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Intellectual Property
PTO Chief Sees 50-50 Chance For Senate Patent Measure
     Legislation that would drastically alter the U.S. patent system has at least a 50 percent chance of passing in this Congress, Patent and Trademark Office Director Jon Dudas predicted during at an appearance at this week's Tech Policy Summit in Los Angeles. He said he is "much more optimistic because a very real conversation has begun." The Commerce Department spoke out against some elements of the bill in a February letter to Senate Judiciary Chairman Leahy, but "it is [the] will of the Bush administration to get this through," Dudas said. PTO officials have met with many senators and their aides in recent months and have encouraged them to support modifications to the measure. Senate Majority Leader Reid wants to bring the bill to the Senate floor in April, and stakeholders have recognized they must find a solution amenable to all business models for that to happen, Dudas said. "My sense is that we're getting closer to that," he added, contending that the focus must be how to give judges the tools to inform juries rather than mandating certain factors that would pick a winner in a patent dispute. The administration supports other portions of the bill, including a proposal for creating post-grant patent review procedures that could be an alternative to pricey litigation for those who want to challenge a patent's validity. Meanwhile, with Congress due to reconvene Monday after the Easter recess, the patent lobbying blitz continued -- with more than 1,000 organizations signing multiple letters registering their displeasure with provisions of the Senate bill. The Coalition for Patent Fairness, which has championed the legislation, sent about the same number of letters from their supporters.

Telecommunications
Comcast, Bit Torrent Agree To Network Management Deal
     Arch rivals Comcast and BitTorrent, which have sparred for months over allegations that the cable giant blocked customers from sharing video and music files over the BitTorrent Web site, this week formed an unlikely alliance. In a joint announcement Thursday, the companies said they are collaborating on ways to ensure that Comcast and other operators of high-speed Internet systems can manage traffic flow on their networks without impeding bandwidth-heavy applications, such as those offered by BitTorrent. Their dispute has helped to fuel so-called network neutrality legislation, which House Energy and Commerce Telecommunications and the Internet Subcommittee Chairman Edward Markey, D-Mass., introduced in February to prevent broadband providers from acting as content gatekeepers. "I intend to monitor the ongoing discussions to see if they result in a material change in Comcast's controversial network management techniques," Markey said. While encouraged by the announcement, he noted that Comcast has not signaled that the FCC retains authority to intervene in this area, and warned that the discussions may only have a limited impact. FCC Chairman Kevin Martin, a Republican, expressed similar concerns. But another Republican FCC member, Robert McDowell, said that the arrangement demonstrates that Internet governance "has to be all about reaching private agreement." The development underscores that "everyone has a responsibility when it comes to network congestion," he said.

Telecommunications
Lawsuit Seeks To Stop Sale Of DTV Converter Boxes
     Low-power television broadcasters Wednesday asked a federal court to direct the FCC to prohibit the sale and marketing of converter boxes that enable older sets to display over-the-air digital signals -- but not analog signals. In a lawsuit filed with the U.S. Circuit Court of Appeals for the District of Columbia, the Community Broadcasters Association said judicial action is "exceptionally urgent" because the Commerce Department has launched a coupon program to help Americans buy converters to ease the Feb. 17, 2009 shift to digital transmission. Most of the voucher-eligible devices block the analog format. CBA, the trade group representing low-power TV stations, argued the FCC is violating the All Channel Receiver Act that mandates that TV devices permit the viewing of all available stations: It noted that full-power stations switching to digital comprise only one-fifth of the nation's broadcasters; the remaining four-fifths are low-power and related outlets that will operate in analog for years to come. Government officials and representatives of full-power broadcasters and electronics manufacturers have accused the CBA of raising its concerns at the eleventh hour. CBA has countered that its views were ignored during the planning stages because it does not have significant lobbying and financial muscle in Washington.

Telecommunications
Sirius-XM Deal Clears Justice Dept.; FCC Decision Next
     The Justice Department Monday cleared Sirius Satellite Radio's estimated $14 billion merger with rival XM, finding that the proposed pairing is not likely to substantially lessen competition or harm consumers. The department's Antitrust Division said evidence did not show that the merger would let the parties hike subscription prices, partly because they do not compete in important segments of the market. It also cited the widespread availability of alternative services such as Internet radio and iPods. Sirius and XM each obtained stockholder approval in November 2007 and the deal is still subject to FCC approval. Justice Department Antitrust Division chief Thomas Barnett defended his agency's approval of the merger, saying in a conference call with reporters that there was insufficient proof that consumers would be harmed and rejected claims that it would result in a government-sanctioned monopoly. Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., said in a statement that he was "very disappointed" with the news, adding that elimination of competition between the two providers was "contrary to antitrust law and the interests of consumers." He urged the FCC to block the deal. Rep. Steve Chabot, R-Ohio, a member of the House Judiciary Committee, said he believed the issues of protecting consumers while facilitating free-market ideals were "thoroughly addressed" in the Justice Department's review. Analysts for investment firm of Stifel Nicolaus said they believe Sirius and XM will win FCC clearance, but they anticipate a series of conditions to be imposed "in a process that could still take a number of weeks."

