The House and Senate return from recess next week. The House will convene on Tuesday, March 29, taking up the following measures: H.R. 1079, the Airport and Airway Extension Act of 2011 and H.R. 839, the HAMP Termination Act of 2011. The Senate will convene at 2:00 PM on Monday, March 28 and resume consideration of S. 493, the SBIR/STTR Reauthorization Act of 2011.
- Sixth Short-Term CR Enacted. On March 18, the President signed the sixth short-term Continuing Resolution (CR) of FY2011. The three-week CR continues to reduce spending by $2 billion per week through specific program terminations and reductions (which, for the most part, aligned with those proposed in the President’s FY2012 budget request) and by reducing programmatic funding by the amounts earmarked to each in FY2010. This CR will fund the federal government through April 8.
- Negotiations for a CR Covering the Remainder of FY2011. Negotiations on a CR covering the remainder of FY2011 remain tenuous. Democrats and Republicans are roughly $50 billion apart in the spending cuts they support and also at odds over whether taxes and entitlements should be considered. Additionally, policy riders being pushed by conservative House Republicans, such as de-funding Planned Parenthood and health care reform, are strongly opposed by Democrats and the President, as well as some moderate Senate Republicans.
- FY2012 Budget Activity. While the focus will remain on resolution of the FY2011 appropriations process, a number of House Appropriations subcommittees will continue to hold hearings on the FY2012 budget next week.
- Patent Reform. On March 24, House Judiciary Chairman Lamar Smith (R-TX) circulated a draft patent overhaul bill, which is expected to be introduced before the Committee holds a hearing on the legislation on March 30. The key difference between the House draft and Senate-passed bill relates to the mechanisms for challenging the validity of issued patents. While the House bill would also create “inter partes” review of the validity of patents, it would allow longer periods of time for such challenges and would establish a lower threshold for bringing challenges than the Senate version.
- The STEM Master Teacher Corps Act. Senator Al Franken (D-MN) intends to introduce the STEM Master Teacher Corps Act of 2011 when the Senate returns from recess. The Act will offer competitive grants to school districts in partnership with universities or nonprofit organizations to support career advancement opportunities for science, technology, engineering and mathematics (STEM) teachers. If passed, Corps members would receive specialized training on leadership, mentorship and content and pedagogical skills relevant to STEM, as well as share resources and best practices with other teachers in their schools and districts to amplify the impact of the program. The Act also looks to recruit and retain highly-qualified STEM teachers at low performing schools.
- For-profit Colleges. On March 18, the Department of Justice argued that the Education Department was well within its legal authority to promulgate rules tightening regulation of federal student aid and asked a federal judge to dismiss a lawsuit in which for-profit colleges are challenging three of the Department’s proposed rules.
- College Completion. Vice President Biden issued a call to action March 22 to boost college graduation rates and help the nation meet President Obama’s goal to have the best-educated workforce and the highest proportion of college graduates in the world by 2020. In doing so, the Administration published a college completion toolkit with suggested policies to help States meet those goals and announced a new competitive grant program focused on college completion. Funding for the grant program is likely to face resistance by Congressional Republicans.
- CES. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) and Ranking Member Lisa Murkowski (R-AK) have issued a white paper on key questions and potential design elements toward developing a national Clean Energy Standard, following the President’s goal of generating 80 percent of the nation’s electricity from clean energy resources by 2035. Stakeholder comments are due by April 11.
- Offshore Drilling. As lawmakers continue to address rising gas prices, House Natural Resources Committee Chairman Doc Hastings (R-WA) is expected to introduce legislation to further incentivize offshore drilling in developable areas of the Gulf of Mexico and areas beyond the Gulf. In the interim, Gulf State members have introduced legislation to extend OCS leases for one year to accommodate permitting delays and prepare for new regulations – and to limit the amount of time Interior has to make application decisions and to require that bonus bids be returned under certain conditions. Senator Robert Menendez (D-NJ) has also introduced “use it or lose it” legislation to force oil companies to develop leased tracts or pay penalties. Senate Energy and Natural Resources Committee Ranking Member Lisa Murkowski (R-AK) and Senator Mark Begich (D-AK) have already announced their opposition to the bill. The Alaskans are particularly frustrated with regulatory obstacles that have precluded Shell from drilling in the Beaufort Sea.
