House Subcommittee Holds Hearing on Business
Activity Taxes |
5/13. The
House Judiciary Committee's Subcommittee on Commercial and Administrative
Law held a hearing on
HR 3220,
the "Business Activity Tax Simplification Act of 2003". This bill does not
reference electronic commerce, digital products, or the internet. However, by
requiring a physical presence with the taxing jurisdiction before a business
activity tax may be assessed, the bill would protect companies, for example,
that sell products over the internet from being subjected to business activity
taxes in every taxing jurisdiction in which their customers are located.
The bill does not affect taxation of e-commerce sales, or other remote sales
or transactions.
Rep. Bob Goodlatte (R-VA),
Rep. Rick Boucher (D-VA), and
others introduced this bill on October 1, 2003. See, story titled "Reps.
Goodlatte and Boucher Introduce Bill to Limit Business Activity Taxes" in
TLJ Daily E-Mail
Alert No. 753, October 6, 2003.
Also, the two co-sponsored a similar bill in the 107th Congress. See,
HR 2526
(107th Congress) titled the "Internet Tax Fairness Act of 2001". See,
stories titled "Goodlatte and Boucher Introduce Net Tax Moratorium Bill" in
TLJ Daily E-Mail
Alert No. 229, July 18, 2001; and "House Subcommittee Approves Bill to Limit
Business Activity Taxes" in
TLJ Daily E-Mail
Alert No. 471, July 17, 2002.
The present bill, HR 3220, addresses the question of when an out-of-state
business may be assessed a tax by a state for doing business in that state.
Rep.
Goodlatte (at right) stated at the hearing that
"With the growth of the internet, companies are increasingly being able to
conduct transactions" across boundaries.
Now, however, he continued, "A growing number of jurisdictions
have sought to collect
business activity taxes on businesses located in other states, even though those
businesses receive no appreciable benefits from the taxing jurisdiction, and
even though Supreme Court has ruled that the Constitution prohibits the states
from imposing taxes on businesses that lack substantial connections to the
state. This has lead to unfairness and uncertainty, generated contentious and
widespread litigation, and hindered business expansion due to the fear of
exposure to unfair tax burdens."
Goodlatte asserted that "In order for e-commerce, and interstate commerce
generally, to continue to grow and prosper, it is imperative that clear and
easily navigable rules be set forth regarding when an out of state business is
allowed to pay business activity taxes to a state."
Rep. Goodlatte stated that HR 3220 "provides a bright line that
clarifies state and local authority to collect business activity taxes from out
of state entities which will bring predictability to an unpredictable tax
environment for businesses and states. Specifically, the bill would establish a
physical presence test".
Rep. Goodlatte is a member of the House Judiciary Committee, but not its
Subcommittee on Commercial and Administrative Law. Nevertheless, he was allowed
to participate in the hearing as a member, delivering an opening statement, and
questioning witnesses.
The bill provides that "no taxing authority of a State shall have power to
impose, assess, or collect a net income tax or other business activity tax on
any person relating to such person's activities in interstate commerce, unless
such person has a physical presence in the State during the taxable period with
respect to which the tax is imposed".
It defines business activity tax (BAT) as "(i) a tax imposed on or measured
by gross receipts, gross income, or gross profits; (ii) a business licence tax;
(iii) a business and occupation tax; (iv) a franchise tax; (v) a single business
tax or a capital stock tax; or (vi) any other tax imposed by a State on a
business for the right to do business in that State or measured by the amount
of, or economic results of, business or related activity conducted in that
State."
The bill also clarifies that the term BAT does not include a sales or transaction
tax.
The bill further provides that physical presence could be established by
"Being an individual physically within the State, or assigning one or more
employees to be in such State, on more than 21 days". However, neither
"Gathering news and covering events for print, broadcast, or other distribution
through the media", nor "Meeting government officials for purposes other than
selling goods or services" would count.
Physical presence could also be established by "Using the services of another
person ... in such State, on more than 21 days to establish or maintain the
market in that State" or "leasing or owning of tangible personal property or
real property in such State on more than 21 days".
HR 3220 would also amend
15 U.S.C. § 381,
which limits the authority of states to impose a net tax on income derived
within the state if the only business activity within the state is "sales of
tangible personal property". HR 3220 would change the references to "sales of
tangible personal property" to merely "sales". This section codifies a 1959
statute, Public Law No. 86-272.
HR 3220 is different in several respects from the previous version of the
bill, HR 2526 (107th Congress). For example, HR 2526 also contained language to
extend the internet tax moratorium. In the present Congress, this was dealt with
in a separate bill, HR 49, the Internet Non-discrimination Act", which the House
has passed.
Also, HR 3220, unlike HR 2526, lacks specific language pertaining the
internet, web sites, communications and intellectual property. HR 2526 would
have prohibited several internet related BATs, including taxes on "The use of
the Internet to create or maintain a World Wide Web site accessible by persons"
in the taxing jurisdiction. It would also have prohibited BATs on the use of an
ISP, on-line service provider, internetwork communication service provider, or
other internet access service provider, or web hosting service. It would also
have prohibited BATs on the "use of any service provider for transmission of
communications, whether by cable, satellite, radio, telecommunications, or other
similar system."
HR 2526 also would have prohibited BATs based on the "presence or use of
intangible personal property ... including patents, copyrights, trademarks,
logos, ... electronic or digital signals, and web pages ..."
While HR 3220 does not contain internet or e-commerce specific language, it
would nevertheless protect out of state businesses from many asserted bases for
the collection of business activity taxes where a physical presence is lacking.
Moreover, Rep. Goodlatte discussed the bill in terms of e-commerce and
internet activity. For example, he stated that under the "current
morass of laws" states are
asserting taxing authority "for some of the most obscure reasons". He cited as
an example, "the fact that you have a server located in the state".
This witness panel was stacked with a majority of supporters of HR 3220.
However, none were representatives of e-commerce or internet companies.
