February 2012

Department of Commerce Fiscal Year 2013 Budget Request

The Department of Commerce budget makes critical investments in advanced manufacturing, innovation, entrepreneurship and competitiveness and trade promotion and enforcement to help create jobs. The nearly 5 percent increase reflects President Obama and Secretary Bryson’s commitment to encouraging U.S. manufacturing and helping more American companies sell their goods and services overseas. The fiscal year 2013 request is $8 billion and requests $2.3 billion in mandatory funding. The Department also identified $176 million in administrative savings, reflecting a strong commitment to wisely stewarding taxpayer dollars and making tough choices to prioritize programs that support the Department’s core mission areas.

Highlights of the $8 billion budget request include:

Improving research: $86 million increase over FY2012 enacted for NIST laboratories and construction of research facilities, making good on the President’s commitment to enhance funding for the scientific research that has traditionally fueled American innovation.
Spurring Innovation: The FY2013 Budget supports full access to fees for the U.S. Patent and Trademark Office (USPTO) to accelerate patent processing and improve patent quality as outlined in the America Invents Act.
Informing the Nation: $970 million for the U.S. Census Bureau to sustain critical economic data collection activities and provide businesses with key statistics; $100 million for the Economics and Statistics Administration (ESA) and the Bureau of Economic Analysis (BEA) to produce the Gross Domestic Product (GDP) to provide real-time information on the health and stability of the US economy.
Increasing Wireless Access: $47 million to the National Telecommunications and Information Administration (NTIA) to support the Administration’s efforts to free additional spectrum for commercial use, increase broadband access, and optimize other Federal agencies’ use of spectrum for radars, satellites, and public safety. NTIA, the FCC's partner in efforts to free up more spectrum for wireless broadband, also would see a slight boost in funding for 2013. The budget proposes $46.9 million for the agency, a small increase over the $45.5 million Congress appropriated for this year. The NTIA played a key role in distributing more than $4 billion in grants to spur broadband access and adoption and it is charged with continuing oversight of those grants in 2013. It also is in charge of managing the nation's spectrum holdings and is currently working to meet the president's goal of freeing up 500 megahertz in new spectrum over the next decade.

Justice Dept seeks to bolster IP enforcement team

The Obama Administration proposed hiring more prosecutors to pursue intellectual property crimes in the new budget as the entertainment industry pressures the Justice Department to crack down on copyright infringement and counterfeiting. The overall proposed 2013 budget for the Justice Department was flat, $27.1 billion in discretionary spending, with officials shuffling funds to address the biggest priorities since there is little appetite in Congress to increase spending in light of recent $1 trillion-plus deficits. Still, the Justice Department asked Congress for $5 million to hire 14 new employees, including nine attorneys, to focus on intellectual property crimes. Last year, the administration sought $3 million for six new hires but Congress refused.

DHS budget would double cyber spending to $769 million

The Homeland Security Department nearly doubled its 2013 funding request for cybersecurity in an otherwise slimmed-down budget.

There is bipartisan support for improving computer network defenses, so the outlook may be positive for obtaining much of the proposed $769 million from Congress. The funding would go toward the National Cyber Security Division for protecting federal networks and coordinating with the private sector on safeguarding critical infrastructure systems such as utility grids. In 2011, Homeland Security Secretary Janet Napolitano asked for $459 for the division. The Infrastructure Protection and Programs Directorate, which oversees the program and other cyber-related initiatives, also would be boosted from $888.2 million in estimated spending this year to $1.2 billion in fiscal 2013. By comparison, the Pentagon has asked for only a $200 million increase over last year's $3.2 billion cyber request.

Braille Under Siege As Blind Turn To Smartphones

Like a lot of smartphone users, Rolando Terrazas, 19, uses his iPhone for email, text messages and finding a decent coffee shop. But Terrazas' phone also sometimes serves as his eyes: When he waves a bill under its camera, for instance, the phone tells him how much it's worth. Terrazas is blind, and having an app to tell bills apart can be a big help. For one thing, it means he doesn't have to trust clerks to give him correct change. Terrazas' daily life is full of useful technology like this, but it also has a downside: The more he uses technology, the less he uses Braille, the alphabet of raised dots that the blind read with their fingers. Terrazas uses software that reads out loud what's on his computer screen. These days, he's slowly re-learning Braille as a student at the Colorado Center for the Blind, south of Denver.