- Congressional Hearings. The Senate Energy and Natural Resources Committee will meet on Tuesday to hear from nuclear regulators, industry representatives and the Union of Concerned Scientists regarding the Japanese Fukushima Daiichi reactor nuclear plant. On Thursday, the Committee will hold a legislative hearing regarding pending bills to improve hydropower and promote marine renewables, as well as on the energy/water integration portion of the comprehensive energy legislation the committee favorably reported in the 111th Congress. On Wednesday, the House Natural Resources Committee will hear from Interior officials regarding the FY2012 budget request for the Bureau of Ocean Energy Management. The Committee will hold a legislative hearing on Thursday to examine the impact of rising gasoline prices on families and businesses.
- Rare Earth Metals. The Department of Energy (DOE) has requested information from stakeholders to update its Critical Materials Strategy with more detailed information on material content, supply chain structure, financing, research and development, technology transitions and recycling. DOE is trying to determine the best policies needed to promote elements mostly used in clean technologies. Comments are due by May 24.
- Deepwater Permits. The Bureau of Ocean Energy Management has issued five deepwater permits to companies operating in the Gulf of Mexico since the offshore drilling moratorium was lifted in October. Additional permits are expected in the coming weeks.
- Disease Clusters and Environmental Health. On March 29, the Senate Committee on Environment and Public Works intends to hold a hearing on disease clusters that arise from environmental toxin exposure in communities experiencing unexpected increases in incidences of birth defects, cancer or other diseases. Chairman Barbara Boxer (D-CA) and Senator Mike Crapo (R-ID) recently introduced legislation (S. 76) to address protections for children from disease clusters. Erin Brockovich is expected to testify.
- Water Supply. On April 5, the House Natural Resources Committee’s Subcommittee on Water and Power Oversight intends to hold a hearing concerning the restoration of the national water supply as it affects power and job growth. The Subcommittee intends to examine federal regulations that may be impeding water and hydro-electric resources and water diversions vital to agriculture production, as well as the mission of the Bureau of Reclamation.
- Oceans, Fish and Wildlife. On March 31, the House Natural Resources Committee’s Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs intends to hold a hearing to consider the FY2012 budget request from the National Oceanic and Atmospheric Administration and the National Marine Fisheries Service.
- NEPA Pilot Program. The President’s Council on Environmental Quality (CEQ) invites public and federal agencies to nominate innovative pilot projects that accomplish the National Environmental Policy Act (NEPA) goals of transparency and informed decision making in a more timely and effective manner. The NEPA Pilot Program will also facilitate a review under section 6 of Executive Order 13563, “Improving Regulation and Regulatory Review,'' of provisions of CEQ's NEPA Regulations that may be outmoded, ineffective, insufficient or excessively burdensome. Nominations will be accepted until June 15, 2011.
- U.S.-Mexico Border Report. In conjunction with Mexico’s Secretary for Natural Resources and the Environment, the Environmental Protection Agency (EPA) has released the Border 2012 Accomplishment Report for 2010. The report highlights projects taking place within border communities through the Border 2012 program. Border 2012 is a U.S.-Mexico program that protects people’s health and the environment for 10 States on both sides of the 2,000-mile border, including 26 U.S. tribes and seven groups of Mexican indigenous people. The bi-national program focuses on cleaning the air, providing safe drinking water, reducing the risk of exposure to hazardous waste and ensuring emergency preparedness along the U.S.-Mexico border. Highlights of the Border 2012 Accomplishment Report include: watershed projects, partnering with academia to improve air quality, engaging industry to recycle obsolete electronics, pesticide collection and coordination with tri-national tribal partnerships.
- State Air Quality Implementation Plans. EPA has issued several Notices of Public Rule Making (NPRMs) for approval and promulgation of various air quality implementation plans for the following States: Louisiana, Alabama, California, Kentucky, Mississippi and South Carolina. Written comments must be received on or before April 18.
- Mercury. EPA has published a final rule requiring reductions in emissions of mercury from electric utility steam generating units. The rule was vacated on February 8, 2008 by the U.S. Court of Appeals for the District of Columbia Circuit. As a result of that vacatur, coal- and oil-fired electric utility steam generating units remain on the list of sources that must be regulated under section 112 of the Clean Air Act (CAA). The EPA will develop standards under CAA section 112(d) which will reduce hazardous air pollutant emissions from this source category.
