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January 18, 2002
Executive Summary
Week of January 14, 2002
by Sharon McLoone

Antitrust
Justice, FTC Cancel Plans To Overhaul Antitrust Reviews
     The Justice Department and the FTC this week canceled a press conference where officials were set to announce an agreement overhauling merger-review procedures and formally dividing responsibility for antitrust investigations among specific industries. The agreement would have allocated mergers of software, media and entertainment, and telecommunications companies to Justice's Antitrust Division. The FTC would have overseen mergers of computer hardware firms, removing its jurisdiction over media and telecom issues -- and thus over mergers like the one between America Online and Time Warner, on which it took the lead. South Carolina Democrat Ernest (Fritz) Hollings, the chairman of the Senate Commerce Committee, and others on Capitol Hill had concerns about the restructuring, which led to the abrupt cancellation of the conference.

Labor
GAO Review May Bolster Criticisms Of H-1B Funding
     The General Accounting Office is analyzing Labor Department training and scholarship programs funded with fees from H-1B visas to determine where money is being allocated and what type of workers are entering the U.S. workforce through the programs. The results of the analysis may help underscore a longstanding complaint by the high-tech sector that the millions of dollars they are paying for H-1B visas are not being used in programs that would produce U.S.-born workers to replace the skilled, foreign-born workers who can join the U.S. workforce for up to six years under the visas. "Businesses have complained mightily about where the H-1B money has gone," said Sandy Boyd, assistant vice president of human resource policy at the National Association of Manufacturers and chairwoman of the high-tech and business coalition American Business for Legal Immigration.

Education
Report Highlights Weaknesses In Math, Science Education
     Almost all states have implemented education standards in math, science and other subjects, but proficiency tests in those areas show great disparity among the states, according to a survey released by the electronics trade group AeA and the Nasdaq stock market. Technology use in the classroom "has not been mined enough, and there's a lot more that can be done," AeA President William Archey said. But "we're pretty optimistic that's going to continue to improve" as states implement a new federal education reform law, he added. The new law, advocated by the Bush administration, may provide the technology industry with more opportunities to get involved in education and free some money states can use toward programs to encourage students in key subjects.

Telecom
FCC's Agenda Continues Focus On Broadband, Reform
     The FCC touted its accomplishments at a monthly meeting, but outlined a busy agenda for 2002 that includes full implementation of its reform efforts and a continued focus on high-speed Internet services. Policy challenges for the FCC's Common Carrier Bureau include developing a legal and policy framework for broadband services, such as understanding how broadband affects universal service, and further advancing competition policy. FCC Chairman Michael Powell also said the agency is focusing on a case pending at the Supreme Court, where justices are expected to decide whether to hear arguments over whether NextWave Telecom or the FCC had the rights to spectrum licenses after the firm went bankrupt and stopped payment for the licenses. He also announced that the commission approved its reorganization plan and submitted it to Congress. Congress does not have to approve the plan but can issue comments or ask the FCC to alter its plans. Lastly, the FCC renamed several bureaus to reflect consolidation or added functions.

Courts
Broadband Ruling Could Spur Deployment, Industry Says
     The Supreme Court said that federal regulators can set the rates cable companies pay to share conduits for delivering high-speed Internet services, and industry sources said the decision could be a boon to all firms, not just cable companies, that offer broadband services. Dan Brenner, the National Cable Television Association's senior vice president of law and regulatory policy, said in a statement that the ruling will benefit consumers and foster the deployment of high-speed services, especially in rural areas. "It means that utility companies cannot charge arbitrarily higher prices for cable attachments to utility poles simply because cable operators provide their customers with high-speed Internet as well as video services," Brenner said. In a dispute that questioned the nature of Internet service -- and whether it is a telecommunications or cable service -- the court ruled 6-2 that the Pole Attachments Act allows the FCC to regulate rates that cable and telecom firms pay to share conduits, such as utility poles, for delivering their services.

Taxes
WTO Panel Delivers Final Blow To U.S. Tax Break
     The end of the dispute-settlement road for the U.S. tax regime known as foreign sales corporations (FSCs) came this week, when a World Trade Organization appellate body concluded summarily that the system violates WTO rules and must be changed. "We are disappointed by the outcome," U.S. Trade Representative Robert Zoellick said. Iowan Charles Grassley, the ranking Republican on the Senate Finance Committee, noted that the bill to renew presidential trade-negotiating authority the committee approved in December contains a provision that calls for the next round of negotiations at the WTO to comprehensively address international tax issues. "So today's ruling is yet another reason why the Senate should vote by the end of February on the bipartisan trade legislation that's pending," he said.

Cyber Security
Industry Counters Criticisms Of Information-Sharing Bills
     The heads of eight technology and other industry groups seeking legislation designed to spur the disclosure of cyber-security information are pushing the Bush administration to play a more active role in supporting the measure. In a letter late last year to President Bush, the groups -- which include the U.S. Chamber of Commerce, Americans for Computer Privacy, the Information Technology Association of America, the Business Software Alliance and the National Association of Manufacturers -- attempted to counter what they termed "misunderstandings of the legislation by some critics." Groups that favor open public records and defend civil liberties have protested the pair of bills, S. 1456 and H.R. 2435, each of which would grant businesses exemptions from the Freedom of Information Act, antitrust prosecution and lawsuits that could stem from the voluntary disclosure of cyber-security information to regulatory and enforcement agencies.

Labor
Unions Prepare Attack Against Bush's Ergonomics Rule
     After several months of delays, the Labor Department is expected to announce its long-awaited position on ergonomics any day, but labor organizations are not waiting for the signal. The AFL-CIO already is preparing for battle over what is expected to be a Bush administration call for "voluntary activity." Labor groups instead had hoped for a guidance or regulation to force industry to try to prevent repetitive-stress injuries like carpal tunnel syndrome and compensate workers who develop such problems. "This is being handled as a political issue," said Peg Seminario, AFL-CIO's occupational health and safety director. "We've been trying to approach this as a safety and health issue." Labor organizations are seeking to work with Sen. John Breaux, D-La., and others on legislation that would require the department to issue a regulation within two years. The AFL-CIO also is urging labor unions and state legislatures to address the issue, and is exploring possible litigation.




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