Source: http://www.techlawjournal.com/alert/2009/06/04.asp
Timestamp: 2019-04-20 10:56:41+00:00

Document:
TLJ Daily E-Mail Alert No. 1,948, June 4, 2009.
June 4, 2009, Alert No. 1,948.
6/4. The Wall Street Journal reported in a story titled "Justice Department Probes Hiring Practices in Silicon Valley", by Jessica Vascellaro and Justice Scheck, that the Department of Justice's (DOJ) Antitrust Division "is investigating whether a number of large U.S. companies violated antitrust laws by establishing agreements not to recruit each other's employees". See, WSJ, June 4, 2009, at page B3.
See also, June 3, 2009, Washington Post article by Cecelia Kang titled "Federal Antitrust Probe Targets Tech Giants, Sources Say".
And see, June 3, 2009, New York Times article by Miguel Heft titled "Unwritten Code Rules Silicon Valley Hiring".
These articles cite no DOJ sources or documents.
5/29. The Department of Justice's (DOJ) Antitrust Division released a paper [25 pages in PDF] titled "Railway Mergers and Railway Alliances: Competition Issues and Lessons for Other Network Industries". The author is DOJ economist Russell Pittman.
This paper is primarily about freight railroads in the U.S. and Europe. However, the end of the paper adds comments about network industries generally. Pittman cites telecommunications and cable as examples. Other writers refer to certain software and hardware, music players, and other tech sectors as network industries.
This paper states that "On the one hand, mergers and alliances that increase efficiency, for example through more effective interlining, have allowed rail carriers to better compete with motor carriers for high valued freight cargos. On the other hand, as in other industries, mergers and alliances with actual or potential competitors have the potential to reduce competition and raise prices".
It also states that "it is not always true, but certainly it is often true that customers in network industries have many options that may protect them from monopolistic behavior by otherwise ``monopolistic´´ service providers. Regarding rail freight, the most obvious protection is provided by other transport modes", such as motor carriers and water carriers.
Pittman concludes that "Network industries are almost by definition industries with significant fixed costs that must be somehow recovered if the network is to be built in the first place and then maintained and improved. This means that we should be satisfied with a market structure far short of perfect competition, with the accompanying prices competed down close to marginal costs; a not unrelated point is that efficient usage of the network may involve some kind of price discrimination, charged either by the network operator as an access price or by an integrated service provider."
He adds that "Marginal cost pricing in a network industry is a recipe for long term disaster -- or, as Posner (2006) summarizes, ``Open Access advocates should be very careful what they ask for because they just might get it.´´"
See, October 12, 2006, speech by Henry Posner, President of the Railroad Development Corporation, regarding railroad open access.
The paper contains this footnote: "The views expressed herein are entirely those of the author and are not purported to reflect those of the" DOJ.
6/3. The House Commerce Committee's (HCC) Subcommittee on Commerce, Trade, and Consumer Protection amended and approved HR 2221 [LOC | WW], the "Data Accountability and Trust Act".
It approved by voice vote an amendment in the nature of a substitute [35 pages in PDF].
Rep. Bobby Rush (D-IL), the Subcommittee Chairman, introduced this bill on April 30, 2009. He stated at the mark up that this bill is a "work in progress" and that further changes will be made before the full Committee mark up. He also promised to work in a "cooperative and deliberative manner" with Committee Republicans. See also, opening statement read by Rep. Rush at the beginning of the mark up.
This bill has bipartisan support. Its original cosponsors also include Rep. Cliff Stearns (R-FL), Rep. Joe Barton (R-TX), and Rep. George Radanovich (R-CA). Rep. Stearns, a former Chairman of this Subcommittee, introduced predecessor legislation in the 109th Congress.
This Subcommittee held a hearing on HR 2221 and HR 1319, the "Informed P2P User Act", on May 5, 2009. See, prepared testimony of witnesses: Eileen Harrington (Federal Trade Commission), David Sohn (Center for Democracy and Technology), Robert Holleyman (Business Software Alliance), Martin Lafferty (Distributed Computing Industry Association), Stuart Pratt (Consumer Data Industry Association), Marc Rotenberg (Electronic Privacy Information Center), Robert Boback (Tiversa, Inc.), and Thomas Sydnor (Progress & Freedom Foundation).
The bill contains a federal data breach notification requirement, preempts certain state laws, and requires companies and persons that hold data with personal information to develop security measures.