Department of Justice Approves Google’s Acquisition of Motorola Mobility; Nortel Patent Deals

The Department of Justice’s Antitrust Division closed its investigations into Google’s acquisition of Motorola Mobility Holdings, the acquisitions by Apple, Microsoft and Research in Motion Ltd. (RIM) of certain Nortel Networks Corporation patents, and the acquisition by Apple of certain Novell patents.

After a thorough review of the proposed transactions, the Antitrust Division has determined that each acquisition is unlikely to substantially lessen competition and has closed these three investigations. In all of the transactions, the division conducted an in-depth analysis into the potential ability and incentives of the acquiring firms to use the patents they proposed acquiring to foreclose competitors. In particular, the division focused on standard essential patents (SEPs) that Motorola Mobility and Nortel had committed to license to industry participants through their participation in standard-setting organizations (SSOs).

The division’s investigations focused on whether the acquiring firms could use these patents to raise rivals’ costs or foreclose competition. The division concluded that the specific transactions at issue are not likely to significantly change existing market dynamics. During the course of the division’s investigation, several of the principal competitors, including Google, Apple and Microsoft, made commitments concerning their SEP licensing policies. The division’s concerns about the potential anticompetitive use of SEPs was lessened by the clear commitments by Apple and Microsoft to license SEPs on fair, reasonable and non-discriminatory terms, as well as their commitments not to seek injunctions in disputes involving SEPs.

Google’s commitments were more ambiguous and do not provide the same direct confirmation of its SEP licensing policies. In light of the importance of this industry to consumers and the complex issues raised by the intersection of the intellectual property rights and antitrust law at issue here, as well as uncertainty as to the exercise of the acquired rights, the division continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets. The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights.

European Commission approves acquisition of Motorola Mobility by Google

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Motorola Mobility, a developer of smartphones and tablets, by Google, the world's largest internet search and search advertising company and developer of Android, one of the most popular mobile operating systems.

The Commission approved the transaction mainly because it would not significantly modify the market situation in respect of operating systems and patents for these devices. The Commission considered whether Google would be likely to prevent Motorola's competitors from using Google's Android operating system. The Commission's investigation showed Android helps to drive the spread of Google's other services. Consequently, given that Google's core business model is to push its online and mobile services and software to the widest possible audience, it is unlikely that Google would restrict the use of Android solely to Motorola, a minor player in the European Economic Area (EEA), as compared to operators such as Samsung and HTC. Motorola, as some other market participants, holds patents that are essential for telecommunications standards to operate. Access to such "standard essential" patents is therefore crucial for players on the smartphone market. However, the Commission concluded that the proposed transaction would not significantly change the existing market situation in this respect. Finally, the Commission also examined whether Google would be in a position to use Motorola’s standard essential patents to obtain preferential treatment for its services, including search and advertising. The Commission found that Google already had many ways in which to incentivize customers to take up its services and that the acquisition of Motorola would not materially change this.

The Commission therefore concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it.

Wireless broadband a priority for Administration

Expanding wireless broadband coverage to 98 percent of Americans remains a key priority for the Obama Administration in its fiscal year 2013 budget proposal.

To help do this, President Obama has proposed a boost in funding for the Federal Communications Commission and the Commerce Department's National Telecommunications and Information Administration, two agencies leading an effort to increase the availability of spectrum needed to help expand wireless broadband to most Americans. Some of this new spectrum would come from empowering the FCC authority to auction off spectrum wheedled out of broadcasters. The Administration projects it can generate as much as $21 billion to help pay down the deficit with these auctions -- about $5 billion more than the highest estimate from Congress. The Administration is once again proposing that the FCC be given authority to impose fees on spectrum license holders, a proposal it estimates would generate $4.8 billion over the next decade. The proposal, however, has garnered little interest from Congress in past years.

