| Sen. Bennett Says SEC
Should Require Cyber Security Disclosure |
10/18. Sen. Robert
Bennett (R-UT) stated that he is urging the new Securities and Exchange Commission
(SEC) Chairman, Harvey Pitt, to adopt rules requiring covered
companies to report on their preparations for cyber threats.
Sen. Bennett stated that the purpose would be to incent
companies to devote more resources to the threat, just as an
earlier similar rule caused companies to engage in Y2K
remediation efforts.
Sen. Bennett spoke on this matter at the Center for Strategic and
International Studies' (CSIS) conference titled
"Strengthening Homeland Cyberdefense". He said that
a important part of the Y2K remediation effort was the SEC's
rule requiring Y2K reporting. He related that the SEC
"said we are going to require you to reveal on your
reporting statements your level of Y2K preparedness. We will
by fiat define that as a material item that has to be
reported. And then the companies started to scramble, because
when they have to deal with the SEC, it suddenly gets
serious."
Sen. Bennett continued: "Now, I have talked to the new
Chairman of the SEC about this aspect, because once again, the
experience we have had with Y2K is that these were not sunk
costs, on which there was no return on investment."
"I have had a number of companies come to me and say,
'You know, we really grumbled and hated you with respect to
Y2K, but when we did all of the remediation, and looked at
what a much better IT system we had than before we made the
fixes, we said, we are going to get a significant return on
this investment.' If you adopt the fail and fix notion with
respect to cyber terrorism, you are going to have much higher
costs overall, than if you go in to establish the security up
front. We can get the SEC and other agencies to get people to
understand that, we will go a long way towards changing the
culture in American industry, and get the advantages that come
out of the remediation activities," said Sen. Bennett.
Sen. Bennett also spoke with reporters after the event. He
stated that he would like to see the SEC adopt rules, rather
than have the Congress impose a mandate on the SEC through
legislation. He added: "The conversations are still very
preliminary, because Harvey Pitt is just beginning to get his
feet under his desk, so we have not got anything specific
going. But, I have had the conversation with him that this is
an area where the SEC can be helpful. And he has agreed to
talk to me about it. And, we probably won't see anything
definitive out of them, maybe until sometime next year."
He added, "I am going on the Y2K precedent, that it can
be done with rulemaking. And, I will be in conversations with
the folks at the SEC to see what would make sense and how far
they can go." |
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| Sen. Bennett Promotes Cyber
Security Bill |
10/18. Sen. Robert
Bennett (R-UT) spoke in favor of S 1456,
the Critical Infrastructure Information Security Act of 2001,
a bill which he introduced, along with Sen. Jon Kyl (R-AZ). One of
the main purposes of the bill is to encourage information
sharing pertaining to cyber security issues, by removing legal
disincentives for such actions. He spoke at the Center for Strategic and
International Studies' (CSIS) conference titled
"Strengthening Homeland Cyberdefense" in Washington
DC.
The bill would provide a Freedom of Information Act
exemption for certain cyber security information provided
to certain federal agencies, including the NIPC, FCC, Justice
Department, Defense Department, and Commerce Department. The
bill would also provide an antitrust exemption for
certain collaboration on cyber security issues.
FOIA Exemption. Sen. Bennett stated that "if
information comes to the government for analysis, and then
under the Freedom of Information Act, the government reveals
that to the terrorists, that is really not too smart. So, what
we are saying is that you can share this kind of information
with the government, the Freedom of Information Act will not
apply, and the government will do its analysis, and then share
that analysis back."
"Now there are those who say to me: 'Oh! This is
terrible. The Freedom of Information Act protects the public's
right to know, and you have to prevent -- you are striking a
blow against First Amendment, and freedom, and all of the rest
of that, for the public's right to know,' said Sen. Bennett.
"The fact is, if you do not put this kind of legislation
in place, private industry will not tell the government. So,
the public is not going to get this information to know either
way. You are making absolutely no difference to the public's
access to this information. You are making a significant
difference to the analyst's right to this information."
