House Subcommittee Plans Hearing on Online Advertising

6/13. Rep. Bobby Rush (D-IL), Chairman of the House Commerce Committee's (HCC) Subcommittee on Commerce, Trade, and Consumer Protection, and Rep. Ed Whitfield (R-KY), the ranking Republican on the Subcommittee, issued a joint release regarding the online advertising and the Google and Yahoo agreement of June 12, 2008.

The two stated that the Subcommittee plans to hold a hearing "examining online advertising issues this summer".

Rep. Rush stated that the June 12 agreement "further underscores the need for close scrutiny of the impact on consumers. We are preparing to hold a hearing on this important issue this summer".

Rep. Whitfield stated that the June 12 agreement "further highlights the need to examine what risks agreements such as these pose to consumer privacy. There remain a number of questions surrounding what personal information these types of companies collect from consumers’ use of the internet and how those data sets may be combined for future use. I look forward to working with Chairman Rush in the months to come, as well as with industry and consumer groups, to determine how best to protect consumer privacy in an ever-expanding, ever-changing on-line world without hindering consumer access to personalized internet content."

See also, story titled "Google and Yahoo Announce Search and Advertising Agreement" in TLJ Daily E-Mail Alert No. 1,779, June 13, 2008.

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6/13. The U.S. District Court (WDWa) sentenced Asdrubel Sampayo to five years probation following his plea of guilty to mail fraud in connection with a scheme to steal and sell toner cartridges over eBay. Sampayo worked for Xerox as a customer service engineer. He serviced copiers at a Boeing facility in the state of Washington. He placed fraudulent orders for cartridges with a total value of $490,000 for the purpose of reselling them over eBay. He received a light sentence because of his current service with the U.S. Navy in the Persian Gulf, and "support shown by the Navy command staff". However, the sentence does require restitution. See, release of the U.S. Attorneys Office for the Western District of Washington.

6/13. The Bureau of Industry and Security (BIS), which regulates exports, announced that it has adopted a rule that "revises a license exception in the Export Administration Regulations to allow the export of mobile phones as gifts sent by individuals to eligible recipients in Cuba." The BIS added that "is taking this action to provide support for individuals to support democracy-building efforts for Cuba by enabling the free exchange of information among Cuban citizens and with persons in other countries." This exception applies to "mobile phones and software, batteries, chargers, memory cards and other accessories" as well as to "receive-only radio equipment for reception of commercial/civil AM/FM and short wave publicly available frequency bands". See, notice in the Federal Register, June 13, 2008, Vol. 73, No. 115, at Pages 33671-33673.

NCTA Releases Report on Cable Broadband

6/12. National Cable and Telecommunications Association (NCTA) released a report [54 pages in PDF], prepared by Bortz Media and Sports Group, Inc., titled "An Analysis of the Cable Industry’s Impact on the U.S. Economy".

This report concludes that "As of 2007, the cable industry (directly and indirectly) accounted for 1.5 million U.S. jobs representing almost $62 billion in personal income. Gross economic output attributable to the industry amounts to nearly $227 billion." (Parentheses in original.)

The report also asserts that the "cable industry's early and ongoing commitment to deploying broadband infrastructure and delivering the most advanced broadband service offerings could have resulted in U.S. broadband penetration that is on the order of four percentage points higher than it would have been if cable’s commitment had been significantly reduced or delayed."

And, it states that "cable has fostered true competition in local telephone service -- capturing almost 15 million customers by the end of 2007 and adding over five million in the past year alone."

Also, Kyle McSlarrow, head of the NCTA, gave a speech on June 9 titled "Cable Broadband's Platform: Innovation for the Consumer".

He stated that "the cable industry has invested over $130 billion to deploy hybrid fiber networks and new services over the last decade or so".

He also said that "You will occasionally hear it said, however, that ``real´´ innovation only takes place on the edge of the network ... that broadband networks are just ``pipes.´´ But such a view wrongly assumes a false rivalry between innovation at the edge and in the network and totally ignores the new paradigm we see in today’s broadband marketplace."

