TLJ News from March 26-31, 2011


Public Knowledge Releases Further Proposals for Changes to Copyright Law

3/31. The Public Knowledge released three more papers in a series that propose changes to copyright law. The PK has named its proposed changes the "Copyright Reform Act". These three papers address the Section 512 notice and take down process, incidental copies, and digital music licensing.

The just released items are:

Previously, the PK released the following items:

NTIA Releases Annual Report on 1710 -- 1755 Spectrum Band

3/31. The National Telecommunications and Information Administration (NTIA) released a report [30 pages in PDF] titled "Relocation of Federal Radio Systems from the 1710 -- 1755 Spectrum Band: Fourth Annual Progress Report".

In September 2006, the FCC conducted the first auction of licenses for advanced wireless services (AWS) in the 1710-1755 MHz band, paired with the 2110-2155 MHz band. See, story titled "FCC Completes First Advanced Wireless Services Spectrum Auction" in TLJ Daily E-Mail Alert No. 1,454, September 21, 2006.

In August 2008, the FCC held a second auction of licenses that were not sold in the first auction.

The just released report states that "A vast majority of Federal agencies report that they are meeting their original relocation timeframe and cost estimates. For example, a total of 146 systems (approximately 81 percent of the total systems) have relocated from the 1710-1755 MHz band. In addition, all Federal agencies’ systems that had relocation timeframes of 36 months or less have relocated. Seven out of the twelve agencies (Department of Treasury, Department of Homeland Security, United States Postal Service, Department of Housing and Urban Development, Department of Justice, National Aeronautics and Space Administration, Department of Transportation/ Federal Aviation Administration) have vacated the band entirely." (Parentheses in original. Footnote omitted.)

Also, "During this reporting period three Federal agencies requested and were denied additional time by NTIA and OMB to relocate specific systems out of the band."

The report also states that the "NTIA expects the five remaining agencies to complete their relocation from the 1710-1755 MHz band by April 2013. Specifically, the Department of Defense, Tennessee Valley Authority, United States Department of Agriculture, and most of the Department of Energy systems will relocate by April 2011. The remaining Department of Energy systems will relocate by April 2013. The Department of Interior will complete its relocation effort by April 2013."

Complaint Seeks Injunction of Facebook Intifada Web Page

3/31. Larry Klayman, head of Freedom Watch, filed a pro se complaint [PDF] in the Superior Court of the District of Columbia Civil Division against Mark Zuckerberg and Facebook, Inc., alleging assault and negligence, in connection with the operation of the Facebook web site, in which users have created, and published statements in, a web page titled "Third Palestinian Intifada".

It is an inartfully drafted complaint that bears more attributes of a political polemic directed at public opinion, than a legal pleading directed to a court of law.

Klayman alleges that this Facebook web page "calls ... for an uprising beginning on May 15, 2011".

The complaint further states that the government of Israel asked Facebook to remove the web page, but that it refused.

Klayman's complaint does not plead violation of any federal or District of Columbia civil rights statute. Rather, it alleges assault and negligence.

The assault count alleges that the Facebook web page at issue "and other related and similar sites, amount to a threat of the use of force against non-Muslims, and particularly Jews, who are public figures like Plaintiff". It further alleges that "Defendants ... have ... assaulted Plaintiff ...".

The negligence count alleges that "Defendants owed Plaintiff a duty of care, which they violated and breached by allowing and furthering the death threats by the Third Palestinian Intifada, and related and similar sites." The complaint does not plead any injury to the plaintiff.

Klayman requests that the Court "enjoin Defendants from allowing the Facebook page titled ``Third Palestinian Intifada,´´ and other related and similar sites, which advocate violence and death to Jews, like Plaintiff and others, from operating on, now and in the future."

He also asks for "One Billion Dollars".

Klayman is also the head of Judicial Watch.

Section 230 Immunity. Facebook may assert that it possesses immunity from liability for the statements of its users.

47 U.S.C. § 230 provides that "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."

47 U.S.C. § 230(f)(2) provides that "The term ``interactive computer service´´ means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions."

Perhaps it should be noted that on March 24, 2004, the U.S. Court of Appeals (4thCir) issued its opinion [2 pages in PDF] in Noah v. AOL, affirming the District Court's opinion that Section 230 immunized AOL when it provided chat rooms in which subscribers mocked Islamic religious beliefs. See also, story titled "4th Circuit Affirms That Section 230 Immunity Extends to Federal Civil Rights Action" in TLJ Daily E-Mail Alert No. 863, March 25, 2004.

Other Defenses. The complaint does not allege that the plaintiff is a resident of, or present in, Israel. Nor does the complaint allege that the web page is directed to him. Hence, Facebook may also assert that Klayman lacks standing to bring this action.

In addition, Facebook may assert, with respect to the request of injunctive relief, that Klayman has not shown likelihood of irreparable harm to himself.

Also, the complaint contains no allegations that would support imposition of liability upon Zuckerberg individually for the actions of the corporation.

Judicial Appointments

3/31. President Obama nominated Alison Nathan to be a Judge of the U.S. District Court for the Southern District of New York. See, White House news office release and release. She currently works for the Office of the Attorney General of the State of New York. Before that she worked in the Special Assistant to President Obama and Associate White House Counsel. She has also worked for the law firm of Wilmer Hale.

3/31. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over the nomination of Goodwin Liu to be a Judge of the U.S. Court of Appeals for the 9th Circuit.

3/31. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved the nomination of John McConnell to be a Judge of the U.S. District Court for the District of Rhode Island, on a vote of 11-7. McConnell faces pay for play allegations. That is, he is both a major contributor to political campaigns, and has represented state attorneys general in huge tort cases under no bid contingency fee contracts. Sen. Charles Grassley (R-IA), the ranking Republican on the SJC, stated that McConnell is "an active partisan" who, along with his family, has donated over $700,000 to Democrats. He added that McConnell is "steeped in political activity", has asserted unfounded legal theories in "mass tort litigation", and has lacked candor in communications with the SJC. See also, story titled "More People and Appointments" in TLJ Daily E-Mail Alert No. 2,098, June 21, 2010.