Prospects for Passage. Sen. Bennett says that there is
wide support for the bill, but there is dispute as to how it
should be handled. He said: "Hell hath no fury like a
Congressional chairman whose jurisdiction is challenged. And,
the various chairmen of the various committees all say, 'Yes,
this is a very important issue, and I will handle it.' "
He continued that the Senate Majority Leader, "Sen.
Daschle, is struggling with how he can deal with the various
maharajas that preside over these Congressional committees.
Everyone of whom, as I say, is willing to take on the issue,
but not one of which is willing to give up any jurisdiction.
And when everybody is in charge, that means that nobody is in
charge. It has been interesting. The bill -- everybody likes
my bill -- we can't find a home for it." |
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| APEC Meeting Addresses
E-Commerce |
10/18. Representatives of the twenty-one nations
participating in the Asia Pacific Economic Cooperation (APEC)
conference Shanghai, China, issued a joint
statement. The statement expressed "confidence in the
immense potential of Information and Communications Technology
(ICT) and its applications in upgrading the welfare and living
standard of our people in the APEC region". The statement
also addressed several specific issues, including e-commerce
trade barriers, privacy, consumer protection, and closing
digital divides.
Promoting E-Commerce. The statement "endorsed the
proposal of the establishment of the APEC E-commerce Business
Alliance. Ministers also welcomed the proposal to strengthen
economic and technical cooperation in the area of E-commerce
with a view to narrowing the gap between member economies in
the application of E-commerce."
E-Commerce Trade Barriers. The statement "
recognised the growth of global electronic commerce and the
importance of a legal and policy framework which both ensures
business and public confidence and avoids unnecessarily
restrictive trade barriers while respecting national policy
objectives in order to allow E-commerce to develop its full
potential to create new opportunities for trade."
Online Privacy and Consumer Protection. The statement
"welcomed the progress made by Electronic Commerce
Steering Group (ECSG)". It also "endorsed the
proposal by the ECSG to develop APEC guidelines for online
consumer protection and noted the proposal to organize a
public/ private sector forum regarding online privacy and
E-commerce during 2002."
Digital Divides. The statement "reaffirmed
commitments to triple access to the Internet by 2005, and to
ensure that all groups within an economy have access
individually or through community- based services to the
Internet by 2010". |
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| New WTO Round |
10/18. Representatives of the twenty-one nations
participating in the Asia Pacific Economic Cooperation (APEC)
conference Shanghai, China, reaffirmed their support for a new
round of WTO trade negotiations.
See, joint
statement.
10/18. Secretary of State Colin Powell gave a speech
in Shanghai, China, in which he told his audience to
"keep investing, keep opening up avenues of opportunities
for increased trade, keep destroying barriers, let's move
quickly. We want to see China and Taiwan enter the World Trade
Organization. We need to see the next round get started or
launched; we need to keep moving forward, we need to restore
confidence in the world's economies ..." |
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| Funding for Cyber Security
Programs |
10/18. Harris Miller, President and CEO of the ITAA,
gave a speech in which he advocated a $10 Billion federal
cyber security program. He spoke at the Center for Strategic and
International Studies' (CSIS) half day conference titled
"Strengthening Homeland Cyberdefense" in Washington
DC.
He stated that "strong steps to upgrade cyber security
must be taken immediately. These efforts must be conducted as
part of critical infrastructure protection for healthcare,
utilities, transportation, telecommunications and other
critical industries. To do otherwise could leave the nation
vulnerable to cyber attacks. I personally think $10 billion in
federal spending, grants and loans is needed to get the job
done."
He continued that $2.5 Billion should be appropriated to
upgrade federal government information systems. $3 Billion in
grants should be provided to state and local governments and
other public entities to upgrade information systems. $500
Million in grants should be made available to universities to
provide more curriculum and training in information security.