Arthur Rosen, a tax lawyer at the law firm of McDermott Will & Emery
testified in support HR 3220 on behalf of the Coalition for Rational and Fair
Taxation. He wrote in his
prepared testimony
[PDF] that "some state revenue departments have been creating barriers to
interstate commerce by aggressively attempting to impose direct taxes on
businesses located in other states that have little or no connection to their
state. Some state revenue departments have even asserted that they can tax a
business that merely has customers in the state based on the recently-minted
notion of ``economic nexus.´´"
There can be no doubt that the rapid growth of e-commerce continues to
drastically alter the shape of the American and global economies. As businesses
adapt to the "new order" of conducting business, efforts by state revenue
departments to expand their taxing jurisdiction to cover activities conducted in
other jurisdictions constitute a significant burden on the business community's
ability to carry on business. Left unchecked, this attempted expansion of the
states’ taxing power will have a chilling effect on the entire economy as tax
burdens, compliance costs, litigation, and uncertainty escalate."
Vernon Turner, the Corporate Tax Director for
Smithfield Foods, in
Smithfield, Virginia, a company
that sells ham and pork products in all 50 states, testified about a BAT shakedown by
the state of New Jersey. The state stopped one of Smithfield's refrigerator
trucks, and seized it, and its driver, and demanded that Smithfield wire the
state $150,000 for their release. Turner further testified that Smithfield has
no physical presence in the state of New Jersey, and that Smithfield contested
the seizures, and that the state of New Jersey apologized. But, he added, many
businesses would not have the resources to contest such meritless tax practices.
See, prepared
testimony.
Jamie Van Fossen, the Chair of
Iowa House Ways and Means Committee, also
testified in support of HR 3220 on behalf of the state of Iowa and the American
Legislative Exchange Council (ALEC). He stated that "This bill is about the
rights of Iowa business owners and their customers to engage in interstate
commerce free from the undue burdens associated with paying taxes in multiple
states." See,
prepared testimony.
Rick Clayburgh,
the Commissioner of the North Dakota Office of State Tax
Commission, testified on behalf of the
National Governors Association (NGA) in
opposition to HR 3220. He wrote in his
prepared testimony
that "The NGA opposes H.R. 3220 because it would unduly interfere with the
ability of states to determine and manage their own tax policies."
Clayburgh argued also that HR 3220 favors big taxpayers over small
taxpayers. He said that "big business has more resources to handle this
morass" of state business activity taxes.
Rep. Goodlatte rebutted Clayburgh on this point. He pointed out that
one large group of very small businesses that could be harmed by BATs would be
those who sell over eBay.
Clayburgh also made a statement that North Dakota would consider items other
than physical presence in determining whether to impose a BAT on a business.
Rep. Mel Watt (D-NC), the ranking
Democrat on the Subcommittee, followed up on this.
Rep. Watt asked what some of these other items are. Clayburgh enumerated none. Rep. Watt asked the question in many ways. Clayburgh provided no responsive
information. Rep. Watt asked "What is the articulable standard?" Clayburgh
articulated no standard. Finally, he stated, "economic nexus", without
providing a definition.
Rep. William Delahunt
(D-MA), was the sole member of the Subcommittee to speak against HR 3220 at
the hearing. He rebutted the assertions of Van Fossen and Rep. Goodlatte that
HR 3220 would be good for the states. He said that he has heard from
representatives of states that "hold a contrary position". He said that
among the states, this "legislation will create some winners and losers".
Rep. Delahunt also said that "I don't see this bill going anywhere". He
acknowledged that it could pass in the House, but argued that it would not pass
in the Senate. He cited the recent debate over the Internet Non-discrimination
Act (INDA). He said that this bill was held up by Republicans who are former state
governors. He did not mention Sen. Lamar
Alexander (R-TN) by name.
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House Subcommittee Holds Hearing on
Creating Fair Use Exceptions to DMCA |
5/12. The House Commerce Committee's
Subcommittee on Commerce, Trade, and Consumer Protection held a hearing on
HR 107,
the "Digital Media Consumers' Rights Act of 2003".
Rep. Rick Boucher (D-VA) and
Rep. John Doolittle (R-CA)
introduced this bill on January 7, 2003. There are now 19 sponsors, including
Rep. Joe Barton (R-TX), the Chairman
of the House Commerce Committee.
This
bill would provide fair use exceptions to the anti-circumvention
provisions of the Digital Millennium Copyright Act (DMCA). Rep. Boucher (at
left) and Rep.
Doolittle testified in support. They were joined by representatives of groups
that advocate fair use rights, and consumer electronics industry representatives. They
were opposed by representatives of various copyright industries.
The hearing was unusually long. There were three panels of witnesses, and
almost all of the members of the Subcommittee participated in at least part of
the hearing. The hearing room was packed, with attendees lined up outside the
hearing room until long after the start of the hearing. The witnesses, and some
of the members of the Subcommittee, expressed sharply
divergent views on this issue.
Rep. Joe Barton (R-TX) spoke
favorably about the bill. "We are now beginning to understand that some of the
fair uses by consumers are no longer protected because of the anti-circumvention
provision. H.R. 107 would restore the ability consumers to use copyrighted
material lawfully and would permit consumers the ability to circumvent copy
protection technology as long as it was consistent with fair use. At the same
tiem, H.R. 107 maintains the protections for copyright producers to use
copy-protection technology against illegal piracy. The balance between
consumers' rights and producers' rights over copyright material needs to be
restored to ensure our society progresses, not regresses. This legislation
accomplishes that goal and I support it."
Rep. Barton (at right)
did not specify whether the final word -- "it" -- refers to the
"legislation", or to the "goal" of the legislation. This quotation is from a written opening
statement, which Rep. Barton read early in the hearing.
Rep. Cliff Stearns (R-FL),
the Chairman of the Subcommittee holding the hearing, stated that supporters of
HR 107 argue that the DMCA "prevents consumers from making fair use of
encrypted materials. As a practical matter this means that a consumer cannot make a
copy of a DVD for his or her ``fair use.´´" In contrast, said Stearns, the
opponents of HR 107 argue that "without the prohibition against breaking
encryption, the protection for copyrighted works under current law would be weakened.