3/31. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved by unanimous consent the nominations of Kevin Sharp (USDC/MDTenn), Roy Dalton (USDC/MDFl), and Claire Cecchi USDC/DNJ),

3/31. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over the nominations of Esther Salas (USDC/DNJ), Paul Oetken (USDC/SDNY), and Paul Engelmayer (USDC/SDNY).

More News

3/31. The Federal Communications Commission (FCC) released an agenda for its April 7, 2011, event titled "open meeting". This agenda contains the same six items listed on its tentative agenda released on March 17, 2011. See, story titled "FCC Releases Tentative Agenda for April 7 Meeting" in TLJ Daily E-Mail Alert No. 2,207, March 23, 2011. The FCC is scheduled to adopt an order on pole attachments, a report and order on data roaming, a notice of inquiry on access to government rights of way and wireless facility siting requirements, and other items.

3/31. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) signed an signed an antitrust cooperation agreement with the nation of Chile's antitrust regulatory agency, Office of the National Economic Prosecutor. The DOJ stated in a release that this "agreement contains provisions for antitrust enforcement cooperation and coordination, conflict avoidance and consultations with respect to enforcement actions, and technical cooperation and is subject to effective confidentiality protections".

3/31. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over consideration of S 410 [LOC | WW], the "Sunshine in the Courtroom Act".

OUSTR Release Annual Report of Foreign Barriers to Trade

3/30. The Office of the U.S. Trade Representative (OUSTR) released a report [391 pages in PDF] titled "2011 National Trade Estimate: Report on Foreign Trade Barriers".

This report is "the twenty-sixth in an annual series that surveys significant foreign barriers to U.S. exports". It summarizes "foreign barriers affecting U.S. exports of goods and services, foreign direct investment by U.S. persons, and protection of intellectual property rights".

However, it does not address barriers imposed by the U.S. government to exports from the U.S. Nor does it address barriers imposed by the U.S. government to imports into the U.S. from other countries.

PRC. This report's section on the People's Republic of China (PRC) is 35 pages.

The report states that "China has continued to restrict the importation (and distribution) of copyright-intensive products such as books, newspapers, journals, theatrical films, DVDs and music, in contravention of its trading rights (and distribution services) commitments, leading the United States to mount a successful WTO challenge to these policies. China has agreed to remove these restrictions by March 2011 in order to comply with the WTO ruling against it. The United States will closely monitor China’s implementation of this ruling." (Parentheses in original.)

See, story titled "WTO Panel Rules in PRC IPR Case" in TLJ Daily E-Mail Alert No. 1,889, February 2, 2009, and story titled "US to Complain to WTO Regarding PR China's Failure to Protect IPR" in TLJ Daily E-Mail Alert No. 1,562, April 9, 2007.

With respect to intellectual property rights (IPR), the report states that "Persistent inadequacies in the protection and enforcement of IPR represent barriers to U.S. exports and investment. Key concerns listed in the report included unacceptable levels of retail and wholesale counterfeiting, as well as persistently high-levels of book and journal piracy, end-user piracy of business software and copyright piracy over the Internet."

It adds that "weaknesses in China’s enforcement system -- criminal, civil and administrative -- contribute to China’s poor IPR enforcement record. There are also a number of other obstacles to effective enforcement. High value and volume thresholds must be met in order to initiate criminal prosecution of IPR infringement. U.S. trademark and copyright industries also report that administrative fines are too low, and imposed too infrequently, to be a deterrent. Consequently, infringers view administrative seizures and fines merely as a cost of doing business. Civil damages for infringement are likewise inadequate."

The report also restates U.S. concerns about the PRC's indigenous innovation policies. It states that "a troubling trend that emerged more conspicuously in 2009, and continued in 2010, was China’s willingness to encourage domestic or “indigenous” innovation at the cost of foreign innovation and technologies. One example, discussed below in the Government Procurement section, involves the Circular Launching the 2009 National Indigenous Innovation Product Accreditation Work, which aimed to improve ``indigenous´´ innovation in computer and other technology equipment by imposing qualifying criteria for government procurement preferences such as the ownership or development of a product’s intellectual property in China." See also, story titled "U.S. Tech Groups Complain About PRC's Use of Domestic IP as Trade Barrier" in TLJ Daily E-Mail Alert No. 2,040, February 2, 2010.

The report also summarizes the status of U.S. WTO action against the PRC regarding electronic payment services. It states that the U.S. "requested WTO consultations in September 2010 over China’s various restrictions on foreign suppliers of electronic payment services. Consultations were held in October 2010, but those consultations did not resolve the dispute. In February 2011, the United States requested the establishment of a dispute settlement panel to hear the case."

Taiwan. In contrast, the section [7 pages in PDF] of the report on Taiwan states that "Taiwan generally provides strong IPR protection and enforcement." However, it adds that "rights holders continue to express concern regarding: infringement of copyrighted material on the Internet; illegal textbook copying on and around university campuses; inadequate protection for the packaging, configuration, and outward appearance of products (trade dress); and the continued availability of counterfeit pharmaceuticals in Taiwan. The importation and transshipment of counterfeit products from China is also a problem, as well as the collusion of some Taiwan companies in supplying components to mainland factories producing ``Shanzhai´´ counterfeits (e.g. mobile phones, netbooks, and other electronic devices). Taiwan also needs to provide an effective system to address patent issues expeditiously in connection with applications to market pharmaceutical products." (Parentheses in original.)