He argued that "we are part of an interactive ``Internet ecosystem´´ and as platform providers we benefit when that ecosystem is healthy and consumers are able to obtain the benefits of the products and services they want. Unfortunately, this point is lost on many of the net neutrality advocates whose stilted view of networks informs the almost laughable allegation that we have an interest in undermining the ``new world´´ of broadband to protect the ``old world´´ of linear video ... in which case, we sure are wasting a lot of time and money enabling all these great applications."

Google and Yahoo Announce Search and Advertising Agreement

6/12. Yahoo stated in a release on June 12 that "discussions with Microsoft regarding a potential transaction -- whether for an acquisition of all of Yahoo! or a partial acquisition -- have concluded." Yahoo stated in a second release on June 12 that "it has reached an agreement with Google" regarding search and advertising.

Yahoo stated that under its agreement with Google, Yahoo may "run ads supplied by Google alongside Yahoo!'s search results and on some of its web properties in the United States and Canada. The agreement is non-exclusive ..."

Also, the agreement provides that Yahoo "will select the search term queries for which -- and the pages on which -- Yahoo! may offer Google paid search results. Yahoo! will define its users' experience and will determine the number and placement of the results provided by Google and the mix of paid results provided by Panama, Google or other providers. The agreement applies to paid search and content match and does not apply to algorithmic search. The agreement also applies to current partners in Yahoo's publisher network."

Google elaborated in a release on June 12 that this agreement gives Yahoo the ability to use Google's search and contextual advertising technology through its advertising programs titled "AdSense for Search" and "AdSense for Content".

Google also disclosed that the two companies have "agreed to enable interoperability between their respective instant messaging services".

Neither Google nor Yahoo disclosed any financial terms.

Yahoo's release regarding Microsoft also states that "The conclusion of discussions follows numerous meetings and conversations with Microsoft regarding a number of transaction alternatives, including a meeting between Yahoo! and Microsoft on June 8th in which Chairman Roy Bostock and other independent Board members from Yahoo! participated. At that meeting, Microsoft representatives stated unequivocally that Microsoft is not interested in pursuing an acquisition of all of Yahoo!, even at the price range it had previously suggested."

Yahoo also stated that Microsoft's proposal to acquire Yahoo's search business "would not be consistent with the company's view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo! stockholders."

Microsoft stated in a release on June 12 that "In the weeks since Microsoft withdrew its offer to acquire Yahoo!, the two companies have continued to discuss an alternative transaction that Microsoft believes would have delivered in excess of $33 per share to the Yahoo! shareholders. This partnership would ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers."

It added that "As stated on May 3rd and reiterated on May 18th Microsoft was not interested in rebidding for all of Yahoo!. Our alternative transaction remains available for discussion."

Antitrust. Google also made the following statement regarding antitrust reviews in its release: "Although Google and Yahoo are not required to receive regulatory approval of the arrangement before implementing it, the companies have voluntarily agreed to delay implementation for up to three and a half months to give the U.S. Department of Justice time to review the arrangement."

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that "This is not a merger. It does not seem that either competition or consumers are harmed by a non-exclusive business deal, which does not eliminate Yahoo from any of the marketplaces it is active in. With no dimunition of Yahoo’s competitive ability, we don’t see where competition gets harmed and we don’t see where consumers get harmed."

Black added that "Even though serious antitrust problems are unlikely, it was appropriate for the parties to offer up a delay while regulators review the deal. This is a good provision to help everyone understand the facts surrounding the deal and make sure there is no harmful impact on competition or consumers."

DOJ and Realtors Settle Antitrust Action Regarding Virtual Office Websites

6/12. The Department of Justice's (DOJ) Antitrust Division filed its Competitive Impact Statement (CIS) with the U.S. District Court (NDIll) in USA v. National Association of Realtors, D.C. No. 05 C 5140.