President Obama Budget Shrinks U.S. Technology Spending, Promotes Savings

US government spending on information technology would decline 1.2 percent next fiscal year under a budget proposal from President Barack Obama seeking to balance investments with deficit reduction.

The technology budget calls for $78.9 billion in spending in the current fiscal year, led by Defense Department reductions, as the administration promotes savings and efficiencies in federal-data programs. It’s part of a $3.8 trillion election-year budget plan sent to Congress. “By doing more with less, the administration is driving savings across government and using those savings to reinvest in information technology and services that benefit the American people,” President Obama said in a message accompanying the proposed budget for fiscal 2013, the year starting Oct. 1. The Obama administration has been trying to hold federal IT spending steady while increasing government efficiency through the use of cloud computing and mobile devices. Information- technology expenditures rose 7.1 percent a year on average from 2001 to 2009 and “has effectively been halted” with no growth from 2009 to 2013, according to the budget. Information-technology spending includes purchasing computers, protecting government data, updating websites and hiring employees who provide technical support. The reduced expenditures in 2013 will be driven by cutting the Pentagon’s information technology investments 3.6 percent to $37.2 billion next fiscal year, according to the budget.

FCC FY 2013 Budget

The Federal Communications Commission is requesting a budget of $346,782,000 to carry out the FCC’s functions and meet the expectations of Congress. The FY 2013 budget request will be used to support the FCC's Strategic Goals.

The FCC’s FY 2013 budget submission also includes requests for funding to: (1) support Commission-wide information technology needs through improvements to the FCC’s information technology infrastructure and enhancements to the security of its systems; (2) replace obsolete signal analysis equipment with new direction finding and wireless monitoring equipment; (3) establish a framework to ensure nationwide interoperability of the 700 MHz public safety broadband wireless network; (4) provide the FCC lab with special equipment capable of simulating complex broadband systems and creating the conditions necessary for proper testing of new devices; and (5) study and support communications industry participation.

FCC Strategic Plan for FY 2012-2016

As specified in section one of the Communications Act of 1934, as amended (the Communications Act) the mission of the Federal Communications Commission (FCC) is to “make available, so far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, rapid, efficient, Nation-wide and world-wide wire and radio communication service with adequate facilities at reasonable charges.” In addition, section one provides that the Commission was created “for the purpose of the national defense” and “for the purpose of promoting safety of life and property through the use of wire and radio communications.”

The FCC’s vision is to promote innovation, investment, competition, and consumer empowerment in and on top of the communications platforms of today and the future – maximizing the power of communications technology to grow our economy, create jobs, enhance U.S. competitiveness, and unleash broad opportunity and a higher quality of life for all Americans.

Strategic Goal 1: Connect America: Maximize Americans’ access to – and the adoption of—affordable fixed and mobile broadband where they live, work, and travel.
Strategic Goal 2: Maximize Benefits of Spectrum: Maximize the overall benefits of spectrum for the United States.
Strategic Goal 3: Protect and Empower Consumers: Empower consumers by ensuring that they have the tools and information they need to make informed choices; protect consumers from harm in the communications market.
Strategic Goal 4: Promote Innovation, Investment, and America’s Global: Competitiveness Promote innovation in a manner that improves the nation’s ability to compete in the global economy, creating a virtuous circle that results in more investment and in turn enables additional innovation.
Strategic Goal 5: Promote Competition: Ensure a competitive market for communications and media services to foster innovation, investment, and job creation and to ensure consumers have meaningful choice in affordable services.
Strategic Goal 6: Public Safety and Homeland Security: Promote the availability of reliable, interoperable, redundant, rapidly restorable critical communications infrastructures that are supportive of all required services.
Strategic Goal 7: Advance Key National Purposes: Through international and national interagency efforts, advance the use of broadband for key national purposes.
Strategic Goal 8: Operational Excellence: Make the FCC a model for excellence in government by effectively managing the Commission’s human, information, and financial resources; by making decisions based on sound data and analyses; and by maintaining a commitment to transparent and responsive processes that encourage public involvement and best serve the public interest.

Benton

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