The report continues that "Piracy on the Internet remains a serious IP enforcement concern in Taiwan. In April 2009, the Legislative Yuan amended the Taiwan Copyright Law to require Internet service providers (ISP) to undertake specific and effective notice-and-takedown actions against online infringers to avoid liability for the infringing activities of users on their networks. Rights holders expect to reach agreement on a ``code of conduct´´ with ISP operators for implementation of the new ISP law regulation."

"In January 2010, the Legislative Yuan passed an amendment to the Copyright Collective Management Organization Act and an amendment to article 37 of the Copyright Law. Copyright collection groups complained that both amendments, which require a single portal and a joint tariff rate for fee collection, and exempt secondary public broadcasting users from criminal liability, weaken copyright owners' ability to collect remuneration for the use of their works."

Japan. The section [18 pages in PDF] of the report on Japan states that "Japan generally provides strong IPR protection and enforcement".

It also notes that "Japan is also an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist parties in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy." See also, stories titled "ACTA Draft Released", "Summary of ACTA", and "Reaction to ACTA" in TLJ Daily E-Mail Alert No. 2.140, October 11, 2010.

The report states that U.S. "continues to urge reforms in the financial sector, including in the areas of online financial services".

It also states that in telecommunications, the U.S. "continues to urge Japan to: ensure fair market opportunities for emerging technologies and business models; ensure a regulatory framework appropriate for addressing converged and Internet-enabled services; and strengthen competitive safeguards on dominant carriers". The report elaborates on fixed line interconnection, dominant carrier regulation, universal service cross subsidies, mobile termination, and wireless licenses.

OUSTR Reports on RPC's Rare Earths Export Restraints

3/30. The Office of the U.S. Trade Representative (OUSTR) released a report [391 pages in PDF] titled "2011 National Trade Estimate: Report on Foreign Trade Barriers". The section [35 pages in PDF] on the People's Republic of China (PRC) addresses rare earth materials (REM).

Rare earth elements, such as Neodymium, are used to make permanent magnets, which are used in computer hard drives and other tech products.

The OUSTR stated in a December 23, 2010, report [124 pages in PDF] titled "2010 Report to Congress On China's WTO Compliance" that the OUSTR is considering filing a complaint with the World Trade Organization (WTO) alleging that the PRC's restrictions on the export of REMs violates its WTO obligations. See, story titled "OUSTR Is Considering Filing WTO Complaint Against PRC For Its Rare Earths Export Restraints" in TLJ Daily E-Mail Alert No. 2,189, December 29, 2010.

The just released report, which restates verbatim much of the language on REMs from the December 23, 2010, report, states that "China has continued to impose restraints on exports of raw materials", including "rare earths".

The March 30 report states that "These types of export restraints can significantly distort trade, and for that reason WTO rules normally outlaw them. In the case of China, the trade-distortive impact is exacerbated because, for many of the raw materials at issue, China is the world’s leading producer."

Also, "China's export restraints affect U.S. and other foreign producers of a wide range of downstream products, such as  ... hard-disc drives, magnets, lasers, ... semiconductor chips, ... fiber optic cables ... among numerous others."

The report states that "The export restraints can create serious disadvantages for these foreign producers by artificially increasing China's export prices for the raw material inputs, which also drives up world prices. At the same time, the export restraints can artificially lower China's domestic prices for the raw materials due to significant increases in domestic supply, enabling China’s domestic producers of downstream products to produce lower-priced products from the raw materials and thereby creating significant advantages for China’s domestic downstream producers when competing against foreign producers of these products both in the China market and in other countries' markets. The export restraints can also create incentives for foreign downstream producers to move their operations and technologies to China."

MPAA Writes Congress Regarding Domain Name Seizures

3/30. The Motion Picture Association of America (MPAA) sent a letter to Senators and Representatives regarding the Department of Homeland Security's (DHS) Immigration and Customs Enforcement's (ICE) seizure of web site domains of "illegal for-profit businesses knowingly trafficking in stolen and counterfeit goods".

The MPAA wrote that "The websites targeted by ICE -- via a transparent process that requires a judicial finding of probable cause -- are not ``innocent´´ Internet users". Rather, they are harming the movie industry, consumers, and the U.S. economy.

The MPAA stated that it supports "addition resources" for intellectual property enforcement.

The DHS/ICE has named its domain name seizure activities "Operation In Our Sites". See, the DHS/ICE release of June 30, 2010, describing the seizure of domain names. See also, story titled "DOJ and DHS Seize Domain Names of Web Sites Engaged in Infringing Sales" in TLJ Daily E-Mail Alert No. 2,167, December 3, 2010.

Late in the 111th Congress, Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), introduced a bill regarding Department of Justice (DOJ) seizure of domain names of web sites dedicated to infringement. That bill has not yet been introduced in the House or Senate in the 112th Congress.

See, S 3804 [LOC | WW], the "Combating Online Infringement and Counterfeits Act", or "COICA", introduced on September 20, 2010. See also, story titled Senators Introduce Bill to Enable DOJ to Shut Down Web Sites Dedicated to Infringement", "Bill Summary: Combating Online Infringement and Counterfeits Act", and "Commentary: Combating Online Infringement and Counterfeits Act" in TLJ Daily E-Mail Alert No. 2,132, September 21, 2010.

Microsoft Complains to EC Antitrust Regulators About Google

3/30. Microsoft announced the filing of "a formal complaint with the European Commission as part of the Commission's ongoing investigation into whether Google has violated European competition law". The complaint pertains to search.

Microsoft did not release its filings with the European Commission (EC). Nor did the EC.

However, Brad Smith, SVP and General Counsel of Microsoft, stated in a release that "were concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative".

Brad SmithSmith (at right) wrote that "Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly.  This is the first time Microsoft Corporation has ever taken this step."

He also stated that "Over the past year, a growing number of advertisers, publishers, and consumers have expressed to us their concerns about the search market in Europe. They've urged us to share our knowledge of the search market with competition officials."