- GSE Reform Legislation Introduced. House Republican Conference Chairman Jeb Hensarling (R-TX) introduced the GSE Bailout Elimination and Taxpayer Protection Act (H.R. 1182), a bill cosponsored by House Financial Services Committee Chairman Spencer Bachus (R-AL). The proposed legislation, which is scheduled to be considered by the House Financial Services Committee during a mark-up session on April 5, would limit the conservatorship of Fannie Mae and Freddie Mac (GSEs) to two years from the date of enactment.
- Senate Banking Committee to Discuss Housing Market. On March 29, the Senate Banking Committee will hold a hearing titled, “Public Proposals for the Future of the Housing Finance System.” Witnesses are expected to include Michael Berman, Chairman, Mortgage Bankers Association; Mark Zandi, Chief Economist, Moody’s Analytics; and Janneke Ratcliffe, Senior Fellow, Center for American Progress.
- House Subcommittee to Review Dodd-Frank Implementation. On March 30, the House Subcommittee on Oversight and Investigations will hold a hearing titled, “The Costs of Implementing the Dodd-Frank Act: Budgetary and Economic.”
- House Oversight Subcommittee to Discuss TARP. On March 30, the House Oversight Subcommittee on TARP and Financial Services will hold a hearing titled, “Has Dodd-Frank ended Too Big to Fail?” Outgoing Special Inspector General for the Troubled Asset Relief Program (TARP) Neil Barfosky and Assistant Treasury Secretary Tim Massad will testify along with a panel of experts on the Dodd-Frank Act.
- House Agriculture Committee to Review Title VII of Dodd-Frank. On March 31, the House Agriculture Committee will hold a hearing titled, “Defining the Market: Entity and Product Classifications under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.” The hearing is being held at a time when the Commodity Futures Trading Commission (CFTC) is being criticized for the order in which it is issuing its proposed rules. To date, dozens of rules have been published for comment, but not a proposed rule defining the term “swap.”
- House Capital Markets Subcommittee to Review GSE Proposals. On March 31, the House Financial Services Subcommittee on Capital Markets will hold a hearing on legislative proposals on GSEs.
- House Subcommittee to Address Flood Insurance. On April 1, the House Subcommittee on Insurance and Housing will hold a hearing on the National Flood Insurance Program. This is a follow-up hearing after the Subcommittee heard from Craig Fugate, the Administrator of the Federal Emergency Management Agency on March 11 in connection with the discussion of the Flood Insurance Reform Act of 2011 (H.R.1026).
- FDIC to Hold Rulemaking Open Meeting. On March 29, the Federal Deposit Insurance Corporation (FDIC) will hold an open meeting to address whether to propose joint rules relating to credit risk retention by securitizers of asset-backed securities.
- SEC to Hold Rulemaking Open Meeting. On March 30, the Securities and Exchange Commission (SEC) will hold an open meeting to address (i) whether to propose joint rules relating to credit risk retention by securitizers of asset-backed securities; and (ii) whether to propose a new rule requiring the SEC to direct the national securities exchanges and national securities associations to adopt certain listing standards with respect to compensation committees and compensation advisers.
- CFTC to Hold Rulemaking Open Meeting. On March 30, the CFTC will hold an open meeting to address swap data recordkeeping and reporting requirements for pre-enactment and transition swaps.
- CFTC to Hold “SEF Showcase.” On March 31, CFTC Commissioner Scott O’Malia will host a “SEF Showcase” at the CFTC to explore the attributes necessary to make swap execution facilities (SEFs) successful. The event will have two primary panels – the first representing buy-side and sell-side interests, including pension funds, asset management funds, end-users and dealers. The second panel will allow sixteen electronic execution facilities to demonstrate the current functionality they offer market participants in the swaps markets.
OTHER FINANCIAL SERVICES NEWS
- TARP Recovers More than 99 Percent of Disbursements. The Treasury Department recently announced that bank repayments to the TARP Capital Purchase Program have recouped more than 99 percent of the approximately $245 billion in total funds disbursed for TARP investments. The Treasury Department estimates that bank programs within TARP will ultimately provide a lifetime profit of nearly $20 billion.