The parties settled this antitrust case on May 27, 2008, with a Stipulation and proposed final judgment (PFJ). However, the Antitrust Procedures and Penalties Act (APPA) requires the filing of this CIS, and court approval, for the PFJ to become effective.

Complaint. The DOJ initiated this proceeding by filing a complaint on September 8, 2005 against the National Association of Realtors (NAR) alleging violation of federal antitrust laws in connection with its obstruction of real estate brokers who use internet tools to offer services to consumers.

The DOJ filed an amended complaint on October 4, 2005. It alleged that "The brokers against whom the policies discriminate operate secure, password-protected Internet sites that enable the brokers' customers to search for and receive real estate listings over the Internet. These websites thus replace or augment the traditional practice by which the broker conducts a search of properties for sale and then provides information to the customer by hand, mail, fax, or e-mail. Since these websites were first developed in the late 1990s, brokers' use of the Internet in connection with their delivery of brokerage services has become an important competitive alternative to traditional ``brick-and-mortar´´ business models."

It continued that the NAR adopted a policy pertaining to "virtual office websites", or VOWs, limiting new competition in violation of Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1.

It further alleged that the NAR's initial VOW policy, and another adopted in response to this action (its "Internet Listings Display Policy", or ILD), "permit brokers to withhold their clients' listings from VOW operators by means of an ``opt-out´´ right. In essence, the policies allow traditional brokers to block the customers of web-based competitors from using the Internet to review the same set of MLS listings that the traditional brokers provide to their customers."

See also, story titled "DOJ Sues National Association of Realtors for Obstructing Internet Based Brokers" in TLJ Daily E-Mail Alert No. 1,210, September 9, 2005; "GAO Reports on Real Estate Brokers and Use of the Internet" in TLJ Daily E-Mail Alert No. 1,224, September 29, 2005; and "DOJ Amends Complaint Against Realtors" in TLJ Daily E-Mail Alert No. 1,228, October 6, 2005.

Settlement. The DOJ and NAR reached a settlement on May 27, 2008.

The PFJ provides that the NAR admits no liability or wrongdoing. The PFJ contains no fine or other financial penalty.

It further provides that the DOJ "does not allege that Defendant's Internet Data Exchange (IDX) Policy in its current form violates the antitrust laws".

The PFJ requires the NAR to repeal its VOW policy, as modified by its ILD policy. Then, "Within five business days after entry of this Final Judgment, NAR shall adopt the Modified VOW Policy".

The NAR stated in a release that the proposed judgment "validates NAR's longstanding Internet Data Exchange (IDX) policy and strengthens the rule governing participation in multiple listing services".

Richard Gaylor, head of the NAR, stated that "This is clearly a win-win for the real estate industry and the consumers we serve ... Today I can say with the clear knowledge, reinforced and underscored by DOJ’s settlement compromise, that the real estate industry is dynamic, entrepreneurial and fiercely competitive. Thanks to Realtors®, consumers can access detailed information about millions of properties for sale across the country."

Summary of New Policy. The NAR stated in its release that the NAR "will be reinstating an updated version of its Virtual Office Web site policy. ... The revised policy continues to protect the rights of sellers who do not want their property or their property’s address displayed on the Internet. The new policy also protects sellers from having false or other unwanted information about their listings appear on the VOW of an MLS member."

The DOJ's CIS offers a detailed summary of the new policy mandated by the PFJ. It states that the PFJ "embodies the fundamental principle that an association of competing brokers, operating an MLS, cannot use the aggregated power of the MLS to discriminate against a particular method of competition (in this case, VOWs)." (Parentheses in original.)

The CIS continues that the PFJ "will end the competitive harm resulting from NAR's Challenged Policies and will allow consumers to benefit from the enhanced competition that VOW brokers can provide. The proposed Final Judgment requires NAR to repeal its VOW and ILD Policies and to replace them with a "Modified VOW Policy" ... that makes it clear that brokers can operate VOWs without interference from their rivals. (Footnotes omitted.)