See, full story.

House Subcommittee Holds Hearing on NSL Authority

3/30. The House Judiciary Committee's (HJC) Subcommittee on Crime, Terrorism and Homeland Security held a hearing titled "The Permanent Provisions of the PATRIOT Act".

The hearing centered on National Security Letter (NSL) authority, which empowers the FBI, for example, to compel phone companies and internet service providers to turn over records without seeking prior judicial approval.

Republican members of the Subcommittee defended the Department of Justice (DOJ) and its Federal Bureau of Investigation (FBI), and their use of NSL authority. Rep. Trey Gowdy (R-SC) badgered the ACLU witness. Democrats criticized or questioned the FBI's use of NSL authority.

As is the case for most hearings on surveillance issues, the Subcommittee gained only  limited information, because it heard from government witnesses, but not from representatives of service providers, law professors with expertise in this area, or people targeted by electronic surveillance.

See, full story.

FTC Issues and Settles Complaint Against Google

3/30. The Federal Trade Commission (FTC) issued an administrative complaint [8 pages in PDF] against Google alleging that it violated FTC Act, and the US-EU Safe Harbor Framework, in connection with the initial launch of its Buzz social networking service.

The FTC and Google simultaneously entered into an Agreement Containing Consent Order [9 pages in PDF] which mandates a comprehensive privacy program for Google, and other things. However, it imposes no fine or other payment.

In addition, Google admits no wrongdoing, no violation of law, and no facts, except with respect to the jurisdiction of the FTC.

The FTC has a long history of brining enforcement actions under the FTC Act when web site operators publish privacy policies, and then violate those privacy policies. However, this action against Google is the first in which the FTC has charged violation of the US-EU Safe Harbor Framework for such conduct.

Neither the complaint, agreement, nor Analysis of Proposed Consent Order to Aid Public Comment Section identify the section of the FTC Act alleged to have been violated. However, in prior similar actions the FTC has cited Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45. It merely provides that "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful".

Jonathan Liebowitz, Chairman of the FTC, stated in a release that "When companies make privacy pledges, they need to honor them".

The FTC stated that "Although Google led Gmail users to believe that they could choose whether or not they wanted to join the network, the options for declining or leaving the social network were ineffective. For users who joined the Buzz network, the controls for limiting the sharing of their personal information were confusing and difficult to find, the agency alleged."

The complaint alleges that "Google Buzz is a platform that allows users to share updates, comments, photos, videos, and other information through posts or ``buzzes´´ made either publicly or privately to individuals or groups of users. Google used the information of consumers who signed up for Gmail, including first and last name and email contacts, to populate the social network. Without prior notice or the opportunity to consent, Gmail users were, in many instances, automatically set up with ``followers´´ (people following the user). In addition, after enrolling in Buzz, Gmail users were automatically set up to ``follow´´ other users." (Parentheses and internal quotations in original.)

It continues that "The setup process for Gmail users who enrolled in Buzz did not adequately communicate that certain previously private information would be shared publicly by default. Further, the controls that would allow the user to change the defaults were confusing and difficult to find." Also, "Certain personal information of Gmail users was shared without consumers’ permission through the Google Buzz social network."

Google launched Buzz on February 9, 2010. The Electronic Privacy Information Center (EPIC) filed a complaint with the FTC against Google on February 16, 2010, and an amended complaint on March 2, 2010.

Google's Alma Whitten stated in a release on March 30 that "The launch of Google Buzz fell short of our usual standards for transparency and user control -- letting our users and Google down. While we worked quickly to make improvements, regulators -- including the U.S. Federal Trade Commission -- unsurprisingly wanted more detail about what went wrong and how we could prevent it from happening again. Today, we’ve reached an agreement with the FTC to address their concerns."

Sen. John Rockefeller (D-WV) stated in a release that "I will continue to take an aggressive stance to make sure consumers have adequate control over their personal information. Google was just plain wrong when it opted people into Buzz without their consent. This should be a wake-up call for online businesses -- both large and small -- of the need to be clear and honest about how the personal information of consumers is collected and used."

Berin Szoka, head of the Tech Freedom, stated in a release that "For years, many privacy advocates have insisted that only stringent new regulations can protect consumer privacy online. But todays settlement should remind us that the FTC already has sweeping powers to punish unfair or deceptive trade practices. The FTC can, and should, use its existing enforcement powers to build a common law of privacy focused on real problems, rather than phantom concerns. Such an evolving body of law is much more likely to keep up with technological change than legislation or prophylactic regulation would be, and is less likely to fall prey to regulatory capture by incumbents."

Leslie Harris, head of the Center for Democracy and Technology (CDT), stated in a release that "The terms of this agreement are strong medicine for Google and will have a far-reaching effect on how industry develops and implements new technologies and services that make personal information public".

"We expect industry to quickly adopt the new requirement for opt-in consent before launching any new service that will publicly disclose personal information".She added that "This settlement sends the message that companies not only have to keep the promises they make to consumers, they must give users control over any technologies that make their information public".

Google is represented in this matter by in house counsel and Albert Gidari of the law firm of Perkins Coie.

Genachowski Testifies on FCC Budget Request

3/30. The House Appropriations Committee's (HAC) Subcommittee on Financial Services and General Government held a hearing on the Federal Communications Commission (FCC) FY 2012 budget request.

FCC Chairman Julius Genachowski wrote in his prepared testimony that the FCC FY 2012 budget request is $354,181,000. He outlined the ongoing work of the FCC, and elaborated on some of the FCC's programs and proceedings.

He wrote that "The FCC's FY12 budget reflects a fiscally responsible effort to continue necessary programs without undercutting the Commission’s core missions in a way that would have a counterproductive effect. This past year, the Commission has identified workplace efficiencies and successfully initiated modernization with available resources, while simultaneously implementing the National Broadband Plan and accomplishing a range of other strategic goals. The FY12 funds will provide the FCC with the resources necessary to complete and finalize programs initiated in past years, and those essential to keep the Commission responsive to changes in technology. The funds will ensure that the Commission is capable of performing the tasks mandated by Congress in an effective and efficient manner."