- Energy and Commerce Hearing. The Subcommittee on Health has scheduled a hearing on March 30 titled, “True Cost of PPACA: Effects on the Budget and Jobs.”
- CMMI. Senior officials from the Center for Medicare and Medicaid Innovation (Innovation Center) within the Centers for Medicare and Medicaid Services (CMS) held a conference call with stakeholders to discuss the agency’s plans to re-launch its website, introduce key staff members and answer questions from callers. The website (http://innovations.cms.gov/) provides information about the Innovation Center’s mission, its operations and the process for gathering ideas regarding new models and demonstrations to improve health care for Medicare, Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries. RFP’s are expected in the coming months, with areas of interest including ACO development, medical homes, dual eligibles (especially the Medicaid population with chronic conditions), payment bundling and population health.
- Home Health. On April 1, a new Medicare rule is set to take effect that requires beneficiaries to have a face to face visit with a doctor 90 days before or 30 days after starting home health services in order for the home health agency to get reimbursed. Medicare suggest the requirement will help curb unnecessary spending, but consumers and providers argue the new requirement creates an access barrier that will make it more difficult for patients to get needed health services. The regulation was set to be implemented January 1, but CMS granted a delay in response to stakeholder concerns. Consumers and providers are actively advocating for another delay to allow more time for outreach and education.
OTHER HEALTH NEWS
- IOM Meeting. The Committee Integrating Primary Care and Public Health has scheduled a meeting on March 28, when they will be presented with their charge as well as hear from speakers on current strategies of integration on public health and primary care.
- New Uninsured Numbers. The Centers for Disease Control and Prevention (CDC) released a report that finds there are currently almost 50 million Americans without health care insurance; up 3 million from last year. Children's coverage, however, has improved. The CDC attributes the rise to the poor economy, as most Americans' health coverage is tied to their job.
International, Defense, Homeland Security
- Middle East Developments. Following the United Nations resolution authorizing the imposition of a no-fly zone over Libya on March 17, the United States began an active military campaign along with France, England, Qatar and other NATO and Arab League nations. The apparent objective of the mission is to protect Libyan civilian and rebel forces, particularly those located in Benghazi, from attack by Gaddafi’s forces. However, Congress remains very unsure of the mission, how it will be achieved, the role to be played by the United States over time and the exit strategy.
Following President Obama’s return from his Latin America tour, which was largely dominated by developments in the Middle East, Speaker of the House John Boehner (R-OH) publicized a letter criticizing the Obama Administration’s unclear objectives in Libya and lack of consultation with Congress. Senate Republicans have been less publically critical, but Senate Foreign Relations Committee Ranking Member Richard Lugar (R-IN) has questioned the constitutionality of President Obama’s attacks on Libya without Congressional approval. However, Senators Carl Levin (D-MI), Jack Reed (D-RI) and Dick Durbin (D-IL) came to the President’s defense, as has House Minority Leader Nancy Pelosi (D-CA), though with less vigor. Secretary Clinton has been invited to testify before the House Foreign Affairs Committee on these issues when Congress is back in session the week of March 28.
With the apparent destruction of Libya’s air force and air defense system, and the announcement on March 24 that NATO was taking over command of operations against Libya, the United States seems to be attempting to extricate itself from playing a lead role in continuing to enforce the no-fly zone; though, NATO is already discussing additional steps for stopping Gaddafi’s ground forces from attacking civilians, which will likely require U.S. military power.
Meanwhile, the United States continues to play for time in responding to ongoing protests in Bahrain, Yemen and Syria, and those governments’ increasingly violent response. While the Obama Administration has criticized these governments’ actions, some members of Congress continue to call for U.S. military intervention in these countries as well, with Senators Jon Kyl (R-AZ) and Mark Kirk (R-IL) asking the Administration to publically engage the opposition parties in Syria.