The CIS also states that the new policy "does not allow brokers to opt out and withhold their clients' listings from VOW brokers. This change eliminates entirely the most egregious impediment to VOWs that was contained in the Challenged Policies. Under the Modified VOW Policy, the MLS must provide to a VOW broker for display on the VOW all MLS listings information that brokers are permitted to provide to customers by all other methods of delivery." (Footnotes omitted.)

The CIS also states that the new policy "permits brokers to operate referral VOWs. It expressly prohibits MLSs from impeding VOW brokers from referring customers to other brokers for compensation." (Footnote omitted.)

The CIS also states that the new policy "prohibits MLSs from using an inferior data delivery method to provide MLS listings to VOW brokers and from unreasonably restricting the advertising and co-branding relationships VOW brokers establish with third parties. VOW brokers, under the Modified VOW Policy, will be free from MLS interference in the appearance and features of their VOWs." (Footnotes omitted.)

FCC Holds Hearing on Early Termination Fees

6/12. The Federal Communications Commission (FCC) held a hearing titled "Early Termination Fees".

FCC Chairman Kevin Martin wrote in his prepared statement [PDF] that "When a consumer ends a contract with wireless carrier, he is typically charged a fee ranging from $150 to $225."

The CTIA, which represents wireless carriers, filed a petition for declaratory ruling in March of 2005 with the FCC arguing that early termination fees (ETFs) are rates charged, and that the FCC should therefore preempt states in this area. See also, prepared testimony [PDF] of the CTIA's Christopher Guttman-McCabe.

47 U.S.C. § 332(c)(3)(A) provides that "no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services."

Martin stated that "I believe early termination fees can be a legitimate means of recovering legitimate costs. But they shouldn’t be abused." He also stated that "I am skeptical that plaintiff class action lawsuits are the most effective way to guarantee these protections. First, not all consumers even benefit from such plaintiff lawsuits. And I do not believe a patchwork of 50 different sets of regulations with widely varying protections benefits consumers or the industry."

He said that "If we take jurisdiction", then FCC rules should provide the following: first, the ETF "should be reasonably related to the cost of the equipment the consumer receives"; second, the ETF "should be prorated over the life of the contract"; third, "Any contract for service should be for a reasonable length of time"; fourth, an ETF should not be extended when a consumer renews a contract without receiving new equipment; and fifth, "consumers should be able to take the phone home and receive their first bill to make sure the service and bill are consistent with what they expected, before an early termination fee kicks in".

See also, prepared statement [PDF] of Commission Michael Copps, prepared statement [PDF] of Commissioner Jonathan Adelstein, prepared statement [PDF] of Commissioner Deborah Tate, and prepared statement [PDF] of Commissioner Robert McDowell.

See also, S 2033 [LOC | WW], the "Cell Phone Consumer Empowerment Act of 2007", introduced on September 7, 2007, by Sen. Amy Klobuchar (D-MO) and Sen. Jay Rockefeller (D-WV).

More FCC News

6/12. The Federal Communications Commission (FCC) released the text [81 pages in PDF] of its Report and Order and Notice of Proposed Rulemaking in its proceeding titled "In the Matter of Development of Nationwide Broadband Data to Evaluate Reasonable and Timely Deployment of Advanced Services to All Americans, Improvement of Wireless Broadband Subscribership Data, and Development of Data on Interconnected Voice over Internet Protocol (VoIP) Subscribership". The FCC adopted, but did not release, this item on March 19, 2008. See, story titled "FCC Adopts Order Regarding Broadband Data Collection" in TLJ Daily E-Mail Alert No. 1,734, March 20, 2008. This item is FCC 08-89 in WC Docket No. 07-38. Also on June 12, the FCC released an Order on Reconsider [27 pages in PDF] in this proceeding that revises the reporting requirements of Form 477. This item is FCC 08-148 in WC Docket No. 07-38.