Finally, Miller argued that $4 Billion in loans should be
provided to small and medium sized businesses to prepare for
cyber attacks. |
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| More News |
10/18. The temporary adjournment of the House of
Representatives, and the closing of its offices, due to
biological threats, led to the postponement of all scheduled
hearings. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet postponed its hearing titled "Transition
to Digital Television: Progress on Broadcaster Buildout and
Proposals to Expedite Return to Spectrum". The House Judiciary
Committee's Subcommittee on Courts, the Internet, and
Intellectual Property postponed its hearing titled
"Intellectual Property Litigation".
10/18. The U.S. Court
of Appeals for the District of Columbia Circuit heard oral
argument in Celtronix Telemetry v. FCC, No. 00-1400. |
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| Net Tax Moratorium Set to
Expire This Weekend |
10/18. The Senate adjourned until Tuesday, October 23,
without passing legislation to extend the existing moratorium
on Internet access taxes, and multiple and discriminatory
taxes on Internet commerce. The House passed HR 1552,
the Internet Non-Discrimination Act, by a unanimous voice vote
on October 16, extending the moratorium for two years.
Section 1101(a) of the Internet Tax Freedom Act, which was
enacted in late 1998, provides that "No State or
political subdivision thereof shall impose any of the
following taxes during the period beginning on October 1,
1998, and ending 3 years after the date of the enactment of
this Act ... (1) taxes on Internet access, unless such tax was
generally imposed and actually enforced prior to October 1,
1998 ... (2) multiple or discriminatory taxes on electronic
commerce." This moratorium expires on October 21.
As a consequence of the Senate's inaction, states will be free
to impose new Internet access taxes or multiple or
discriminatory taxes on e-commerce next week. |
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| Friday, Oct 19 |
Neither the House nor the Senate will meet.
Day two of a three day conference of the American Intellectual
Property Law Association (AIPLA). Location: Crystal Gate
Marriott Hotel, 1700 Jefferson Davis Highway, Arlington,
Virginia.
9:30 AM. The National
Association of State Boards of Education (NASBE) will hold
a press conference to release a report titled "Any Time,
Any Place, Any Path, Any Pace: Taking the Lead on e-Learning
Policy." For more information, contact Dave Griffith at
703-684-4000. Breakfast will be served at 9:00 AM. See, NASBE
release. Location: Lisagor Room, National Press Club, 529 14th
Street, NW, Washington DC. |
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| Saturday, Oct 20 |
| Day three of a three day conference of the American
Intellectual Property Law Association (AIPLA). Location:
Crystal Gate Marriott Hotel, 1700 Jefferson Davis Highway,
Arlington, Virginia. |
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| Sunday, Oct 21 |
| The moratorium on Internet access taxes, and multiple and
discriminatory taxes on Internet commerce, contained in the Internet
Tax Freedom Act will expire. |
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| Monday, Oct 22 |
Neither the House nor the Senate will be in session.
1:00 - 2:30 PM. The Electronic
Privacy Information Center (EPIC) and the Privacy
Foundation will sponsor a panel discussion on the implications
of new systems for identification and tracking on personal
privacy. The speakers will be Richard Smith (Privacy
Foundation), Robert Smith (Privacy Journal), Jeffrey Rosen
(New Republic), John Woodward (RAND), and Whitfield Diffie
(Sun Microsystems). Marc Rotenberg (EPIC) will moderate.
Location: National Press Club,
529 14th Street, NW, Washington DC. |
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| Fifth Circuit Construes
Innocent Infringer Defense |
| 10/18. The U.S.
Court of Appeals (5thCir) issued its opinion
in Dial
One v. BellSouth, a case involving the innocent
infringer defense in trademark actions. Plaintiff Dial One is
a franchise holder. Two other plaintiffs are franchisees.
BellSouth and other defendants published yellow pages and
white pages directories that listed as a franchisee an entity
that was not in fact a franchisee. Plaintiffs filed a
complaint in U.S. District Court (EDLa) against BellSouth and
others alleging infringement of the Dial One trademark in
violation of the Lanham Act. Defendants asserted the innocent
infringer defense. The District Court awarded Dial One lost
franchise fees, and awarded the franchisee plaintiffs lost
profits. The Court of Appeals affirmed. |
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