Section 2 of the bill (amendment approved on June 3) pertains to data security. It requires the FTC to write rules that "require each person engaged in interstate commerce that owns or possesses data containing personal information, or contracts to have any third party entity maintain such data for such person, to establish and implement policies and procedures regarding information security practices for the treatment and protection of personal information ..."
Section 3 of the bill establishes a national data breach notification requirement.
It provides that "Any person engaged in interstate commerce that owns or possesses data in electronic form containing personal information shall, following the discovery of a breach of security of the system maintained by such person that contains such data ... notify each individual who is a citizen or resident of the United States whose personal information was acquired by an unauthorized person as a result of such a breach of security" and notify the FTC.
Section 4 of the bill gives the FTC civil enforcement authority. It shall treat violations of Sections 2 and 3 as an unfair and deceptive act or practice. The bill also gives civil enforcement authority to state attorneys general, and sets limits on civil penalties.
Section 5 of the bill contains definitions.
Section 6 preempts certain state laws. It provides that "This Act supersedes any provision of a statute, regulation, or rule of a State or political subdivision of a State, with respect to those entities covered by the regulations issued pursuant to this Act, that expressly (1) requires information security practices and treatment of data containing personal information similar to any of those required under section 2; and (2) requires notification to individuals of a breach of security resulting in unauthorized access to or acquisition of data in electronic form containing personal information."
Moreover, it provides that "No person other than the Attorney General of a State may bring a civil action under the laws of any State if such action is premised in whole or in part upon the defendant violating any provision of this Act."
However, this bill does not preempt state consumer protection, trespass, contract, tort or fraud laws.
6/3. June 1, 2009, was the deadline to submit comments to the Federal Trade Commission (FTC) in response to its notice of proposed rulemaking regarding health breach notifications.
HR 1 [LOC | WW], the huge spending bill enacted into law in February, which is also titled "American Recovery and Reinvestment Act of 2009", also contained numerous substantive law provisions.
In one of these provisions, the bill required the FTC to write rules requiring vendors of personal health records (PHRs) and related entities to notify individuals when the security of their individually identifiable health information is breached.
The FTC published a notice in the Federal Register on April 20, 2009. See, Federal Register, April 20, 2009, Vol. 74, No. 74, at Pages 17914-17925.
The Department of Health and Human Services is responsible for breach notification rules for Health Insurance Portability and Accountability Act (HIPAA) covered entities or business associates of such entities.
On June 1, the Electronic Privacy Information Center (EPIC) submitted its comment [12 pages in PDF].
The EPIC wrote that "The present rule could provide substantial new privacy protections for consumers by expanding regulatory coverage to all third parties who handle Personal Health Records, tightening exemptions for de-identified data, and mandating effective supplemental means of notification when personal health information has been compromised."
"As currently drafted, however, the proposed rule only covers a subset of all entities who handle PHRs, provides broad exceptions from notice requirements for data that is ``de-identified´´ but nonetheless remains personally identifiable, and fails to take advantage of cutting edge technologies for providing supplemental breach notifications."
Also on June 1, the Markle Foundation, Center for Democracy and Technology (CDT), and others submitted a comment [16 pages in PDF].
This comment recommends, among other things, that the FTC "Work with HHS to apply consistent information and breach policies to PHRs in order to provide consumers with a reliable framework of protections"
6/2. The U.S. Court of Appeals (6thCir) issued its opinion [10 pages in PDF] in Wike v. Vertrue, reversing the judgment of the District Court.
This is a class action, brought under the Electronic Funds Transfer Act (EFTA), which is codified at 15 U.S.C. § 1693 et seq., regarding e-commerce marketing practices, and periodic charges to credit and debit card accounts.
The District Court granted summary judgment to the defendants, after concluding that the EFTA's one year limitations period barred Wike's claim. The Court of Appeals reversed and remanded.
The Senate Commerce Committee (SCC) is investigating the business practices of Vertrue and other online marketers. See, story titled "Senate Commerce Committee Investigates E-Commerce Marketing" in TLJ Daily E-Mail Alert No. 1,973, May 27, 2009.
This case is Margaret Wike v. Vertrue, Inc. et al., U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 08-5905, an appeal from the U.S. District Court for the Middle District of Tennessee at Nashville, D.C. No. 06-00204, Judge Robert Echols presiding.
6/3. FCC Chairman Michael Copps stated in a release that "I congratulate my colleague and friend Rob McDowell on the announcement that President Obama intends to nominate him for another term at the FCC. I am truly delighted that he will continue on as a fellow Commissioner." See also, statement of Ed Black, head of the Computer and Communications Industry Association (CCIA), statement of Dan Glickman, head of the Motion Picture Association of America (MPAA), and statement of Walter McCormick, head of the U.S. Telecom.