Employment
Business Coalition Steps Up Campaign For More H-1Bs
     Compete America, a coalition of businesses seeking more high-skilled work visas, this week began distributing mock H-1B lottery cards to Capitol Hill offices to call attention to the Homeland Security Department's system for meting them out. DHS will begin accepting H-1B applications for FY09 this coming Tuesday, and industry analysts expect the demand on that day to far exceed the 65,000 slots available. DHS officials have instituted a lottery system to handle the influx of applications. "Just how random a lottery is this? It is a lottery that gives no weight to the industries that participate, whether they are high-tech or high fashion," asked Oracle Vice President of Government and Public Affairs Robert Hoffman, who also is the co-chairman of Compete America. "It is a lottery that does not allow companies to use the limited visas they are awarded for their preferred applicants." Compete America is focusing its lobbying on House members who are negotiating a stopgap immigration package that would address a number of immigration-related issues, including H-1B shortages, a lack of low-skilled H-2B visas, and the current undocumented population. Several members of Congress have introduced legislation that only addresses the high-skill visa shortage; a bill introduced earlier this month by Rep. Lamar Smith, R-Texas, would triple the number of H-1B visas available each year from 65,000 to 195,000. But key lawmakers have said other immigration-related provisions, including increased enforcement measures, must be included. Meanwhile, organized labor opposes any increase in H-1B visas, arguing that the unemployment rate among U.S. technicians has not fallen.

Budget
Bipartisan Group Urges Boost In Science Funding
     A bipartisan group of senators last week wrote to leaders of the Senate Appropriations Committee urging them to add $350 million for science programs to the upcoming FY08 war supplemental spending bill. The letter was spearheaded by Senate Energy and Natural Resources Chairman Bingaman and ranking member Pete Domenici, R-N.M. "We strongly believe that it is necessary to provide critically needed research funding immediately to avoid unintended and permanent damage to our critical scientific infrastructure and our standing in the world as the leader in science," the senators wrote.
     Also signing the letter were Senate Republican Conference Chairman Lamar Alexander and GOP Sen. Bob Corker, both of Tennessee, as well as Senate Majority Whip Durbin; Senate Rules Chairwoman Feinstein; Senate Health, Education, Labor and Pensions Chairman Kennedy and Senate Democratic Conference Vice Chairman Charles Schumer of New York. Their letter specifically requests that $250 million be allocated to the Energy Department's Office of Science to keep up the United States' commitment to the International Thermonuclear Experimental Reactor project, retain the Fermi National Laboratory in Illinois as "the nation's premier high physics facility," and help other Energy Department laboratories around the country continue their research. The remaining $100 million would go to the National Science Foundation.

Homeland Security
Airline Industry, DHS Tangle Over Fingerprint Regulations
     The Homeland Security Department and the airline industry are at odds over a key national security program, sparking fears that travel out of the United States could be disrupted -- while placing in jeopardy the ability of the U.S. government to meet a looming congressional mandate. The department is on the verge of issuing a rule that would require airlines to take the fingerprints of most foreigners leaving the country via air. The rule is intended to fulfill a requirement of the US-VISIT program that biometrics be used to verify when foreigners leave the country. DHS expects to issue the rule by mid-April, according to Robert Mocny, director of the VISIT program. The airlines strongly oppose such a mandate and the industry has been lobbying OMB to either significantly alter or kill the plan. The airlines argue that the job of verifying when foreigners leave the country is an inherently governmental task. They say it could cost them billions to upgrade their information technology systems and cause flight delays. However, a law enacted last year requires DHS to have a system in place by June 30, 2009 at airports to verify the departure of at least 97 percent of foreigners. In their lobbying efforts, airline industry officials argue Congress never specified private companies should do the fingerprint collection. Their concerns appear to be gaining traction on Capitol Hill. In a letter to Homeland Security Secretary Chertoff last week, House Homeland Security Chairman Thompson and Homeland Security Border Subcommittee Chairman Loretta Sanchez, D-Calif., said that the "potential delegation of inherently governmental responsibilities to the air carriers is troubling."

Crime
Action Urged On Bill Targeting Child Internet Crimes
     Proponents of a bill that would create a special counsel within the Justice Department to coordinate child-exploitation cases and improve agency-funded Internet Crimes Against Children task forces are trying to add it to the Senate Judiciary Committee's crowded agenda. Sens. Joseph Biden, D-Del., and Barbara Boxer, D-Calif., introduced the legislation in June and have recruited more than a dozen co-sponsors. A companion bill passed the House in the fall with some other child-protection measures. A Democratic Senate aide said a hearing of the Judiciary Crime Subcommittee, which Biden chairs, is scheduled for April 16. The measure would more than double funding for forensic labs, federal-state efforts and law enforcement agents to fight child pornography. At the core of the proposal is technology that locates computers by their Internet protocol addresses and serial numbers, and traces who is uploading and downloading illegal images. Using the tool, law enforcers have traced child pornography to more than 570,000 computers nationwide, according to a child-safety group. Some involved with the bill are concerned that fiscal conservatives could try to block it because the legislation would authorize more than $1 billion over eight years. The bill, however, includes some key Republican cosponsors. The Justice Department has concerns, saying in a letter to Biden that the creation of a special counsel could "unnecessarily create a new level of bureaucracy."