6/12. The Federal Communications Commission (FCC) released the text [76 pages in PDF] of its a Fifth Report regarding the "availability of advanced telecommunications capability to all Americans". These reports are required by Section 706 of the Telecommunications Act of 1996. The FCC adopted, but did not release, this report on March 19, 2008. See, story titled "FCC Report Concludes Broadband Services Are Being Deployed in a Reasonable and Timely Fashion" in TLJ Daily E-Mail Alert No. 1,734, March 20, 2008. This item is FCC 08-88 in GN Docket No. 07-45.

People and Appointments

6/12. President Bush nominated Matthew Petersen to be a member of the Federal Election Commission (FEC) for a term expiring April 30, 2011. See, White House release. This nomination is for the seat previously held by Hans von Spakovsky pursuant to a recess appointment. The FEC has statutory authority to regulate federal election contributions and expenditures. It has construed this to engage in limited regulation of online speech regarding federal candidates and elections.

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6/12. Chris Cox, Chairman of the Securities and Exchange Commission (SEC), gave a speech titled "Disclosure from the User's Perspective". He discussed, among other topics, interactive data (online XBRL tagged financial information). He reviewed recently adopted rules, pending rulemaking proceeding, and predicted some further SEC actions. For example, he said that "I expect we will also address, yet this summer, a CIFiR proposal for new guidance on the use of corporate websites". CIFiR is the SEC's Advisory Committee on Improvements to Financial Reporting.

6/12. The U.S. District Court (EDVa) sentenced Ingrid Dina Levy to serve 46 months in prison, and to pay restitution of $168,300.07, following her conviction in February of 2008 on three counts of mail fraud and four counts of wire fraud, in connection with her sale of merchandise over the internet which she did not deliver to the purchasers. The U.S. Attorneys Office for the Eastern District of Virginia stated in a release that Levy, "through an array of online fashion clothing businesses, defrauded more than 80 customers of more than $160,000 from 2004 through 2006". It added that "used fictitious names and business addresses to make it appear she was a large, legitimate, and authorized retailer".

9th Circuit Rules on Availability of Statutory Damages for Copyright Infringement

6/11. The U.S. Court of Appeals (9thCir) issued its opinion [11 pages in PDF] in Derek Andrews v. Poof Apparel, a case regarding remedies available for trademark and copyright infringement.

Introduction. This case involves intellectual property rights in women's clothing. Derek Andrews, Inc. makes expensive women's clothes. Poof Apparel Corporation makes inexpensive women's clothes. Poof infringed Andrews' copyright and trademarks in tags attached to articles of clothing. Andrews prevailed in the District Court on both copyright and trademark claims, and was awarded statutory damages on the copyright claim, and disgorgement of profits on the trademark claim. It also won an award of attorneys fees.

The Court of Appeals reversed the judgment as to the copyright claim. Poof made infringing articles both before and after the effective date of Andrews' copyright registration. The Copyright Act does not allow the copyright holder to recover statutory damages or attorneys fees when the infringement "commenced ... before the effective date of its registration, unless such registration is made within three months after the first publication of the work".

The Court of Appeals held that the word "commenced" refers only to the first act of infringement in a continuing series of acts of infringement. Hence, it reversed the award of statutory damages, and held that Andrews is not entitled to any attorneys fees related to the copyright claim.

This case underscores the importance of prompt copyright registration for creators who hope to be able to enforce their copyrights.

This opinion does not affect a copyright holder's ability to recover actual damages.

Background. This case concerns Andrews' line of clothing titled "Twisted Heart". Andrew’s "Heart Design" mark was first used in commerce on August 11, 2003, and is the subject of U.S. Trademark Registration No. 3202995, filed on April 6, 2005. Andrews' "Twisted Heart" word mark has been used in commerce since August 11, 2003, and is the subject of U.S. Trademark Registration No. 2930606, filed on July 14, 2003.

Andrews also registered a copyright in the artwork and configuration of the tag with the U.S. Copyright Office. This registration became effective on June 15, 2005.