6/3. The U.S. Court of Appeals (2ndCir) issued an opinion [18 pages in PDF] in Holmes v. Grubman, part of the WorldCom securities litigation. The U.S. District Court (SDNY) dismissed the complaint. The Court of Appeals affirmed the District Court on two issues, and certified three questions to the Supreme Court of Georgia. The plaintiffs filed their original complaint in U.S. District Court (MDGa) alleging violation of Georgia law. The case was consolidated with other WorldCom securities cases in the District Court in New York City. This case is William Holmes, et al. v. Jack Grubman, et al., U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 06-5246-cv, an appeal from the U.S. District Court for the Southern District of New York.
6/3. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) released its SP 800-53 Rev. 3 [220 pages in PDF] titled "Recommended Security Controls for Federal Information Systems and Organizations". The deadline to submit comments on this draft is July 1, 2009.
6/3. The Motion Picture Association of America (MPAA) issued a statement praising the Malaysian Ministry of Domestic Trade and Consumer Affairs (MDTCA) for conducting raids on May 30 and 31, 2009, "taking down six warehouses storing pirated products slated for export to Singapore".
6/3. The Federal Communications Commission (FCC) held an event titled "Open Meeting" at which Commissioners and witnesses discussed government planning of the transition to digital television. See, statement of FCC Chairman Michael Copps, statement of FCC Commissioner Jonathan Adelstein, statement of Julius Knapp (FCC Office of Engineering and Technology), statement of Cathy Seidel (Chief Consumer and Governmental Affairs Bureau), and FCC web page with hyperlinks to statement of other speakers. The FCC also released a Public Notice [2 pages in PDF] titled "Digital Transition Call Sign Procedures". It is DA 09-1253.
6/2. The Federal Trade Commission (FTC) filed an amended complaint [17 pages in PDF] with the U.S. District Court (NDIll) in FTC v. Voice Touch, alleging violation of Section 5(a) of the FTC Act, 14 U.S.C. § 45(a), and the FTC's Telemarketing Sales Rule, 16 C.F.R. Part 310, in connection with its use of automated dialing of telephone calls, and prerecorded messages. The FTC describes this as robocalling and voice broadcasting. The FTC alleges the use of deceptive messages regarding automobile warranty expiration. This case is FTC v. Voice Touch, Inc., et al., U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 09-cv-2929.
6/2. Steve Guggenheimer, Microsoft's OEM VP, stated at the Computex 2009 convention in Taipei, Taiwan, that Microsoft Windows 7 and Windows Server 2008 R2 will both become generally available on October 22, 2009. See, Microsoft release.
6/2. The U.S. Court of Appeals (8thCir) issued its opinion [9 pages in PDF] in USA v. Bender, an appeal from a criminal sentencing following conviction for violation of 18 U.S.C. § 2423(b). The District Court ordered, among other things, that the "The defendant shall not possess or use a computer for any reason and shall not possess or use a computer or any device with access to any on-line computer services". The Court of Appeals, noted that the defendant had "arranged on-line to meet a woman for sexual relations, and pursued a sexual relationship despite discovering that she was a minor", and concluded that the District Court did not abuse its discretion in imposing a prohibition on computer use. This case is U.S.A. v. William Robert Bender, U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 08-2899, an appeal from the U.S. District Court for the Western District of Missouri.
6/1. The National Institute of Standards and Technology (NIST) published a notice in the Federal Register that announces and sets the application deadline (July 13, 2009 at 3:00 PM) for grants to conduct research on, among other things, information technology and cyber security. The NIST stated that it "plans to award up to $35 million in grants and cooperative agreements (20-60 awards expected), Individual awards are expected to range between $500,000 and $1,500,000. Projects are expected to start by September of 2009." (Parentheses in original.) See, Federal Register, June 1, 2009, Vol. 74, No. 103, at Pages 26209-26213.
6/1. The National Institute of Standards and Technology (NIST) published a notice in the Federal Register that announces and sets the application deadline (July 27, 2009, at 3:00 PM) for grants under its Measurement Science and Engineering Research Fellowship Program. The NIST stated that "The anticipated level of funding is up to $20,000,000 ($20 million) total for the fellowships program for up to three years. NIST anticipates making one to five awards. Projects are expected to start by January 2010." See, Federal Register, June 1, 2009, Vol. 74, No. 103, at Pages 26206-26209.