They also hold that allowing persons the ability to ``unlock´´ anti-tampering
technology and access the copyrighted material would quickly spur piracy gadgets and
technology that would quickly devalues their products and put them out of
business." He concluded that he supports "fair and balanced intellectual
property laws". See,
prepared statement.
Rep. Janice Schakowsky (D-IL),
the ranking Democrat on the Subcommittee, stated that the "DMCA was drafted with
such broad strokes that it swept away fair use". She worried that unless the Congress revisits the DMCA, then "libraries may
have to charge for services that they have traditionally provided for free".
See also, prepared
statement of Rep. John Dingell
(D-MI), the ranking Democrat on the full Committee.
DMCA Anti-Circumvention. § 1201(a)(1)(A) of the Copyright Act, which
was added in 1998 by the DMCA, provides that "No person shall circumvent a
technological measure that effectively controls access to a work protected under
this title." See, 17
U.S.C. § 1201.
Then, § 1201(a)(2)( A) provides that "No person shall manufacture, import,
offer to the public, provide, or otherwise traffic in any technology, product,
service, device, component, or part thereof, that --- (A) is primarily designed
or produced for the purpose of circumventing a technological measure that
effectively controls access to a work protected under this title;"
Furthermore, § 1201(b)(1)(A) provides that "No person shall manufacture,
import, offer to the public, provide, or otherwise traffic in any technology,
product, service, device, component, or part thereof, that --- (A) is primarily
designed or produced for the purpose of circumventing protection afforded by a
technological measure that effectively protects a right of a copyright owner
under this title in a work or a portion thereof".
HR 107. One key provision of HR 107 would amend § 1201(c)(1), which
currently provides that "Nothing in this section shall affect rights, remedies,
limitations, or defenses to copyright infringement, including fair use, under
this title."
HR 107 bill would add to this sentence the following phrase: "and it is not a
violation of this section to circumvent a technological measure in connection
with access to, or the use of, a work if such circumvention does not result in
an infringement of the copyright in the work".
Also, the bill would add to § (c) the following new subparagraph: "(5) It
shall not be a violation of this title to manufacture, distribute, or make
noninfringing use of a hardware or software product capable of enabling
significant noninfringing use of a copyrighted work."
The bill would also add to both § 1201(a)(1)(A) and § 1201(b)(1)(A) an
exception for scientific research. Specifically, the bill provides that
"Subsections (a)(2)(A) and (b)(1)(A) ... are each amended by inserting after
‘‘title’’ in subsection (a)(2)(A) and after ‘‘thereof’’ in subsection (b)(1)(A)
the following: ‘‘unless the person is acting solely in furtherance of scientific
research into technological protection measures’’."
Testimony and Debate. Jack Valenti, the P/CEO of the Motion Picture
Association of America (MPAA), testified that "H.R. 107 has one unfixable
defect: It will legalize the hacking of copy protection measures, which in turn
will make it impossible to truly protect valuable creative property."
He elaborated that once encryption is broken, once the circumvention has
taken place, you cannot restrict the copying to just one copy. In addition, he
said that there is no known device that can distinguish between a fair use
circumvention and an infringing one.
He also argued that the intellectual property industries greatly benefit the
U.S. economy. He said that these industries are creating new jobs at three times
the national rate. See,
prepared testimony.
Rep. Adolphus Towns (D-NY), a senior
member of the Committee, echoed this thought. He said that
"this is a jobs issue".
Rep. Mike Ferguson
(R-NJ) discussed the argument that consumers who buy CDs should be
able to make copies for their personal use. He asked what is different about
purchasing a car, and asking a dealer to provide a second car, for your own
personal use?
Rep. Karen McCarthy (D-MO) says that
when she wants two copies of CDs to keep at two locations, she buys two copies
of the CD. She also made the point that "what you are proposing today is ahead of the
technology to control it".
Robert Holleyman, the P/CEO of Business
Software Association (BSA), testified that creating fair use exceptions to
the anti-circumvention provisions "would swallow the rule; they would
effectively nullify section 1201. Congress rejected this proposal in 1998, and
this subcommittee should reject it now." See,
prepared testimony.
Cary Sherman, President of the Recording
Industry Association of America (RIAA), stated that "HR 107 destroys this
balance of interests and the protections Congress so carefully crafted. The
amendments contained in this bill create not merely a loophole, but an exception
that swallows the rule, leaving copyright holders and content providers with no
way to protect the works they create." See,
prepared testimony.
The Subcommittee also heard from numerous supporters of HR 107. Gary Shapiro,
P/CEO of the Consumer Electronics Industry (CEA),
stated that this bill "would restore some balance to a copyright system that has
recently been tilted to elevate the interests of media giants over those of
ordinary people". See,
prepared testimony.
Similarly, Lawrence
Lessig, a law professor at Stanford University, stated that "Congress's
zealous efforts to attack ``piracy´´ have had the unintended collateral effect of
destroying a crucial balance in copyright law. Never in the history of our
nation has the law of copyright regulated as broadly; never has it regulated as
extensively. And in light of the creative and commercial potential of digital
technologies, never has the law burdened creative work as directly or
pervasively." See,
prepared testimony.
Commerce Committee and Intellectual Property Rights. The primary
purpose of the bill is to create fair use exceptions to the anti-circumvention
provisions of the DMCA. A lesser purpose is to create an exception for certain
scientific research.. These are all amendments to the Copyright Act. This falls
within the jurisdiction of the House Judiciary Committee, and its Subcommittee
on Courts, the Internet and Intellectual Property (CIIP). Hence, this bill has also
been referred to the House Judiciary Committee.
This bill is before the Commerce Committee because Rep. Boucher drafted it
with jurisdiction in mind. He added a provision giving the
Federal Trade
Commission (FTC) authority regulate, as unfair and deceptive trade practices,
the mislabeling of DVDs. The FTC and the FTC Act lie within the jurisdiction of
the Commerce Committee.
