petition in whole or in part and shall explain its decision in writing." (Emphasis added.)
On December 20, 2004, Verizon filed with the FCC a petition for forbearance from Title II of the Communications Act, and the FCC's Computer Inquiry rules. See, Verizon's December 20, 2004, petition [29 pages in PDF], its letter of February 7, 2006 ( part I [25 pages in PDF] and part II [PDF]), and its February 17, 2006, letter [1 page in PDF]. This proceeding is Docket No. 04-440.
The FCC adopted no order or decision upon a majority vote of the members of the Commission. The FCC issued only a short release, and Commissioners wrote separate statements. There were only four Commissioners at the time, and they split 2-2.
The FCC issued a release on March 21, 2006, that states as follows: "The Verizon telephone companies (Verizon) filed a petition for forbearance from Title II of the Communications Act of 1934, as amended, and the Commission's Computer Inquiry rules on December 20, 2004. On December 19, 2005, the Commission extended the forbearance deadline to March 19, 2006. Verizon amended its petition on February 7 and February 17th, 2006. Section 10(c) provides that a forbearance petition ``shall be deemed granted if the Commission does not deny the petition for failure to meet the requirements for forbearance under subsection (a) within one year after the Commission receives it, unless the one year period is extended by the Commission.´´ This is to inform the public that, pursuant to section 10(c), the relief requested in Verizon’s petition was deemed granted by operation of law, effective March 19, 2006."
See, story titled "FCC Announces that Verizon Petition for Forbearance is Deemed Granted" in TLJ Daily E-Mail Alert No. 1,334, March 22, 2006.
Sprint Nextel and others filed petitions for review. Verizon intervened in support of the FCC. The various actions were consolidated. The Court of Appeals denied the petitions.
The Court of Appeals reasoned that it has authority to review final orders of federal administrative agencies. It asked, rhetorically, "But in this case where is the Commission ``order,´´ and where is the ``agency action´´?"
It concluded that there was none; the forbearance petition was denied by operation of a statute, not by agency action. It wrote that "The deadlocked vote cannot be considered an order of the Commission nor can it constitute agency action. The votes were actions of the individual Commissioners, not the Commission."
The Court of Appeals continued that "The Commission did not grant Verizon's petition and it did not deny it. In those instances in which the Commission does not deny a forbearance petition, Congress has spelled out the legal effect: the petition ``shall be deemed granted.´´ 47 U.S.C. § 160(c). The grant does not result in reviewable agency action. Congress, not the Commission, ``granted´´ Verizon’s forbearance petition."
The Court of Appeals also commented that "Petitioners also argue that failing to review a ``deemed granted´´ forbearance petition will enable the Commission, by simply not acting, to evade judicial review of any forbearance petition the Commission wants to grant. But that is the consequence of the system Congress mandated in § 160(c)."
This case is Sprint Nextel Corporation, et al. v. FCC and USA, U.S. Court of Appeals for the District of Columbia, petitions for review of a deemed granting of a forbearance petition, App. Ct. Nos. 06-1111, 06-1113, 06-1115, 06-1167, and 06-1200.
There is an effort in the Congress to change the "deemed granted" language of Section 160. On October 22, 2007, Rep. John Dingell (D-MI) and Rep. Ed Markey (D-MA) introduced HR 3914 [LOC | WW], the "Proper Forbearance Procedures Act of 2007".
This bill would remove the "deemed granted" clause from the forbearance petition section. See, story titled "Reps. Dingell and Markey Introduce Bill to End Deemed Granting of FCC Forbearance Petitions" in TLJ Daily E-Mail Alert No. 1,661, October 24, 2007.
Rep. Dingell and Rep. Markey stated in a release on December 7 that "The Court found what we already knew: On the critical matter of protecting consumers, the FCC failed to do its job. The decision casts the spotlight on the need to reform the forbearance process to ensure written opinions and to eliminate the ability of a forbearance petition to be `deemed granted´ simply by agency inaction."