FCC's AllVid Proposal Disputed

3/30. The Federal Communications Commission (FCC) has received communications recently regarding its AllVid technology mandates proposal.

The FCC made its proposal in its March 15, 2010 staff report [376 pages in PDF] titled "A National Broadband Plan for Our Future", at Recommendation 4.12, pages 51-52, and in its Notice of Inquiry (NOI) [28 pages in PDF], adopted and released on April 21, 2010. That NOI is FCC 10-60 in MB Docket No. 10-91, CS Docket No. 97-80, and PP Docket No. 00-67.

The FCC wrote in its NOI that "we wish to explore the potential for allowing any electronics manufacturer to offer smart video devices at retail that can be used with the services of any MVPD and without the need to coordinate or negotiate with MVPDs".

The FCC elaborated that "we introduce the concept of an adapter that could act either as a small ``setback´´ device for connection to a single smart video device or as a gateway allowing all consumer electronics devices in the home to access multichannel video programming services. Unlike the existing cable-centric CableCARD technology, this adapter could make possible the development and marketing of smart video devices that attach to any MVPD service anywhere in the United States, which could greatly enhance the incentives for manufacturers to enter the retail market."

Representatives of the Consumer Electronics Association (CEA), Consumer Electronics Retailers Coalition (CERC), Google, Sony Electronics, Public Knowledge, and Media Access Project (MAP) met with FCC officials on January 24, 2011, to urge the FCC to conduct an AllVid rulemaking proceeding.

The CEA's counsel wrote in a January 26, 2011, notice of ex parte meeting that they stated that the "technologies are at hand to produce a standard, IP-based interface that serves the needs of consumers and the requirements for innovation and competition, without compromising the legitimate expectations of content distributors and providers".

It urged the FCC to mandate "technical standards that enable any device to present a unified user interface that offers choices of both MVPD and non-MVPD programs and services, and home network content. Existing FCC regulations allow each MVPD to offer such a unified interface if it wishes, but have not succeeded in allowing manufacturers and retailers of competitive devices to offer such a product on a national basis. The tools are at hand to address this lack through an AllVid rulemaking that references private sector industry standards."

The CEA wrote in a March 16, 2011, notice of ex parte meeting that it expressed its "support for the initiation of an AllVid rulemaking" and that a "standards-based national IP interface supported by MVPD-specific gateways, as set forth in the National Broadband Plan, is essential to assure a national retail market for competitive devices, and to better foster competition by enabling consumers to choose among MVPD services".

Cisco wrote in a February 2 notice of ex parte meeeting that it requested the FCC "to defer action on its AllVid proposal in light of marketplace developments", including its digital television architecture named Videoscape, "that accomplish the goals of AllVid and would be harmed if hardware-based, limited functionality AllVid rules were adopted".

The National Cable and Telecommunications Association (NCTA) wrote in a letter [9 pages in PDF] to the FCC on February 8 that the claims in the CEA's January 26 notice "are without merit".

The NCTA wrote that Sony and Google "seek a Commission mandate for CE device manufacturers to extract piece parts of a multichannel offering for each CE manufacturer to remake into a service of its own design, as though each MVPD were a wholesale distributor of all content in all windows for delivery to all devices on every platform".

"But rights holders make programming and other intellectual property available based on specific distribution paths, security, audiences, and advertising opportunities." The NCTA continued, "Sony/Google are not proposing ``may the best device win.´´ Amazon, Apple, Netflix, Sony, and Google make their content available only through a retail presence that they themselves define. They do not open their storerooms and databases for MVPDs to take as wholesale inventory and make a part of a ``unified offering´´ in a ``store´´ provided by an MVPD. Under the Sony/Google proposal, retail device manufacturers could convert MVPDs into wholesale suppliers, but MVPDs would have no comparable right to incorporate the content of other types of video distributors into their own offerings -- thereby locking traditional MVPDs out of a potential new video marketplace."

"In a nutshell", the NCTA asserted, "Sony/Google are asking the Commission to ignore copyright, patent, trademark, contract privity, licensing, and other legal rights and limitations that have been thoroughly documented in this proceeding. Section 629 is not a blank check that can override these legal limitations and the fundamental policy objectives (e.g., protection of intellectual property rights) underlying them." (Parentheses in original.)

The Motion Picture Association of America (MPAA) wrote in a March 22 notice of ex parte meeting that "government intervention in a rapidly-developing device marketplace could have unintended consequences, particularly with respect to content protection".

It added that "mandating the integration of Internet content with video-on-demand is likely to elevate the profile of illegitimate sources of copyrighted content, or otherwise skew how consumers identify and choose which content to watch".

Also, on March 30, the Free State Foundation (FSF) released a paper [17 pages in PDF] titled "AllVid Proposal's First Amendment Problem: Exploring the FCC's Constitutionally Defective Device Regulation". The author is the FSF's Seth Cooper.

This paper argues that the FCC's AllVid proposal goes beyond the FCC's statutory authority of Section 629 of the Communications Act, which is codified at 47 U.S.C. § 549, and "would likely violate the First Amendment free speech rights of multichannel video programming distributors (MVPDs), such as Verizon Communications, AT&T, Time Warner Cable, Comcast, and DirecTV."

The FSF paper argues that "the FCC's proposed requirements regarding disaggregation of content and search menu and display, constitute compelled access mandates that are most likely prohibited by the First Amendment. Given conditions in today's dynamic video market, there is solid reason to believe that courts will not be as receptive to the FCC's AllVid proposal to regulate MVPDs and video navigation device functionality as they have previously been to earlier generations of regulation imposed on cable operators grounded in concerns over perceived cable monopolies. AllVid fails to advance any substantial -- let alone compelling -- governmental interest, and less onerous options are available to the Commission to achieve the objectives it claims that AllVid will further."