The DVD labelling provisions of the bill were all but forgotten at the
Commerce Committee hearing, which focused almost exclusively on the intellectual
property provisions of the bill.
The Commerce Committee has a history of aggressively defending and expanding
its authority. This has led to turf fights with the Judiciary Committee. See for
example, story
titled "House Commerce and Judiciary Committees Vie for High Tech Leadership",
June 15, 1999.
Neither the House Judiciary Committee, nor its CIIP Subcommittee, have held a
hearing or markup for this bill. Rep. Boucher is also a member of the CIIP
Subcommittee, as is Rep. Zoe Lofgren
(D-CA), who is a cosponsor of HR 107. However,
support for this bill is limited at the CIIP Subcommittee, which is more
concerned with holding hearings on, and marking up, bills that further protect
intellectual property in digital media.
Related Stories. See, story titled "Reps. Boucher and Doolittle
Introduce Digital Fair Use Bill" in
TLJ Daily E-Mail
Alert No. 582, January 14, 2003, and
stories
titled "Reps. Boucher and Doolittle Introduce Digital Media Consumer Rights Act"
and "Summary of the Digital Media Consumer Rights Act" in
TLJ Daily E-Mail
Alert No. 532, October 4, 2002.
See also,
speech
by Rep. Boucher of March 6, 2001, and story titled "Boucher Proposes Changes to
Copyright Law" in
TLJ Daily E-Mail Alert No. 138, March 7, 2001.
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Rep. Barton Addresses Spyware |
5/12. Rep. Joe Barton (R-TX),
the Chairman of the House Commerce
Committee, used the occasion of the hearing on
HR 107 to
once again express his views on the topic of spyware.
He stated that "Two weeks ago during a hearing before this
subcommittee, I made my intentions know regarding spyware. I object strongly to
any company invading my computer -- invited -- and planting software or other
tracking device to spy on me. My computer is my property, no different than my
home. I determine who I permit to enter, how long they can stay, and what they
can do while they are in my home. Anyone who enters my house uninvited and
without my knowledge is trespassing, at the least, and possibly breaking
and entering."
There are several bills pending in the Congress that reference spyware.
First, there is
HR 2929,
the "Safeguard Against Privacy Invasions Act", introduced by
Rep. Mary Bono (R-CA) and
Rep. Adolphus Towns (D-NY) on July 25,
2004. See also, story titled "Rep. Bono Introduces Spyware Bill" in
TLJ Daily E-Mail
Alert No. 706, July 29, 2003.
Second, there is
HR 4255,
the "Computer Software Privacy and Control Act'", introduced by
Rep. Jay Inslee (D-WA) on April 30,
2004.
Third, there is
S 2145,
the "Software Principles Yielding Better Levels of Consumer Knowledge
Act", or "SPY
BLOCK Act", introduced by Sen. Conrad Burns
(R-MT) on February 27, 2004. See also, story titled "Senators Introduce Anti-Spyware
Bill" in TLJ Daily
E-Mail Alert No. 847, March 2, 2004.
Also, there is
HR 4077,
the "Piracy Deterrence and Education Act of 2004", introduced by
Rep. Lamar Smith (R-TX) on March
31, 2004, which references spyware on peer to peer systems.
The Senate Commerce Committee
held a hearing on spyware on March 23, 2004. See, story titled "Senate
Communications Subcommittee Holds Hearing on Spyware Bill" in
TLJ Daily E-Mail
Alert No. 862, March 24, 2004.
The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer
Protection held a hearing on spyware on April 29, 2004. See,
links to prepared testimony.
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DHS Creates Data Analysis Entity |
5/13. The Department of Homeland Security
(DHS) announced in a
release that it has created an entity named the
National Visual Analytics Center (NVAC). The
DHS states that the NVAC will "provide scientific guidance and coordination for
the research and development of new tools and methods that Homeland Security has
identified as required for managing, visually representing, and analyzing
enormous amounts of diverse data and information."
The DHS adds that NVAC projects are "all related to analysis of enormous,
dynamic and complex information streams that consist of structured and
unstructured text documents, measurements, images, and video data".
The DHS also stated that the NVAC "will be led by" the Department of
Energy's Pacific Northwest National Laboratory
(PNNL).
The DHS description of the NVAC bears similarities to the
Defense Advanced Research Projects Agency's
(DARPA) description of its former Information Awareness Office.
Finally, the DHS states that the NVAC will not collect data, and that it will
protect the privacy of individuals.
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Rep. Markey Introduces Data Protectionism
Bill |
5/13. Rep. Ed Markey (D-MA) introduced
HR 4366,
the "Personal Data Offshoring Protection Act of 2004". This bill is
part data privacy legislation, and part protectionist restraint on trade in
services legislation. It would prohibit entities from sending personally
identifiable information to another country, unless the FTC has certified that
the country has adequate privacy protections, such as those embodied in the EU
privacy directive, or the entity receives consent from the affected individuals.
This bill is similar, but not identical, to S 2312. On April 8, 2004,
Sen. Hillary Clinton (D-NY) and
Sen. Mark Dayton (D-MN) introduced
S 2312, the
"SAFE-ID Act". See,
story
titled "Sen. Clinton Introduces Bill That Mixes Trade Protectionism and Data
Privacy" in TLJ Daily E-Mail Alert No. 876, April 14, 2003.
The Markey bill provides that "A business enterprise may transmit personally
identifiable information regarding a citizen of the United States to any foreign
affiliate or subcontractor located in a country that is a country with adequate
privacy protection, provided that the citizen has been provided prior notice
that such information may be transmitted to such a foreign affiliate or
subcontractor and has not objected to such transmission."