Rep. Dingell is Chairman of the House Commerce Committee (HCC). Rep. Markey is Chairman of the HCC's Subcommittee on Telecommunications and the Internet.
As of December 7, HR 3914 had 9 sponsors -- all Democrats on the HCC. This bill has no Republican sponsors, and there are likely several Democrats on the Committee who would not support this bill.
AT&T to Open Wireless Network to More Devices
12/7. AT&T announced in an interview with USA Today that it will allow its customers to use other devices on its wireless network. See, USA Today story titled "AT&T flings cellphone network wide open" and dated December 5, 2007.
This announcement comes one week after a similar announcement by Verizon Wireless. See, story titled "Verizon Wireless to Open its Network to Others' Devices, Software and Apps" in TLJ Daily E-Mail Alert No. 1,681, December 1, 2007.
Neither company has published detailed technical specifications. AT&T did not publish any news release or statement in its web site.
Rep. John Dingell (D-MI), the Chairman of the House Commerce Committee (HCC), stated in a release that "I am pleased to hear AT&T's announcement, which continues a consumer-friendly trend of more open wireless networks. The devil is in the details, and I urge the company to implement its policy in a way that maximizes consumer choice. It is appropriate that barriers to consumer movement between and on wireless networks continue to fall, and I will be watching with interest as these developments unfold."
See also, story titled "Open Handset Alliance Announces Android and New Members" in TLJ Daily E-Mail Alert No. 1,670, November 6, 2007.
House Republicans Shuffle Commerce Committee Ranking Member Positions
12/7. House Republicans selected new Subcommittee ranking members for the House Commerce Committee (HCC).
This follows former Rep. Denny Hastert's (R-IL) resignation from the House, effective November 27, 2007. See, release of the Office of the Clerk of the House of Representatives.
Rep. Fred Upton (R-MI), who is currently the ranking member on the HCC's Subcommittee on Telecommunications and the Internet (STI), will become the ranking member of the Subcommittee on Energy, a position which Rep. Hastert held.
Rep. Cliff Stearns (R-FL), who is currently the ranking member on the Subcommittee on Commerce, Trade and Consumer Protection (SCTCP), will become the ranking member of the STI.
Rep. Ed Whitfield (R-KY), who is currently the ranking member of the Subcommittee on Oversight and Investigations (SOI), will become the ranking member of the SCTCP. Rep. John Shimkus (R-IL) will become the ranking member of the SOI. The SOI has examined waste, fraud and abuse in the Federal Communications Commission's (FCC) scandal plagued e-rate tax and subsidy program, as well as pretexting and related activity in the communications industry.
Rep. Nathan Deal (R-GA) will remain the ranking member of the Subcommittee on Health, which has jurisdiction over digitization of medical records, and health sector privacy issues.
12/7. Macrovision stated in a release that it and Gemstar-TV Guide International "have signed a definitive agreement for Macrovision to acquire Gemstar-TV Guide in a cash and stock transaction". Macrovision added that this transaction requires the "approval by two-thirds of the outstanding shares of Gemstar-TV Guide common stock, and a majority of the shares of Macrovision common stock voting at the special meetings to be held in connection with the transaction. News Corporation, which owns approximately 41% of the Gemstar-TV Guide common stock, has agreed to vote in favor of the transaction at the meeting of Gemstar-TV Guide stockholders to be held in connection with the proposed transaction, subject to the terms of a voting agreement."
12/7. The Government Accountability Office (GAO) released a report [97 pages in PDF] titled "International Trade: An Analysis of Free Trade Agreements and Congressional and Private Sector Consultations under Trade Promotion Authority". The Congress gave the President trade promotion authority in 2002. This authority lapsed in July of this year.
House Passes Financial Services Bill Regarding Consumer Protection Authority
12/6. The House amended and approved HR 3526 [LOC | WW] by voice vote. This is an untitled bill to include all banking agencies within the existing regulatory authority under the Federal Trade Commission Act (FTCA) with respect to depository institutions.