6/1. The National Institute of Standards and Technology (NIST) published a notice in the Federal Register that announces and sets the application deadline (June 25, 2009, at 3:00 PM) for grants to build research science buildings. The NIST stated that "Approximately $120 million is available for new grants for the FY 2009 competition. NIST anticipates funding 8-12 projects with Federal shares in the $10 million -- $15 million range with a project period of performance of up to five (5) years". See, Federal Register, June 1, 2009, Vol. 74, No. 103, at Pages 26213-26217.
6/1. The Federal Communications Commission (FCC) published a notice in the Federal Register that announces, describes, and sets comment deadlines for, its Notice of Inquiry (NOI) regarding commercial use of a radio audience measurement device developed by Arbitron named the portable people meter (PPM). The FCC adopted this NOI on May 15, 2009, and released the text on May 18, 2009. It is FCC 09-43 in MB Docket No. 08-187. See, Federal Register, June 1, 2009, Vol. 74, No. 103, at Pages 26235-26241. Initial comments are due by July 1, 2009. Reply comments are due by July 31, 2009.
The House will meet at 10:00 AM for legislative business. The agenda includes several non-technology related items. See, Rep. Hoyer's schedule for week of June 1, and schedule for June 4.
The Senate will meet at 9:30 AM. It will resume consideration of the motion to proceed to HR 1256 [LOC | WW], the "Family Smoking Prevention and Tobacco Control Act".
9:30 AM. The Senate Appropriations Committee's (SAC) Subcommittee on Commerce, Justice and Science will hold a hearing on appropriations for the Federal Bureau of Investigation (FBI). The witness will be FBI Director Robert Mueller. Location: Room 192, Dirksen Building. The Subcommittee will then meeting in closed session in Room SVC-217.
10:00 AM. The House Oversight and Government Reform Committee will meet to mark up several bills, including HR 2392 [LOC | WW], the "The Government Information Transparency Act". See, notice. Location: Room 2154, Rayburn Building.
10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda yet again includes consideration of S 417 [LOC | WW], the "States Secret Protection Act", and HR 985 [LOC | WW] and S 448 [LOC | WW], both titled the "Free Flow of Information Act of 2009". See, stories titled "Senate Judiciary Committee to Consider State Secrets Bill" and "9th Circuit Rules in State Secrets Case" in TLJ Daily E-Mail Alert No. 1,933, April 29, 2009. The agenda also again includes consideration of the nominations of David Hamilton to be a Judge of the U.S. Court of Appeals (6thCir), Andre Davis to be a Judge of the U.S. Court of Appeals (4thCir), and Thomas Perez to be Assistant Attorney General in charge of the Civil Rights Division. The SJC rarely follows its published agendas. See, notice. Location: Room 226, Dirksen Building.
10:00 AM. The House Commerce Committee's (HCC) Subcommitte on Oversight and Investigations will hold a hearing titled "Commercial Sales Of Military Technologies". Location: Room 2322, Rayburn Building.
10:00 AM. The House Commerce Committee's (HCC) Subcommitte on Communications, Technology and the Internet will hold an oversight hearing on the Internet Corporation for Assigned Names and Numbers (ICANN). Location: Room 2123, Rayburn Building.
10:00 AM. The House Small Business Committee will hold a hearing titled "Legislative Initiatives to Strengthen and Modernize the SBIR and STTR Programs". SBIR is the Small Business Innovation Research program. STTR is the Small Business Technology Transfer program. Location: Room 2360, Rayburn Building.
10:00 AM - 1:00 PM. The National Telecommunications and Information Administration's (NTIA) Online Safety and Technology Working Group (OSTWG) will hold its organizational meeting. The OSTWG was created by Section 214 of S 1492 [LOC | WW]. Part I of this bill is the "Broadband Data Improvement Act"; Part II is the "Protecting Children in the 21st Century Act". It is now Public Law No. 110-385. See, story titled "NTIA Seeks Members for Online Safety and Technology Working Group" in TLJ Daily E-Mail Alert No. 1,863, November 25, 2008. See also, notice in the Federal Register, May 21, 2009, Vol. 74, No. 97, at Page 23846. Location: Federal Communications Commission, 445 12th St., SW.
11:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Commercial and Administrative Law will hold a hearing on HR 1508 [LOC | WW], the "Sunshine in Litigation Act of 2009". See, notice. The HJC will webcast this event. Location: Room 2237, Rayburn Building.