People and Appointments

3/30. Former Rep. Bart Gordon (D-TN) joined the Washington DC office of the law firm of K&L Gates. He is a former member of the House Commerce Committee (HCC) and former Chairman of the House Science Committee (HSC). He was the sponsor of numerous bills, including HR 3403 [LOC | WW], the "New and Emerging Technologies 911 Improvement Act of 2008' or the `NET 911 Improvement Act of 2008", which the 110th Congress enacted, and HR 5116 [LOC | WW], the "America COMPETES Reauthorization Act", which the 111th Congress enacted.

Nokia v. Apple Update

3/29. Nokia announced that it has filed another complaint with the U.S. International Trade Commission (USITC) against Apple alleging violation of 19 U.S.C. § 1337 in connection with its importation into the U.S. of items that infringe Nokia's patents.

Nokia stated in a release that "This second ITC complaint follows the initial determination in Nokia's earlier ITC filing, announced by the ITC on Friday, March 25. Nokia does not agree with the ITC's initial determination that there was no violation of Section 337 in that complaint and is waiting to see the full details of the ruling before deciding on the next steps in that case". See also, story titled "Nokia Files Section 337 Complaint Against Apple" in TLJ Daily E-Mail Alert No. 2,030, December 30, 2009.

Nokia has also filed complaints in the U.S. District Court (DDel), and courts in Germany, United Kingdom, and the Netherlands.

Paul Melin, Nokia's IP VP, stated that "Our latest ITC filing means we now have 46 Nokia patents in suit against Apple, many filed more than 10 years before Apple made its first iPhone".

Reps. Barton and Markey Write Wireless Companies About Their Customer Data Practices

3/29. Rep. Joe Barton (R-TX) and Rep. Ed Markey (D-MA) sent letters to AT&T, Verizon, T-Mobile USA, and Sprint asking for information regarding their collection of data on customers. See, letter to AT&T, which is substantially similar to the three other letters.

Rep. Ed MarkeyRep. Markey (at right) stated in a release that "Collecting, storing and disclosing a consumer's exact whereabouts for commercial purposes without their express permission is unacceptable and violates current law."

These letters ask, for example, for the companies to "describe the policies and procedures your company utilizes to comply" with 47 U.S.C. § 222, the customer proprietary network information (CPNI) statute.

The letters also ask "What personally identifiable information does your company collect from its customers?", and "How is this information collected ..."?

The letters also inquire about uses made of this information, how it is stored, and how it is disposed.

They also ask, "Other than pinpointing a customer's location for purposes of identifying the strongest signal, does your company use any other mechanisms for determining the location of a customer's mobile phone, such as how the customer checks her email?"

Finally, the letter asks about notice to customers of information collection and use.

The two Representatives ask for responses by April 19, 2011.

SEC Files Complaint Against Government Official for Stock Trading with Confidential Regulatory Information

3/29. The Securities and Exchange Commission (SEC) filed a civil complaint [PDF] in the U.S. District Court (DMd) against Cheng Yi Liang and others alleging insider trading in violation of Section 10b of the Exchange Act, and Section 17a of the Securities Act, in connection with use of non-public government information to trade in securities.

The complaint alleges that he was an employee of the Food and Drug Administration (FDA) who used confidential information about drug approvals, prior to public disclosure, to trade in the securities of the companies that applied to the FDA for approval.

The complaint states that "Liang engaged in unlawful insider trading in advance of at least 27 different announcements concerning FDA decisions on drug applications involving 19 different publicly-traded companies. Liang purchased stock for a profit before nineteen positive announcements; short sold stock for a profit before six negative announcements; and sold stock to avoid losses before two negative announcements."

Daniel Hawke, Chief of the SEC's Market Abuse Unit, stated in an SEC release that "The insider trading laws apply to employees of the federal government just as they do to Wall Street traders, corporate insiders, or hedge fund executives. Many government agencies like the FDA routinely possess and generate confidential market-moving information. Federal employees who misappropriate such information to engage in insider trading risk exposing themselves to potential civil and criminal charges for violating the federal securities laws.”

This case is SEC v. Cheng Yi Liang, et al., U.S. District Court for the District of Maryland, Greenbelt Division, D.C. No. 8:11-cv-00819-RWT.

New York State to Scrutinize Proposed AT&T Acquisition of T-Mobile USA

3/29. The Office of the Attorney General of New York (OAGNY) announced in a release that it "will undertake a thorough review of AT&T's acquisition of T-Mobile."

AT&T, Inc. and Deutsche Telekom AG announced on March 20, 2011, that they "have entered into a definitive agreement under which AT&T will acquire T-Mobile USA from Deutsche Telekom in a cash-and-stock transaction". See, story titled "AT&T to Acquire T-Mobile USA" in TLJ Daily E-Mail Alert No. 2,205, March 21, 2011.

The OAGNY stated that it "will closely scrutinize AT&T's argument that the merger has the potential to produce some benefits, such as expanding the coverage of AT&T's next generation broadband wireless network to rural areas in upstate New York that are underserved and have poor wired broadband connectivity".

It added that "The proposed merger could start a process of consolidation that would lead to two firms -- AT&T and Verizon -- controlling nearly 80% of wireless subscribers nationwide and dominating the U.S. wireless business."

This release also states that "some market conditions may differ across the state and highlighted the potential impact of the merger in areas like Rochester, Albany, Buffalo and Syracuse, where there are already fewer wireless options. He is also concerned about the impact on consumers throughout the state, where T-Mobile is a low-cost option."