Rep. Barney Frank (D-MA), the Chairman of the House Financial Services Committee, stated in the House that this bill "will enhance the ability of the Federal bank authorities to provide consumer protection".
He also explained the reason for enacting this bill. "Congress passed an amendment to the Federal Trade Act that gave the Federal Reserve System the right to promulgate rules which defined what were unfair or deceptive practices engaged in by banks. The Federal Reserve has, for many years, declined to exercise that authority."
Moreover, "The Comptroller of the Currency and the Director of the Office of Thrift Supervision a few years ago promulgated very strict rules preempting State rules and State laws and regulations regarding the activities of national banks."
The current situation is that only the federal government can regulate, but it is not doing so.
This bill does not contain any grant of authority to states to regulate, or to enforce federal regulations. Also, the bill grants no authority to the Federal Trade Commission (FTC), which is primarily a consumer protection agency. For example, when the FTC takes action for unfair and deceptive trade practices, including internet based fraud, it cannot take action against any financial institutions that might be involved.
DOJ Requires Divestiture by CommScope
12/6. The Department of Justice's (DOJ) Antitrust Division filed a complaint in U.S. District Court (DC) against coaxial cable maker CommScope and Andrew to block CommScope's acquisition of Andrew. The parties simultaneously announced a settlement that requires CommScope to divest its interest in Andes, another coaxial cable maker.
CommScope announced the planned acquisition on June 27, 2007. See, release.
The complaint alleges violation of Section 7 Clayton Act, regarding acquisitions the effect of which "may be substantially to lessen competition, or to tend to create a monopoly", which is codified at 15 U.S.C. § 18. It also alleges violation of Section 8 of the Clayton Act, regarding interlocking directorates, which is codified at 15 U.S.C. § 19.
The complaint states that "CommScope is a large manufacturer of wire and cable products used by, among others, telecommunications companies. CommScope is the leading manufacturer of drop cable in the United States, with a market share of approximately 60 to 70 percent. ``Drop cable´´ is coaxial cable used by cable television providers to connect their transmission systems to their customers' premises and equipment inside the customers' premises." It adds that Andrew owns an interest in Andes Industries, Inc., subsidiaries of which make drop cable.
The DOJ stated in a release that "As the transaction was originally structured, CommScope, by acquiring Andrew, would have obtained Andrew's 30 percent ownership interest in Andes, including the right to appoint members to Andes' board of directors and substantial governance rights. CommScope and a subsidiary of Andes, PCT International Inc. (PCT), are currently two of only four companies that provide drop cable to cable television companies in the United States."
CommScope stated in a release on December 6 that under the settlement "the companies will be required to divest certain non-core assets, including Andrew's non-controlling minority interest in Andes Industries, Inc., a supplier of last-mile products for broadband communications networks, and other related assets."
It added that the proposed transaction "was cleared by the European Commission as well as other required regulatory authorities. The Andrew stockholders will vote on the transaction on December 10, 2007. CommScope expects to close the transaction by year end, subject to the satisfaction of other customary conditions."
See, the Competitive Impact Statement and proposed Final Judgement, also filed on December 6.
This case is USA v. CommScope, Inc. and Andrew Corporation, U.S. District Court for the District of Columbia, D.C. No. 1:07-cv-02200, Judge Royce Lamberth presiding.
DHS and Arizona Sign Agreement Regarding Implementation of REAL ID Act
12/6. Michael Chertoff (Secretary of Homeland Security) and Janet Napolitano (Governor of the state of Arizona), announced, signed, and released a Memorandum of Agreement (MOA) [5 pages in PDF] regarding implementation of the REAL ID Act. See, transcript of signing ceremony.
This MOA provides that "The State of Arizona shall be responsible for: Taking steps to become REAL ID compliant as soon a practicable after the REAL ID final rulemaking is published." The MOA does not provide any federal funding to Arizona.