- Trade Developments. President Obama’s five-day trip to Latin America included stops in Brazil, Chile and El Salvador. The President emphasized the Latin American region’s growing importance to the U.S. economy as a key market for U.S. exports and noted that his Administration “has intensified [its] efforts to move forward on trade agreements with Panama and Colombia.” Obama’s comments come on the heels of a “very successful” negotiating session last week between U.S. and Colombian officials to work out outstanding differences on the U.S.-Colombia Free Trade Agreement, which the governments signed in 2006. During that session, the U.S. government presented the Colombians with a detailed list of labor rights issues that Colombia must address before the Obama Administration will submit the U.S.-Colombia FTA to Congress for its approval. According to the office of the U.S. Trade Representative, the Colombians are scheduled to return to Washington within two weeks for further discussions.
These developments suggest that the Administration is making progress on its commitment to submit all three pending free trade agreements (Korea, Colombia and Panama) to Congress this year, a position that the Republican Leadership in the House and Senate have repeatedly urged. In the meantime, the Obama Administration continues to press for passage of the Korea-U.S. Free Trade Agreement (KORUS) by July 1, which is the date that Korea’s free trade agreement with the European Union (EU) is slated to take effect. USTR Ron Kirk and others in the Obama Administration have noted that U.S. companies risk losing market share in Korea to their European competitors if the EU deal goes into effect before KORUS.
- Repatriation Proposals. This week, House Majority Leader Eric Cantor (R-VA) expressed his support for some form of repatriation holiday, allowing U.S. multinational companies to send overseas profits to the U.S. at a reduced tax rate. Cantor argued the repatriation measure would help U.S. companies invest in U.S. operations, creating jobs for Americans. Cantor also went on to urge lawmakers to make the U.S. more competitive by lowering the corporate tax rate to “at least 25 percent.” Sen. Charles Schumer (D-NY) rebuked Cantor’s speech and said his proposals would not help U.S. small businesses. In addition, Assistant Treasury Secretary for Tax Policy Michael Mundaca indicated that the Obama Administration and Congress should pursue comprehensive reform without allowing a temporary repatriation holiday, as the holiday would be in response to a narrow group of businesses that are lobbying Congress. Mundaca noted that the 2004 repatriation holiday was intended to encourage investment in the U.S. but there is no evidence that any such investment occurred, and the holiday cost taxpayers billions in tax revenues.
- Angel Investor Tax Credit. On February 2, Senator Mark Pryor (D-AR) introduced the American Opportunity Act (S. 256), which would provide a tax credit to individuals for investing in qualified small businesses, such as companies in the advanced manufacturing, aerospace, biotechnology, clean energy and transportation sectors. The credit would be equal to 25 percent of the qualified equity investments made by the investor during the tax year with certain limitations. The bill has been referred to the Senate Finance Committee. Last year, Representative Chris Van Hollen (D-MD) introduced the Innovative Technologies Investment Incentive Act of 2010 (H.R. 5767), though his bill did not get any attention as it was introduced at the end of the 111th Congress. Treasury Secretary for Tax Policy Michael Mundaca said costs are a limiting factor in considering an “angel investor” tax credit such as the credit in Senator Pryor’s legislation. On Friday, Treasury Secretary Timothy Geithner travels to Arkansas to meet with local business leaders to discuss private sector innovation and how to stimulate hiring – that discussion may focus on an angel investor tax credit. In addition, President Obama recently made comments in support of an angel investor credit.
- Deficit Reduction. On March 18, 64 Senators wrote to President Obama to urge a broad deficit reduction effort. The Senators – 32 Democrats and 32 Republicans – are drafting legislation based on the report of the National Commission on Fiscal Responsibility and Reform, which recommended elimination of most or all tax expenditures and proposed entitlement reforms and discretionary spending cuts. Senators Mike Johanns (R-NE) and Michael Bennet (D-CO) drafted the letter and wrote to President Obama, “By approaching these negotiations comprehensively, with a strong signal of support from you, we believe that we can achieve consensus on these important fiscal issues. This would send a powerful message to Americans that Washington can work together to tackle this critical issue." The letter came a day after House Ways and Means Committee Chair Dave Camp (R-MI) announced he would like to achieve a 25 percent top marginal rate for corporations and individuals in undertaking tax reform efforts. On the same day the letter was released, the Congressional Budget Office estimated the President’s 2012 budget proposal would add approximately $2.7 trillion to the deficit over 10 years. The increased deficit would be caused primarily by the tax proposals in the budget. The Joint Committee on Taxation also released cost estimates of specific Obama budget proposals, with extension of the 2001 and 2003 tax cuts for middle-income earners estimated at $2.32 trillion over 10 years, indexing the alternative minimum tax to inflation according to 2011 criteria estimated at $683 billion and permanent extension of the tax cuts in the 2009 stimulus package (along with other tax benefits for families and individuals) estimated at $222 billion.