Tom Tauke (Verizon's EVP of Public Affairs, Policy and Communications) will host a media briefing and Q&A. Box lunches will be served. For more information, contact David Fish at 202-515-2514 or david dot m dot fish at verizon dot com.
2:00 PM. The House Judiciary Committee's (HJC) Subcommittee on the Constitution, Civil Rights and Civil Liberties will hold a hearing on HR 984 [LOC | WW], the "States Secret Protection Act". See, notice. The HJC will webcast this event. Location: Room 2141, Rayburn Building.
2:30 PM. The Senate Appropriations Committee's (SAC) Subcommittee on the Legislative Branch will hold a hearing on appropriations for the Library of Congress. Location: Room 138, Dirksen Building.
2:30 PM. The Federal Trade Commission's (FTC) Bureau of Economics (BOE) will host an untitled seminar by Devin Pope (University of Pennsylvania) He is an economist, and author of the paper titled "The Effect of the Internet on Matching Markets: Evidence from Craigslist". Location: FTC Conference Center, 601 New Jersey Ave., NW.
Day four of a four day conference titled "Computers, Freedom, and Privacy 2009". See, conference web site. Location: Marvin Center, George Washington University.
Day one of a two day meeting of the Federal Bureau of Investigation's (FBI) Criminal Justice Information Services Division's Advisory Policy Board. This Division administers the Integrated Automated Fingerprint Identification System, the Interstate Identification Index, Law Enforcement Online, National Crime Information Center, the National Instant Criminal Background Check System, the National Incident-Based Reporting System, Law Enforcement National Data Exchange, and Uniform Crime Reporting. See, notice in the Federal Register, April 15, 2009, Vol. 74, No. 71, at Page 17524. Location: Gaylord National, 201 Waterfront Street, National Harbor, MD.
Deadline to submit oppositions to the Federal Communications Commission (FCC) in response to the petitions for partial reconsideration of the FCC's Second Report and Order and Order on Reconsideration (also know as the second internet based TRS order) filed by the Telecommunications for the Deaf and Hard of Hearing, Inc. and the TDI Coalition, and by GoAmerica, Inc. The FCC adopted and released this second internet based TRS order [47 pages in PDF] on December 19, 2008. It is FCC 08-275 in CG Docket No. 03-123 and WC Docket No. 05-196. See, notice in the Federal Register, May 20, 2009, Vol. 74, No. 96, at Pages 23715-23716.
Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to the FCC's notice regarding the National Exchange Carrier Association's (NECA) proposed compensation rates for interstate traditional telecommunications relay service (TRS), interstate Speech-to-Speech (STS) relay service, interstate captioned telephone service (CTS) and interstate and intrastate Internet Protocol (IP) captioned telephone service (IP CTS), interstate and intrastate IP Relay, and interstate and intrastate Video Relay Service (VRS). This is also the deadline to submit initial comments in response to the proposed carrier contribution factor and funding requirement for the Interstate TRS Fund. This item is FCC 09-39 in CG Docket No. 03-123 and WC Docket No. 05-196. See, notice in the Federal Register, May 21, 2009, Vol. 74, No. 97, at Pages 23859-23860.
Deadline to submit initial comments to the Federal Communications Commission (FCC) Notice of Proposed Rulemaking whether or not it should adopt new Video Relay Service (VRS) reimbursement rates that reflect the cost data in the fund administrator's recent filing with the FCC, rather than continuing the current rates. This item is FCC 09-39 in CG Docket 03-123. See, notice in the Federal Register, May 21, 2009, Vol. 74, No. 97, at Pages 23815-23816.
Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking and Order [63 pages in PDF] regarding revising the FCC's Schedule of Regulatory Fees. The FCC adopted this item on May 11, 2009, and released the text on May 14. It is FCC 09-38 in MD Docket No. 09-65. See also, notice in the Federal Register, June 2, 2009, Vol. 74, No. 104, at Pages 26329-26360.
The House may meet at 9:00 AM for legislative business. The agenda for the week includes numerous non-technology related items. See, Rep. Hoyer's schedule for week of June 1.
6:00 - 8:00 PM. The New America Foundation (NAF) will host an event titled "The Open Technology Initiative". The speakers will be Rick Whitt (Google), Christopher Libertelli (Skype), Ben Scott (Free Press), Helen Brunner (Media and Democracy Fund), and Sascha Meinrath (NAF). See, notice. Wine will be served. Location: NAF, 4th floor, 1899 L St., NW.

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