Napolitano stated that this MOA "creates a new type of driver's license that will be added to the current type of driver's license we have in Arizona. This new driver’s license will satisfy the requirements of the Western Hemisphere Travel Initiative. It will be designed to meet the requirements as soon as practicable of REAL ID."
Chertoff said that there is an "accelerating consensus among the states about the importance of having these kinds of licenses. In addition to our agreement with Arizona, we've got agreements with Washington, Vermont and New York on enhanced driver’s licenses, and we're far along in discussions with Texas, California and Michigan and some other states."
He also said that "the American public is rightly exercised over the question of people who are unauthorized to work who are nevertheless working. And the challenge that we’ve had is to find a way to give employers a tool that is reasonable, secure and efficient, in terms of identifying who’s authorized to work and who’s not authorized to work, and eventually REAL ID can perform that function".
Bush Picks Mark Filip to Be Deputy Attorney General
12/6. On December 5, 2007, President Bush nominated Judge Mark Filip to be the Deputy Attorney General, the number two position at the Department of Justice (DOJ). See, White House release.
If confirmed by the Senate, he would replace Paul McNulty, who has resigned. Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), stated at an SJC business meeting on December 6 that the SJC will hold a hearing on the nomination during the week of December 10.
Filip is currently a Judge of the U.S. District Court for the Northern District of Illinois. He was appointed by President Bush. He is also a lecturer at the University of Chicago (UC) law school. See, UC bio.
Previously, he worked in the Chicago office of the law firm of Skadden Arps, for the U.S. Attorney's Office for the Northern District of Illinois, and as a law clerk for Justice Antonin Scalia.
People and Appointments
12/6. President Bush nominated Jonathan Adelstein (at right) to be a Commissioner of the Federal Communications Commission (FCC) for a term expiring June 30, 2013. He is currently an FCC Commissioner. See, White House release. Adelstein wrote in a statement that he thanks President Bush and Sen. Harry Reid (D-NV) for his reappointment. See also, statement by Kevin Martin, statement by Deborah Tate, statement by Robert McDowell, and statement by Michael Copps.
12/6. The Senate Judiciary Committee (SJC) approved the nominations of Gregory Brower (to be U.S. Attorney for the District of Nevada), Diane Humetewa (to be U.S. Attorney for the District of Arizona), and Edmund Booth (to be U.S. Attorney for the Southern District of Georgia) by unanimous consent, without debate.
12/6. President Bush nominated Stephen Limbaugh to be a Judge of the U.S. District Court for the Eastern District of Missouri. See, White House release.
12/6. President Bush nominated Ed Schafer to be Secretary of Agriculture. If confirmed by the Senate, he will replace Mike Johanns, who has resigned. See, White House release.
12/6. President Bush nominated William Smith to be a Judge of the U.S. Court of Appeals for the 1st Circuit. See, White House release.
12/6. Matthew Skelton, who was an attorney advisor in the Copyright Office's Office of Policy and International Affairs, has gone to work for Microsoft.
12/6. The Federal Communications Commission (FCC) released its Report [72 pages in PDF] to the Congress in its proceeding titled "In the Matter of Section 257 Triennial Report to Congress Identifying and Eliminating Market Entry Barriers For Entrepreneurs and Other Small Businesses". 47 U.S.C. § 257 requires that the FCC prepare this report every three years. This report is FCC 07-181.
12/6. The Recording Industry Association of America (RIAA) announced in a release that it has sent, on behalf of its member companies, another round of "396 pre-litigation settlement letters to 22 universities nationwide as part of the ongoing campaign against online music theft". The RIAA explained that "Each pre-litigation settlement letter informs the school of a forthcoming copyright infringement suit against one of its students or personnel. The letter requests that university administrators forward the letter to the appropriate network user to allow the individuals the opportunity to promptly resolve the matter and avoid a lawsuit."
Go to News from December 1-5, 2007.