- Guidance on Intangibles. At a BNA luncheon in Washington, Internal Revenue Service (IRS) Deputy Associate Chief Counsel (International – Technical) Ronald Dabrowski stated the IRS is attempting to address guidance under section 367(d) that will apply to transfers of intangibles to foreign corporations, but that it is a difficult process. Corporations have called for the development of new rules in this area, particularly after an October 2010 report by the New York State Bar Association’s Tax Section that offered thoughts on possible regulatory approaches. Dabrowski said the IRS is making a push internally to come up with proposed regulations that will respond to the criticisms raised with respect to the current regulations.
- AT&T/T-Mobile Merger. On March 20, AT&T announced that it has made a $39 billion bid to purchase T-Mobile USA from Deutsche Telekom. The transaction would combine the second and fourth largest wireless providers in the country and move AT&T into the top spot over Verizon Wireless and far ahead of Sprint Nextel Corp., which would be the third largest. This deal will undoubtedly face significant scrutiny from the Federal Communications Commission (FCC), Department of Justice and Congress. In fact, Democrats – including Senate Commerce Committee Chairman John Rockefeller (D-WV), Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl (D-WI), House Energy and Commerce Communications and Technology Subcommittee Ranking Member Anna Eshoo (D-CA) – are already promising hearings. Communications and Technology Subcommittee members Ed Markey (D-MA) and Doris Matsui (D-CA) have echoed those calls, questioning the merger’s impact on consumer competition and choice. However, Committee sources acknowledge that hearings are unlikely to occur until after the companies file their application at the FCC and the Justice Department, with such filing anticipated within the next 30 days. Sprint and Clearwire have indicated their opposition to the acquisition, while Verizon has signaled that it will not oppose the deal. Various public interest groups, including Media Access Project, Free Press and the Consumers Union, have expressed strong opposition and will likely challenge the purchase. AT&T and Deutsche Telekom have begun visiting the FCC. Deutsche Telekom CEO René Obermann and AT&T's Chairman and CEO Randall Stephenson met last Wednesday with FCC Commissioners Robert McDowell, Michael Copps and Meredith Attwell Baker, according to a source close to the situation, although no ex parte notices had been filed as of Friday morning.
Industry sources speculate about how the AT&T/T-Mobile proposal may impact telecom policy at the FCC and on the Hill. T-Mobile, for example, has been a leading advocate on the need for a data roaming requirement, which has been teed up for the FCC’s April meeting. The proposed merger underscores the “immediate need for data roaming,” the Rural Cellular Association recently told Commissioners’ legal advisors during ex parte meetings last week. “The inability to negotiate commercially reasonable data roaming agreements has deterred small, rural and regional carriers from fully deploying advanced broadband networks,” the Association stated. Meanwhile, on Capitol Hill, the merger announcement may remove T-Mobile from the debate on the 700 MHz D block, where the company has advocated an auction rather than reallocation for a national public safety broadband network. Key telecom leaders, including Senate Commerce Committee Chairman Jay Rockefeller (D-WV), House Homeland Security Chairman Peter King (R-NY) and Ranking Member Bennie Thompson (D-MS), have proposed legislation mandating reallocation. Meanwhile, Maine Republican Senators Susan Collins and Olympia Snowe sent a letter to AT&T raising concern about the future of 800 T-Mobile call center employees in Oakland, Maine.
- Patent Reform. On March 30, the House Judiciary Intellectual Property, Competition and the Internet Subcommittee will hold a hearing on patent reform legislation, the American Invents Act. The hearing follows passage of the bill in the Senate on March 8. House Judiciary Committee Chairman Lamar Smith (R-TX) floated a patent reform bill last week, which is said to support the first-to-file provision in the Senate bill.