The bill would leave it to the Federal Trade
Commission (FTC) to certify which countries are countries "with adequate
privacy protection". It adds that "A country that has comprehensive privacy laws
that meet the requirements of the European Union Data Protection Directive shall
be certified under this section unless the Federal Trade Commission determines
that such laws are not commonly enforced within such country." Thus, the gist of
this bill is that it should be the U.S. law that U.S. entities in the U.S. must
comply with European Union law.
There are several key differences between the Clinton and Markey bills. In
each case, the Markey version imposes the more onerous requirements.
The Clinton version of the bill is vague as to whom has authority to enforce
the statute, and/or sue for violations. The Markey bill is more clear. It would
give enforcement authority to the FTC. It would also give the states authority
to sue, in federal court, for damages. It would also give any person or entity a
private right of action, in state court, for damages.
Another difference is the definition of "business enterprise". The Clinton
version defines this term as "any organization, association, or venture
established to make a profit". The Markey version defines this term to include
non-profit organizations.
Another difference is in the list of items that constitute "personally
identifiable information", or PII. The Clinton version contains many items
commonly understood as PII, such as names, addresses, and social security
numbers. The Markey version adds the phrase "any consumer transactional or
experiential information relating to the person".
HR 4366 was referred to the House
Commerce Committee. Rep. Markey is a member of the Committee, and the
ranking Democrat on the Subcommittee on Telecommunications and the Internet.
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OECD Meeting Addresses Doha and
Outsourcing |
5/14. The Organization for Economic
Cooperation and Development (OECD) held a ministers meeting in Paris,
France. Among the issues addressed were World Trade
Organization (WTO) trade negotiations, the Doha round, and offshore outsourcing.
At the conclusion of the meeting, the OECD released a
document titled "Chairman's Summary". It states that "Ministers
were determined to reach basic agreements on frameworks for key issues of the
Doha Agenda by July of this year. They shared the view that these agreements
need to build on the lessons of the Fifth WTO Ministerial Conference in Cancún
and on the work performed and the contributions made since then. They noted that
momentum has been building, and that they should take advantage of the window of
opportunity that has now opened."
The Chairman's Summary also praised the practice of outsourcing. It states
that "Ministers discussed outsourcing. In itself, outsourcing is
part of the continuing trend towards international integration, and should be
welcomed because it leads to higher productivity and real incomes. However, a
number of Ministers considered that the OECD could help to dispel fears about
this issue. Some workers, companies and communities will be adversely affected,
at least in the short term. OECD countries therefore need policies that help the
adjustment of people who are dislocated because of outsourcing or other
developments. If a smooth adjustment is not achieved, protectionist pressures
may rise."
U.S. Trade Representative (USTR)
Robert
Zoellick held a press conference after the meeting. He stated that "Doha
remains America's top trade priority", and "although
it's an election year, President Bush has instructed me to spare no effort to
try to accomplish this end." See,
transcript [PDF].
Zoellick also gave a
speech titled "A Strategic Opportunity for Trade" to the French Senate in
Paris on May 13.
Zoellick (at right) compared 1940
to 2003, and the evacuation at Dunkirk to the failure of
negotiations at Cancun. He said that "Cancún was a missed opportunity, not a
catastrophe. We lost an important chance to move the Doha agenda forward, but a
number of self-proclaimed victors soon realized they had the most to lose, and
it did not take long for the first signs of renewed interest to emerge."
He asserted that "We are regaining some momentum, but the road ahead could be
rough. Our ability to make notable progress by this summer depends principally,
in my view, on two steps: First, we need to resolve the problem of the
``Singapore Issues´´ by agreeing to focus solely on trade facilitation, the
overhaul of 50-year-old customs rules that no longer match the needs of today's
economy, much less tomorrow's; second, and most importantly, we need to
concentrate on the draft agriculture text to see if we can agree on specific
frameworks for reform. If we can break the logjam on these two critical issues,
much more could quickly flow: an agreement on frameworks for cutting industrial
tariffs and removing non-tariff barriers to the trade in goods, renewed energy
to open services markets, and agreement on how the poorer and smaller developing
countries can best participate in the global trading system."
He also said that "This bigger and more populous world marketplace is also
adjusting to rapid technological change." He discussed mobile communications,
nanotechnology, biotechnology, and pharmaceuticals.
Pascal
Lamy, the European Commissioner for Trade gave a
speech to the
OECD on May 14. He used a different metaphor. He did not reference his nation's
defeat in 1940. Rather, he said, WTO trade negotiations, including the Doha round,
are like "volcanoes"; that is, "they can be sleeping smoking or
erupting." And now, said Lamy, "the WTO volcano is smoking again".
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Zoellick Addresses IPR and Russian Accession
to WTO |
5/14. U.S. Trade Representative (USTR)
Robert Zoellick
was asked at a press conference in Paris, France about the the prospectus for Russia reaching an agreement with the
U.S. for World Trade Organization (WTO)
accession this year
Zoellick stated that he had met with
German Gref,
Russia's Minister of Economic Development and Trade, and that his staff has had
extensive discussions with Maxim Medvedkov, the Deputy Minister of Economic
Development and Trade.
Zoellick stated that "I
noted that we're having a real problem with intellectual property rights,
estimated loss at about a billion dollars a year but I'm also working on that
with Minister Fursenko, the Science and Education Minister, then we talked
through some of the services issues, some of the telecom issues." See,
transcript [PDF].
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Washington Tech Calendar
New items are highlighted in red. |
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Monday, May 17 |
The House will meet at 12:30 PM for legislative
business, and at 2:00 PM for legislative business. The House will consider
several non-technology related items under suspension of the rules. Votes will
be postponed until 6:30 PM. See,
Republican Whip Notice.
The Senate will meet at 12:00 NOON for morning hour.
At 2:00 PM it will begin consideration of
S 2400,
the Department of Defense Authorization Bill.
The Supreme Court will return
from the recess that it began on May 3.
9:30 AM. The U.S. Court Appeals
(DCCir) will hear oral argument in PanAmSat v. FCC, No. 03-1133.