Trade
Revised Trade Preferences Program Could Be Costly
     Renewing the major expiring trade preferences program for developing countries could carry a price tag approaching $1 billion, which would erect a budgetary hurdle to trade legislation lawmakers have not faced since the 1990s. "There's an elephant in the room and it's called pay/go," said Laura Baughman -- president of the Trade Partnership, a research firm that runs a coalition of businesses and trade groups supporting permanent renewal of the Generalized System of Preferences program. The GSP was established in 1976 to promote trade in developing nations. It has grown to provide duty-free entry for 4,650 products from 144 countries and is set to expire Dec. 31. House Ways and Means Chairman Rangel recently introduced a wide-ranging bill incorporating a two-year extension of GSP and expiring preferences for Andean and Caribbean nations. It was whittled to a 10-month extension of Andean trade preferences, which were set to expire Feb. 29. In 2007 alone, duties lifted by GSP amounted to $1 billion in savings for U.S. importers, according to Baughman's group. The last time Congress renewed the program was in December 2006, when CBO estimated the two-year extension would cost $992 million. With the cost of extending GSP and other policy issues surrounding the program, advocates worry lawmakers will not do much beyond a short-term extension into next year. While GSP enjoys broad bipartisan support, it does have its critics. In the 2006 bill, then-House Ways and Means Chairman Bill Thomas, R-Calif., and then-Senate Finance Chairman Charles Grassley, R-Iowa, negotiated a change with the Bush administration to the program to target benefits to poorer countries and away from more-developed nations like India and Brazil.

Trade
White House Seeks Vote By Aug. On Colombia Trade Deal
     The White House is pushing for a vote on the U.S.-Colombia free trade agreement "before the August recess," a top administration official said this week. In arguing for swift action, Commerce Undersecretary for International Trade Christopher Padilla acknowledged election-year politics are likely to swamp lawmakers when they return in September. But he said, "I don't think that it's impossible to do a trade agreement in an election year." In an interview, Padilla echoed recent comments by Trade Representative Schwab that President Bush is preparing to send the Colombia FTA implementing legislation "immediately or very shortly" after lawmakers return from the Easter recess next week. Under so-called fast-track trade negotiating authority rules, the administration would have to submit the deal to Congress no later than April 8 to ensure the 60-day clock for House action will run out by the end of July. The Senate would have another 30 legislative days to act. An agreement with top Democrats could yield an earlier vote, Padilla said. While House Speaker Pelosi and Senate Majority Leader Reid have not ruled out a vote on the Colombia deal, Pelosi made it clear before the recess that sending it up without leaders' assent would violate "established protocol." In response, Padilla said that "I think we've...shown that we would leave no stone unturned" to try to strike a bipartisan agreement, including expanding the Trade Adjustment Assistance program for laid-off workers. While deferential to Democrats, Padilla was not as charitable toward the AFL-CIO, which opposes the Colombia deal because of violence toward union officials there.

Trade
Key Legislators Urge White House To Take Steps Vs. China
     Top House Democrats this week upped the pressure on the White House to do something about China's currency manipulation, which critics argue has opened the United States to a flood of cheap imports, swollen the trade deficit and sent jobs overseas. "At this time of economic insecurity, American workers, farmers and businesses can ill afford to allow China to continue to undervalue its currency," House Ways and Means Chairman Rangel, Ways and Means Trade Subcommittee Chairman Sander Levin, D-Mich., and 13 other panel Democrats in a letter to President Bush. They added: "We recognize that the Administration has engaged in 'quiet diplomacy' for the past four years in an attempt to address this problem. But we respectfully suggest that this approach has failed." The letter outlines five steps the administration should take, including a firmer hand at the International Monetary Fund; encouraging the World Trade Organization to intervene; negotiating with other countries impacted by China's devalued currency; and enforcing existing trade and exchange rate laws. Rangel and Levin did not rule out legislation. The letter came as Treasury Secretary Paulson is headed to China next week to discuss economic issues with the newly appointed leadership there. The administration has said continued diplomacy is the best course, and has warned against Congress getting involved. In an interview, Commerce Undersecretary for International Trade Christopher Padilla said legislation could prove unworkable and that punitive action might invite retaliation, particularly given the dollar's weakness. On the other end of the spectrum, some critics complain that the Democrats have threatened legislation in the past -- but never followed through.