Andrews puts tags on these clothing items that contain the "Twisted Heart" trademark.

Poof manufactured clothes and attached to them tags that the Court of Appeals described as "nearly identical" to Andrews' "Twisted Heart" tags. Andrews learned of this, and sent a cease and desist letter in May of 2005 -- before the effective date of the copyright registration. But, Poof continued to make and distribute infringing items.

District Court. Andrews then filed a complaint in U.S. District Court (WDWash) against Poof alleging copyright and trademark infringement, and state law claims.

Poof did not file a timely answer to the complaint. Default was entered on August 8, 2005. However, Poof did defend in the remedies phase of the District Court proceeding.

Following a bench trial in December of 2006 the District Court concluded, as to the Lanham Act and state law claims, that disgorgement of profits was the appropriate measure of damages, and awarded Andrew $685,307.70. On the copyright claim, the District Court awarded Andrews $15,000 in statutory damages under the Copyright Act. The District Court also awarded Andrews $296,090.50 in attorneys' fees and $6,678.60 in costs. The District Court did not apportion the awards of attorneys fees and costs between the copyright and Lanham Act claims.

Statutes. 17 U.S.C. § 504 provides, among other things, for recovery of statutory damages for infringement. It provides that "... an infringer of copyright is liable for either ... the copyright owner’s actual damages and any additional profits of the infringer ... or ... statutory damages ..." Section 504 then provides that statutory damages are "in a sum of not less than $750 or more than $30,000 as the court considers just".

17 U.S.C. § 505 provides for recovery of attorneys fees and costs. It provides, in full, that "In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs."

17 U.S.C. § 412 then limits the circumstances under which statutory damages can be recovered. It provides, in part, that "no award of statutory damages or of attorney’s fees, as provided by sections 504 and 505, shall be made for ... any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work".

The issue of statutory interpretation is this. Since Section 412 precludes the award of statutory damages for "any infringement of copyright commenced after first publication of the work and before the effective date of its registration", and Poof's infringement occurred both before and after the effective date of the copyright registration, could the District Court award statutory damages on the interpretation that Poof's continuing infringement "commenced" after the copyright registration?

Court of Appeals. Poof brought the present appeal. In the just released opinion for publication, the Court of Appeals reversed and remanded to the District Court on the copyright and attorneys fees issues. The Court of Appeals rejected all other appeal issues in a not for publication memorandum disposition.

The Court of Appeals wrote that Section 412 "leaves no room for discretion". It "mandates that, in order to recover statutory damages, the copyrighted work must have been registered prior to commencement of the infringement, unless the registration is made within three months after first publication of the work".

Moreover, it held that Poof's continuing to make and sell infringing articles after the effective date of the copyright registration were not "commenced" within the meaning of Section 412.

The Court of Appeals reached this conclusion in part on the basis that other courts have so interpreted Section 412. It noted that every court to consider the issue has held that infringement commences for the purposes of § 412 when the first act in a series of acts constituting continuing infringement occurs. Hence, it held that "the first act of infringement in a series of ongoing infringements of the same kind marks the commencement of one continuing infringement under § 412."

The Court of Appeals also reached this conclusion in part on the basis that it "furthers Congress’ intent to promote the early registration of copyrights."

The Court of Appeals thus reversed the award of statutory damages of copyright infringement.

The Court of Appeals then held that, for the same reason, Andrews is not entitled to an award of attorneys fees as to its copyright claim. However, the Court of Appeals continued, the District Court did not apportion the award of attorneys fees between the copyright claim (for which Andrews is not entitled to attorneys fees) and the Lanham Act claim (for which Andrews is entitled to attorneys fees). The Court of Appeals therefore remanded to the District Court "with instructions to apportion the fees award in light of our determination that Andrew is not entitled to attorneys’ fees under the Copyright Act."