Judges Edwards, Sentelle and Rogers will preside. Location: Prettyman Courthouse,
333 Constitution Ave.
12:15 PM. The Federal Communications
Bar Association's (FCBA) Online Committee will host a brown bag lunch. The speaker
will be Hillary Brill, legislative assistant to
Rep. Rick Boucher
(D-VA). RSVP to Evelyn Opany at 202 689-7163. Location:
Piper Rudnick, 1200
19th Street, NW, Suite 700.
3:00 PM. The
Senate Finance
Committee will hold a members' meeting with Mark Vaile, Australian Trade
Minister, to discuss the U.S.-Australia Free Trade Agreement. Location:
Room 211, Dirksen Building.
Day one of a three day conference of the
American Cable Association. See,
notice.
Location: Wyndham Hotel.
Deadline to submit comments to the
Office of
the U.S. Trade Representative (USTR) regarding the complaint that the USTR
submitted to the World Trade Organization (WTO)
regarding the PR China's value added tax on integrated circuits. See,
story
titled "US Complains to WTO About PR China's Tax Preference for Domestic
Producers of Integrated Circuits" in
TLJ Daily E-Mail Alert
No. 859, March 19, 2004. See also,
notice in the Federal Register (April 21, 2004, Vol. 69, No. 77, at Pages
21593 - 21594) requesting comments.
Deadline to submit reply comments to the Federal
Communications Commission (FCC) in response to its notice of proposed rulemaking
(NPRM) regarding unwanted mobile service commercial messages and the CAN-SPAM
Act. This is CG Docket No. 04-53. See,
notice in the Federal
Register, March 31, 2004, Vol. 69, No. 62, at Pages 16873 - 16886.
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Tuesday, May 18 |
The House will meet at 9:00 AM for morning
hour, and at 10:00 AM for legislative business. The House will consideration several
non-technology related items. See,
Republican Whip Notice.
8:30 AM - 3:00 PM.
George Mason University (GMU) will host
a symposium titled "Information Technology for Homeland Security". See,
agenda and
registration
pages. Location: GMU, Fairfax Campus, Dewberry Hall in the Johnson Center.
9:30 AM. The U.S. Court Appeals
(DCCir) will hear oral argument in Vista Communications v. FCC,
Nos. 01-1168 and 03-1281. Judges Edwards, Sentelle and Henderson will preside.
Location: Prettyman Courthouse, 333 Constitution Ave.
9:30 AM - 5:00 PM. The
North American Numbering Council
(NANC) will meet. See,
notice in Federal Register, April 12, 2004, Vol. 69, No. 70, at Pages
19183 - 19184. Location: Federal Communications
Commission (FCC), 445 12th Street, SW, Room TW-C305.
12:00 NOON - 1:30 PM. The
Federal Communications Bar Association's (FCBA)
Common Carrier Practice Committee will host a brown bag lunch. The topic will be
"Meet Wireline Competition Bureau Chief Bill Maher". The FCBA states
that this will be an opportunity "to hear directly from the Bureau Chief about all
the major issues facing the Bureau -- unbundled network element negotiations and the
future of the Triennial Review, the VOIP proceedings, intercarrier compensation reform,
universal service reform, and other matters". For more information, contact Matt Brill,
Jonathan Banks, or David Sieradzki, Co-Chairs of the FCBA's Common Carrier Practice Committee.
RSVP to Cecelia Burnett at 202 637-8312. Location:
Hogan & Hartson, 555 13th St., NW,
Lower Level.
1:30 - 3:00 PM. (or 2:00 - 4:00 PM?) The
Federal Communications Commission's (FCC) World RadioCommunication 2007
(WRC-07) Advisory Committee's Informal Working Group on Terrestrial and Space Science
Services will meet. See, FCC
notice
[PDF]. Location: FCC, 445 12th Street, SW, South Conference Room, 6th Floor, Room
6-B516.
9:00 AM - 4:00 PM. Day one of a two day closed
meeting of the President's National Security Telecommunications Advisory
Committee (NSTAC) to discuss "cyber-related vulnerabilities of the internet".
See,
notice in the Federal Register, April 16, 2004, Vol. 69, No. 74, at Pages
20635 - 20636. Location: undisclosed.
Day one of a two day conference hosted by the
CompTel/Ascent titled "Advancing the Business of VOIP". See,
notice.
Location: Renaissance Mayflower Hotel.
Day two of a three day conference of the
American Cable Association. See,
notice.
Location: Wyndham Hotel.
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Wednesday, May 19 |
The House will meet at 10:00 AM for legislative
business. See,
Republican Whip Notice.
9:00 AM - 4:00 PM. Day two of a two day closed
meeting of the President's National Security Telecommunications Advisory
Committee (NSTAC) to discuss "cyber-related vulnerabilities of the internet".
See,
notice in the Federal Register, April 16, 2004, Vol. 69, No. 74, at Pages
20635 - 20636. Location: undisclosed.
9:30 AM. The Senate Commerce Committee will
hold a hearing titled "From Public Service to Private Sector: Spinning the
Revolving Door for Personal Gain". The Committee's
notice
does indicate whether the scope of the hearing will encompass any of the
federal agencies that exercise authority that affects the communications or information
technology sectors. Sen. John McCain
(R-AZ) will preside. The hearing will be webcast by the Committee. Press contact:
Rebecca Fisher at 202 224-2670. Location: Room 253, Russell Building.
9:30 AM - 5:00 PM. The Federal
Communications Commission (FCC) will host an event titled "Wireless
Broadband Forum". See,
notice and agenda [PDF]. Location: FCC, Room TW-C305 (Commission Meeting Room), 445
12th Street, SW.
10:00 AM. The
House Commerce Committee's
Subcommittee on Telecommunications and the Internet will hold a hearing titled
"Competition in the Communications
Marketplace: How Convergence Is Blurring the Lines Between Voice, Video, and
Data Services". The hearing will be webcast by the Committee. See,
notice. Press contacts: Jon Tripp (Barton) at 202 225-5735 or Sean Bonyun
(Upton) 202 225-3761. Location: Room 2123, Rayburn Building.