Groups Comment on Competitive Impacts of Proposed AT&T T-Mobile Transaction

3/29. Gigi Sohn, the head of the Public Knowledge (PK), wrote in a short piece that her group "unequivocally opposes the proposed merger of AT&T, the 2nd largest national wireless carrier, with T-Mobile, the fourth (out of four) largest national wireless carrier.  If the $39 billion merger is approved, the combined entity would serve anywhere between 42-44% of all wireless subscribers, and together, AT&T&T and Verizon would control nearly 80% of all subscribers, with a weakened Sprint far behind." (Parentheses in original.)

Sohn continued that "T-Mobile, a feisty competitor that is known for its low prices, unlimited bandwidth and relative openness to new applications and services will be swallowed by AT&T, a company that is famous for high prices, low bandwidth caps and a history of blocking innovative applications (Skype, Sling and Google, to name just three)."  (Parentheses in original.)

She wrote that while it is "technically true" that acquisition of T-Mobile USA would "improve AT&T’s network performance", AT&T "could improve its network performance without taking out its scrappy competitor. Instead, it could take some of the $39 billion it is using to buy T-Mobile and invest it in its current network.  It can also develop significant swaths of spectrum that it owns. Finally, it can use the spectrum it does have more efficiently."

Sohn also wrote that "The merger is not necessary to increase deployment to rural areas" because "their coverage areas are overlapping. AT&T already holds licenses that could reach the entire US population, but they have not built out its service areas to do so.  Again it could simply invest some of that $39 billion to increase its coverage in rural areas - no merger is necessary."

In contrast, Randy May, head of the Free State Foundation (FSF) wrote in a short piece that "four to three" may "make a nice sound bite", but "it is in no way a substitute for the rigorous market analysis and weighing of the public benefits that will determine whether the proposed combination should be approved".

He wrote that if the transaction is approved by regulators, "there will still be three major nationwide providers -- AT&T, Verizon, and Sprint -- along with many smaller providers, such as MetroPCS, Leap Wireless, and U.S. Cellular, which serve many geographic areas. There are reportedly five or more competitors in the top 20 markets. There are other providers as well, such as TracFone, which serve niche product markets by differentiating their offerings on the basis of price or terms of service."

May, who long ago worked for the Federal Communications Commission (FCC), wrote that regulators "are even less likely than the business people or technologists to have the knowledge or expertise to succeed at making accurate predictions concerning the future of these dynamic markets. Indeed, given their dismal past track record, for example, conditioning mergers such as the AOL/Time Warner based on misplaced predictions concerning future market dominance and technological evolution, there is every reason to believe the antitrust authorities and the FCC commissioners and staff should approach the AT&T/T-Mobile merger with a healthy dose of humility concerning their own perspicacity."

He also condemned the FCC's "unseemly practice of extracting from the merger applicants, late in the review process, so-called ``voluntary´´ commitments in exchange for the agency acting on the merger." He added that "these extracted conditions often have little or nothing to do with any specific competitive issues raised by the proposed merger."

Dodd Calls for Market Access in PRC and Stronger IP Laws

3/29. Chris Dodd gave a speech in Las Vegas, Nevada, to the National Association of Theatre Owners (NATO) in which he called for stronger intellectual property laws, more meaningful enforcement, and addressing the People's Republic of China's (PRC) trade barriers.

Dodd served five terms -- thirty years -- in the U.S. Senate, concluding at the end of the 111th Congress. He began his tenure as head of the Motion Picture Association of America (MPAA) earlier this month.

He said that "the single biggest threat we face as an industry" is "movie theft", including by "camcording" inside movie theaters, and "rogue websites that profit from the illegal trafficking of counterfeit movies".

Chris DoddDodd (at left) called for "stronger laws to protect intellectual property and more meaningful enforcement of those laws".

He continued that "we are all living and working in a global economy. It is therefore crucial to the survival and growth of the film business that we expand our reach around the world. The economics of our industry depends on the success of our films in all markets, not just our own."

"When China limits the import of non-Chinese films to 20 a year, despite the fact that hundreds of U.S. films are produced each year -- including more than 100 by the MPAA member studios -- we are excluded from a market that presents huge untapped potential."

Dodd also said that "we can work together to ask Congress and others to protect intellectual property by cracking down on rogue websites that profit from the illegal trafficking of counterfeit movies".

Late in the 111th Congress, Sen. Patrick Leahy (D-VT), introduced S 3804 [LOC | WW], the "Combating Online Infringement and Counterfeits Act", or "COICA", a bill to allow the Department of Justice (DOJ) to seize domain names of such rogue web sites. The Senate Judiciary Committee (SJC) approved the bill. The full Senate did not.

Former Sen. Dodd was not one of the 19 cosponsors of that bill. See, list of cosponsors.

The bill has not yet been re-introduced in the 112th Congress. For a summary of that bill, see stories titled "Senators Introduce Bill to Enable DOJ to Shut Down Web Sites Dedicated to Infringement", "Bill Summary: Combating Online Infringement and Counterfeits Act", and "Commentary: Combating Online Infringement and Counterfeits Act" in TLJ Daily E-Mail Alert No. 2,132, September 21, 2010, and stories titled "Tech Groups Oppose Domain Name Seizure Bill" and "CDT Argues that Domain Name Seizure Bill Implicates Freedom of Speech" in TLJ Daily E-Mail Alert No. 2,135, September 29, 2010.

Dodd also waxed nostalgically about movie theaters and the cultural value of movies. He said that "even though so much about our industry has changed over the years, the importance of the theater setting hasn't. Our films are still made to be shown on big screens in dark theaters filled with people." He added that "there remains no better way to see a movie than in a theater".

"We are increasingly connected to the world by the power of emerging technologies, but at the same time we seem to be increasingly disconnected from each other by the same technology and stream of information and distractions." But, in movie theaters, "you will see neighborhoods coming together. You will see people turning off their phones and BlackBerrys".