This case is Derek Andrews, Inc. v. Poof Apparel Corporation, U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 07-35048, an appeal from the U.S. District Court for the Western District of Washington, D.C. No. CV-05-01136-JPD, Magistrate Judge James Donohue presiding. Judge Otis Wright, sitting by designation, wrote the opinion of the Court of Appeals, in which Judges Susan Graber and Johnnie Rawlinson joined.

People and Appointments

6/11. President Bush announced that he will give a Presidential Medal of Freedom to Judge Laurence Silberman. A White House release states that Silberman "has devoted his life to promoting, enforcing, and defending the rule of law. He has been a stalwart guardian of the Constitution, and his work to strengthen our national security institutions has made Americans safer." Silberman is a senior status judge of the U.S. Court of Appeals (DCCir), and has served on the Foreign Intelligence Surveillance Court of Review (FISCOR).

6/11. The Senate Commerce Committee (SCC) issued a release that announces new staff appointments.

6/11. Donald Shepard was elected Chairman of the Board of Directors of the U.S. Chamber of Commerce. See, release.

6/11. Chris Hassell was named Federal Bureau of Investigation (FBI) Laboratory Director. He previously worked at the Oklahoma State University Multispectral Laboratories (UML). He replaces Joseph DiZinno, who retired. See, FBI release.

More News

6/11. Donald Kohn, Vice Chairman of the Federal Reserve Board (FRB), gave a speech in Chatham, Massachusetts, in which he discussed the Phillips curve, inflation, and information technology. Kohn assumed that his listeners and reading are familiar with the economic literature on the Phillips curve. Basically, it charts, in two dimensions, an inverse relationship between changes in money wages and the unemployment rate. That is, higher rates of unemployment are associated with lower inflation. There is a trade off between maintaining price stability and maximizing unemployment. Kohn said that the "Phillips curve tradition remains at the core of how most academic researchers and policymakers -- including this one -- think about fluctuations in inflation". Kohn spoke in great detail about how monetary policy should respond to commodity price shocks, such as large increases in the price of oil. However, his speech might also be significant from an information technology (IT) standpoint because, in a footnote, he addressed recent IT price drops and inflation. He wrote that "An example of a change in the trend of other consumer prices could be seen in the relative prices of computers and other high-technology goods and services in the second half of the 1990s, which declined at an unexpectedly rapid rate as productivity accelerated. This shock placed downward pressure on inflation and raised both employment and the equilibrium real wage. In the presence of nominal price and wage rigidities, an efficient policy response would facilitate the rise in the real wage by allowing some downward drift in price inflation and upward drift in employment and wage inflation, which is, in fact, about the result observed over this period."

6/11. The Federal Communications Commission (FCC) adopted, but did not release, a Report and Order and Further Notice of Proposed Rulemaking regarding Video Relay Service (VRS) and Internet Protocol (IP) Relay. The FCC wrote in a release describing this item that the order portion of this item "adopts a system for assigning traditional ten-digit telephone numbers to Internet-based TRS users. This means that Internet-based TRS users will be able to reach and be reached by both hearing users of the traditional telephone network and other Internet-based TRS users by doing something most Americans take for granted -- dialing a ten-digit phone number. Internet-based TRS users will also be able to port their numbers from one provider to another, and users will be able to use any Internet-based TRS provider they choose." The release adds that the order "requires providers to obtain and maintain the physical location of their users -- the same obligation the Commission has imposed on interconnected voice over IP providers -- and to automatically route emergency calls from Internet-based TRS users to the appropriate emergency services authorities using such information." This item is FCC 08-151 in CG Docket No. 03-123 and WC Docket No. 05-196.

6/11. The Federal Communications Commission (FCC) adopted, but did not release, a Notice of Proposed Rulemaking (NPRM) regarding changes to the telecommunications relay service (TRS) regulations applicable to Speech-to-Speech relay services (STS). This NPRM is FCC 08-149 in CG Docket No. 03-123 and CG Docket No. 08-15. See, FCC release describing this NPRM.

Go to News from June 6-10, 2008.