- Intellectual Property Protection White Paper. On March 15, the U.S. Intellectual Property Enforcement Coordinator (IPEC) Victoria Espinel released the much anticipated “White Paper of Intellectual Property Enforcement Legislative Recommendations.” The white paper makes policy recommendations designed to increase the effectiveness of U.S. enforcement IP efforts with regard to sentencing guidelines, increased tools for law enforcement (in particular with regard to pharmaceuticals and counterfeit drugs), the sharing of enforcement activity information with rightholders, as well as international rights of public performance among others.
- Net Neutrality. On March 15, the House Energy and Commerce Committee approved H.J.Res 37, a resolution of disapproval of FCC’s December 2010 net neutrality rule by a party line vote of 30-23. The House may pass the resolution as early as next month. The resolution faces an uphill battle in the Senate, which may not act on a companion resolution introduced by Commerce Committee Ranking Member Kay Bailey Hutchison (R-TX) until this summer. In calling the FCC’s rule an “overreach” of authority, Communications and Technology Subcommittee Chairman Greg Walden (R-OR) said “[w]e have open vibrant Internet because it has not been regulated.” He further argued that the FCC had no authority to act in this area and urged his colleagues to “keep the government out of regulating” the Internet. In opposition to the resolution, Representative John Dingell (D-MI) put it plainly, “We are wasting the time of this committee on a resolution that is not going to become law.” President Obama has stated his intention to veto any such resolution.
- Privacy. On March 10, Senate Commerce Committee Chairman Jay Rockefeller (D-WV) and Ranking Member Kay Bailey Hutchison (R-TX) sent a letter to the Senate Judiciary Committee challenging the jurisdiction of that Committee’s newly established Subcommittee on Privacy, Technology and the Law. In their letter, Commerce leaders stated, “We are concerned about the description of the Subcommittee on the Judiciary Committee website and are puzzled insofar as the jurisdiction of the Judiciary Committee.” Judiciary Committee Chairman Patrick Leahy (D-VT) and Ranking Member Charles Grassley (R-IA) have not yet responded to their colleagues. Chaired by Senator Al Franken (D-MN), the new Subcommittee’s jurisdiction focuses on “the collection, protection, use and dissemination of commercial information by the private sector” and enforcement and implementation of commercial information privacy laws and policies. Meanwhile, even as Microsoft, Google and Mozilla announce the creation of their own versions of "Do Not Track" browser technology, industry sources speculate that these self-regulation measures are unlikely to slow down efforts in Congress by regulators, and by the White House, to strengthen consumers' online privacy rights.
- Hearings. The following hearings have been scheduled:
- March 29: Senate Commerce Committee hearing on “Economic Ramifications of Cyber Threats and Vulnerabilities to the Private Sector.”
- March 30: House Judiciary Intellectual Property, Competition and the Internet Subcommittee hearing on the American Invents Act.
- March 30: Senate Homeland Security and Government Oversight hearing on, “Ten Years After 9/11: A Report for the 9/11 Commission.”
- April 12: House Communications and Technology Subcommittee hearing on spectrum. Although the witness list has not been announced, we expect advocates and opponents to testify on the reallocation of the 700 MHz D Block spectrum; voluntary incentive auctions; AWS-3 spectrum and other related issues.
- Intercarrier Compensation/Universal Service. The first in a series of workshops announced as part of the February 8 Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking seeking comment on proposals to fundamentally modernize the Commission’s intercarrier compensation (ICC) system and Universal Service Fund Reform (USF) has been scheduled for April 6. This workshop will focus on intercarrier compensation, including phantom traffic and access stimulation, an ICC framework for voice over Internet protocol (VoIP) traffic and options for developing a recovery mechanism as part of comprehensive reform. In February when the NPRM was approved, Commissioners indicated that they expect to move to an order “within a few months” after the record is complete in late May.
- CenturyLink/Qwest Merger. On March 18, the FCC conditionally approved the merger between CenturyLink and Qwest Communications. The transaction is expected to close soon after the companies have obtained their final State approval. Binding conditions approved by the FCC include: (i) establishment of a broadband adoption program for low-income consumers; (ii) increase capacity for and availability of high-speed broadband access; (iii) advancement of the Universal Service Fund reform by phasing down three forms of support designed for smaller companies, which the company currently receives from the federal Universal Service Fund; and (iv) other protections against potential transaction-related harms. The full order is available on the FCC’s website at www.fcc.gov.