He concluded that American movies provide a "common cultural vocabulary and a common understanding of ourselves".

WTO Trade Negotiators Discuss Market Access Issues

3/29. The World Trade Organization's (WTO) Trade Negotiations Committee is meeting this week in Geneva, Switzerland, to discuss the long running and stalled Doha round negotiations.

Michael Punke, Deputy U.S. Trade Representative, and U.S. Ambassador to the WTO, gave a speech on March 29 in which he discussed, among other topics, market access.

He said that the U.S. "is not giving up the effort. We are fully committed to working hard in coming weeks to find productive ways forward and we continue to be open to a full discussion with any and all Members to explore this question. One point, however, is fundamental. We are setting the terms of global trade for decades to come, so it remains essential that this negotiation produce market access outcomes in industrial goods, services, and agriculture that are in keeping with the realities of a 21st century economy."

He also said that "there has been considerable interest in the bilateral discussions between the United States and China", which have been extensive in recent weeks. He continued that "our analysis of the gaps in the negotiation, while informed to an important degree through our discussions with China, is not exclusively informed by those discussions. My colleagues here are aware that we have important market access interests with respect to other major members as well, and those gaps must also be addressed for Doha negotiations to succeed."

He said, with respect to non-agricultural market access, or NAMA, negotiations, that "We and other proponents of NAMA sectors have proposed an architecture with three broad elements: (1) a very substantial zero for zero basket; (2) other baskets with greater-than-formula cuts using a range of tools to address sensitivities; and (3) a basket that accommodates the use of normal NAMA flexibilities."

"China has taken a different approach to product baskets" said Punke. "China also proposes a zero basket -- but only developed countries would contribute to that basket. It also proposes a second basket where countries would make greater-than-formula cuts -- but with developed countries contributing more than developing countries. Developing countries would self-designate the goods covered in this and other baskets. China proposes a third basket where developing countries would take formula cuts only while developed country cuts would go to zero. Finally, China proposes a fourth basket for developing country flexibilities."

WTO Director General Pascal Lamy stated in a speech on March 29 that the "collective objective" is to "conclude the Round by the end of the year".

He said that "The absence of progress in NAMA sectorals constitutes today a major obstacle to progress on to the remaining market access issues."

Pascal Lamy"Over the coming two weeks", said Lamy (at right), "I will undertake consultations with a number of Members with a view to understanding the size of the gaps on the NAMA market access."

He also asked trade negotiators to "reflect on the consequences of failure. To reflect on the costs of the non-Round to the world economy as well as to the development prospects of Members, in particular the smaller and least-developed which are more dependent on an improved set of global trade rules. And above, it is time to think about the consequences of the non-Round to the multilateral trading system which we have so patiently built over the last 70 years."

People and Appointments

3/29. President Obama announced his intent to appoint Gary Hirshberg to be a member of the Office of the U.S. Trade Representative's (OUSTR) Advisory Committee for Trade Policy and Negotiations. See, White House news office release.

3/29. President Obama announced his intent to appoint Nisha Biswal to the Congressional-Executive Commission on the People's Republic of China. See, White House news office release.

More News

3/29. Secretary of Commerce Gary Locke gave a speech in Los Angeles, California, on trade. He said that "America's economic output is expected to grow more from the U.S.-Korea agreement than from our last nine trade agreements combined." He added that "We are working hard to get this deal through the U.S. Senate".

People and Appointments

3/28. The Senate confirmed Mae D'Agostino to be a Judge of the U.S. District Court (NDNY) by a vote of 88-0. See, Roll Call No. 46.

3/28. The CTIA hired Jaime Hjort as director of government affairs. Hjort has worked for former Sen. George Allen (R-VA) and former Rep. Tom Davis (R-VA). See, CTIA release.

More News

3/28. The Federal Communications Commission (FCC) published a notice in the Federal Register that sets comment deadlines for its Notice of Proposed Rulemaking (NPRM) [52 pages in PDF] regarding retransmission consent negotiations. The deadline to submit initial comments is May 27, 2011. The deadline to submit reply comments is June 27, 2011. The FCC adopted and released this NPRM on March 3, 2011. It is FCC 11-31 in MB Docket No. 10-71. See, Federal Register, March 28, 2011, Vol. 76, No. 59, at Pages 17071-17088.

3/28. The National Science Foundation (NSF) published a notice in the Federal Register on behalf of the National Coordination Office for Networking and Information Technology Research and Development (NCO/NITRD) announcing a workshop on May 17, 2011, on cyber security research titled "Distributed Data Schemes Provide Security". This notice announces the workshop, calls for participation, set the date (but not the time or place), and sets the deadline to apply to participate (April 15, 2011). See, NITRD issue summary and notice in the Federal Register, March 28, 2011, Vol. 76, No. 59, at Page 17158-17159.

3/28. The Federal Communications Commission (FCC) filed its brief [88 pages in PDF, redacted] with the U.S. Court of Appeals (DCCir) in Farmers & Merchants Mutual Telephone Co. of Wayland Iowa v. FCC and USA, App. Ct. No. 10-1093, petitions for review of an order of the FCC pertaining to traffic pumping. The Court of Appeals has not yet scheduled oral argument.

3/28. Tyrone Pipkin pled guilty in U.S. District Court (EDLa) to conspiracy in connection with his defrauding the Federal Communications Commission's (FCC) fraud, waste and abuse plagued e-rate tax and subsidy program. The Department of Justice (DOJ) stated in a release that "Pipkin participated in the conspiracy to provide bribes and kickbacks to school officials and employees responsible for the procurement of Internet access services at certain schools in Arkansas, Illinois and Louisiana. In return, those individuals ceded control of the E-Rate competitive bidding process to Pipkin and his co-conspirator, ultimately allowing them to ensure E-Rate contracts at these schools were awarded to their companies."

Go to News from March 21-25, 2011.