2:00 PM. The
House Government Reform Committee's
Subcommittee on Technology, Information Policy, Intergovernmental Relations
and the Census will hold a hearing titled "Federal Enterprise Architecture:
A Blueprint for Improved Federal IT Investment & Cross-Agency Collaboration
and Information Sharing". Location: Room 2154, Rayburn Building.
2:00 - 4:00 PM.
Federal Communications Commission's (FCC) World RadioCommunication 2007 (WRC-07)
Advisory Committee's Informal Working Group on IMT-2000 and 2.5 GHz Sharing Issues
will meet. See, FCC
notice
[PDF]. For more information, contact Cecily Cohen at 202 887-5210. Location: FCC, 445
12th Street, SW, South Conference Room, 6th Floor, Room 6-B516.
Day two of a two day conference hosted by the
CompTel/Ascent titled "Advancing the Business of VOIP". See,
notice.
Location: Renaissance Mayflower Hotel.
Day three of a three day conference of the
American Cable Association. See,
notice.
Location: Wyndham Hotel.
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Thursday, May 20 |
The House will meet at 10:00 AM for legislative
business. See,
Republican Whip Notice.
9:30 AM. The
Senate Commerce Committee will
hold a hearing regarding the CAN SPAM Act. The hearing will be webcast
by the Committee. Press contact: Rebecca Fisher at 202 224-2670. See,
notice.
Location: Room 253, Russell Building.
9:30 - 10:00 AM. Federal Communications
Commission (FCC) Commissioner
Jonathan Adelstein
will host an event titled "press breakfast". RSVP to Anne Perkins (Adelstein's
Special Assistant for Legislative and Media Affairs) at 202 418-2314 by May
19. Location: FCC, 8th Floor Conference Room 1, 445 12th St., SW.
10:00 AM. The
Senate Appropriations
Committee's Subcommittee on Commerce, Justice, State, and the Judiciary
will hold another hearing on intellectual property. Location: Room 138,
Dirksen Building.
10:00 AM - 12:00 NOON. The World RadioCommunication
2007 (WRC-07) Advisory Committee's Informal Working Group 5: Regulatory Issues
will meet. Location: Boeing, Arlington, VA.
12:00 NOON. The
Congressional Internet Caucus Advisory Committee
will host a panel discussion titled "Wiretapping the Internet: Is VOIP
Different?" The speakers will be
James Dempsey (Center
for Democracy & Technology), Anthony Rutkowski (VeriSign), and Mike Warren (Fiducianet). RSVP to rsvp@netcaucus.org
or 202 638-4370. Lunch will be served. Location: Reserve Officers Association, 1st
and Constitution, NE (between the Dirksen Building and the Supreme Court).
2:00 - 4:00 PM. Several groups will hold a workshop
on the Federal Information Security Management Act (FISMA). The speakers will
include Glenn Schlarman (OMB), Drew Arenas (Verizon), Stuart Katzke (NIST), Bob Dix
(House Government Reform Committee), Mike Jacobs (SRA), Lance Hoffman (George
Washington University), Allen Paller (SANS Institute), and Werner Lippuner (Ernst
& Young). The hosting groups are the Center for
Democracy and Technology (CDT), the Council for Excellence in Government (CEG),
the Cyber Security and Policy Research Institute of George Washington University, and
the American Council for Technology. RSVP to Danielle Wiblemo at
dani@cdt.org. Location: Mayflower Hotel, Connecticut
Ave.
Deadline to submit comments to the
Department of Homeland Security (DHS)
regarding its interim rule pertaining to receiving and protecting critical
infrastructure information (CII). This rule pertains to the Homeland
Security Act's exemption to the Freedom of Information Act (FOIA) for certain
information about critical infrastructures, such as cyber security, that is
voluntarily provided to the federal government. See,
notice in the Federal Register, February 20, 2004, Vol. 69, No. 34, at
Pages 8073 - 8089. See also, story titled "DHS Announces Adoption of Rules
Implementing the Critical Infrastructure Information Act" in TLJ Daily E-Mail
Alert No. 840, February 19, 2004.
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Friday, May 21 |
The House will meet at 10:00 AM for legislative
business. See,
Republican Whip Notice.
Day one of a two day conference hosted by the
Electronic Privacy Information Center (EPIC)
titled "Freedom 2.0: Distributed
Democracy". The topics to be addressed include the reliability of electronic
voting systems, enabling public participation, government accountability,
secrecy and surveillance, Freedom of Information Act, open government
initiatives, privacy enhancing technologies, anonymity and identity, trans
border data flows, radio frequency identification (RFID), biometrics, Civil
Society, World Summit on the Information Society, United Nations Information
and Communications Technology Task Force, ICANN, and UNESCO. See,
conference web site. Location: Washington
Club, 15 Dupont Circle.
Deadline to submit comments to the Federal
Trade Commission (FTC)
for its June 21, 2004 workshop on the uses, efficiencies, and implications
for consumers associated with radio frequency identification (RFID) technology.
See, FTC web page for this
workshop, and
notice in the Federal Register, April 15, 2004, Vol. 69, No. 73, at Pages
20523 - 20525.
Extended deadline to submit comments to the Federal Trade Commission
(FTC) regarding its April 19, 2004 workshop titled "Monitoring Software on
Your PC: Spyware, Adware, and Other Software". See,
notice in the Federal Register, April 1, 2004, Vol. 69, No. 63 at Pages
17155 - 17156.
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FCC Adopts Access Charge Reform Report and
Order |
5/13. The Federal Communications Commission
(FCC) adopted, but did not release, an Eighth Report
and Order and Fifth Order on Reconsideration regarding interstate access
services provided by competitive local exchange carriers to interexchange
carriers.
The FCC released a short
release [PDF] describing this item. It states that the report and order "generally maintains the
rules adopted by the FCC in April 2001, which limited competitive LECs' access
charges to benchmark rates no higher than the rates charged by incumbent LECs,
with some exceptions."
FCC Commission Kevin Martin
stated at the meeting that "I think we have provided some really helpful
guidance to industry". He added this item will "limit regulatory arbitrage
opportunities".
The FCC's release adds that this report and order provides that
"A competitive LEC is entitled to charge the full benchmark rate if it provides
an IXC with access to the competitive LEC's own end-users", and that "The access
rate a competitive LEC charges for access components when it is not serving the
end-user should be no higher than the rate charged by the competing incumbent
LEC for the same functions".
It further states that the competing ILEC rate for a CLEC switch
"is the end office switching rate when a competitive LEC originates or
terminates calls to its end-users and the tandem switching rate when a
competitive LEC passes traffic from one carrier to another".
Finally, it states that "A pre-subscribed
interexchange carrier charge (PICC) may be imposed by a competitive LEC
qualifying for the rural exemption in addition to the rural benchmark rate if,
and only to the extent that, the competing incumbent LEC charges a PICC."
This item is FCC 04-110 in Docket No. 96-262. Victoria Schlesinger of the FCC
Wireline Competition Bureau's (WCB)
Pricing Policy Division (PPD) presented this
item to the Commission at the May 13 meeting. She can be reached at 202 418-1520 or
Victoria.Schlesinger@fcc.gov.
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FCC Adopts NPRM Regarding One Call
Notification System |
5/14. The Federal Communications Commission
(FCC) adopted a notice of proposed rulemaking (NPRM) regarding a national one
call notification system at its meeting of Thursday, May 13. On Friday, May 14,
the FCC released the
text [34 pages in PDF] of the NPRM.
This NPRM is mandated by the Pipeline Safety Improvement Act of 2002. This
was HR 3609
in the 107th Congress. It is Public Law No. 107-355.
The NPRM states that "A One Call notification
system is a communication system established by operators of underground
facilities and/or state governments in order to provide a means for excavators
and the general public to notify facility operators in advance of their intent
to engage in excavation activities. One Call Centers, which cover different
geographic areas, are generally accessed by dialing a toll-free or local
telephone number. Our objective in initiating this proceeding is to assess
possible abbreviated dialing arrangements to use to access state One Call
Centers, while at the same time, seeking to minimize any adverse impact on
numbering resources."
FCC Chairman Michael Powell wrote a
separate statement [PDF], and Commissioner
Michael Copps wrote a
separate statement [PDF]. The FCC also issued a
release
[2 pages in PDF] describing this item.
Regina Brown, of the FCC's Wireline
Competition Bureau (WCB), presented this item to the Commissioners at the
May 13 meeting. She can be reached at 202 418-0792.
This NPRM is FCC 04-111 in Docket No. 92-105. Comments will be due 30 days
after publication of a notice in the Federal Register. Reply comments will be
due 45 days after publication in the Federal Register. This publication has not
yet occurred.
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FCC Affirms International Bureau's Whipsawing
Order |
5/13. The Federal Communications Commission
(FCC) adopted, but did not release, a Order on Review that affirms the FCC's
International Bureau's (IB) previous decision
that Philippine carriers had
whipsawed U.S. carriers.
On March 10, 2003 the IB issued its
Order [21 pages in PDF] in its proceeding title "In the Matter of AT&T Corp.
Emergency Petition for Settlements Stop Payment Order and Request for Immediate
Interim Relief and Petition of WorldCom, Inc. For Prevention of ``Whipsawing´´
On the U.S.-Philippines Route". This order is DA 03-581 in IB Docket No. 03-38.
The FCC's IB found that six Philippines carriers acted
collectively to demand rate increases from U.S. carriers, and retaliating
against AT&T and MCI for refusing to agree to their demand for
rate increases for termination services on their networks in the Philippines.
"Whipsawing" is a term used by the FCC to describe various
anticompetitive conduct by foreign carriers possessing market power, when the
foreign carriers exploit that market power in negotiating settlement rates with
competitive U.S. telecommunications carriers. That is, the foreign carriers
demand that a U.S. carrier pay an above cost settlement rate for terminating its
international traffic. Competitive carriers that do not agree to pay the
demanded rate, such as AT&T and MCI in this matter, have their circuits blocked.
The IB ordered U.S. carriers providing facilities based services
to suspend payments for termination services to the Philippine carriers pending
restoration of circuits. This suspension has since been lifted, because the
Philippine carriers restored circuits.
The IB also removed the Philippines from the FCC's list of
routes approved for International
Simple Resale (ISR), and required that upon restoration of the circuits U.S.
carriers comply with the FCC's International Settlements Policy (ISP) for
traffic terminated on the U.S Philippine route.
The FCC issued a
release [PDF] that describes the Order on Review adopted on May 13. It
states that the FCC affirms the IB's decision.
The release further states that "The Commission’s decision today did not
grant requests of both the Philippine and U.S. carriers to restore ISR to the
Philippines route and eliminate the requirement that U.S. carriers make payments
in accordance with the ISP. In the Commission’s recent 2004 ISP Reform Order, it
decided to eliminate the ISR policy and to remove the ISP from
benchmark-compliant routes. The question of whether the U.S.-Philippines route
is benchmark-compliant will be addressed in a public comment process as
described in the 2004 ISP Reform Order. The 2004 ISP Reform Order set out a
process by which interested parties could make public comment on those routes
that the Commission believed were benchmark-compliant but that had not been
approved as such through a public process. Because the ISR policies were
eliminated and the question of whether benchmark-compliance will be out for
public comment, the Commission today dismissed in part the Applications for
Review to the extent they requested reinstatement of ISR."
This item is FCC 04-112 in IB Docket No. 03-38. Kimberly Cook
presented this item to the Commission at its May 13 meeting. She can be reached
at 202 418-7532.
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People and Appointments |
5/11. Eric Schuppenhauer was named senior advisor to Donald
Nicolaisen, the Securities and Exchange
Commission's (SEC) Chief Accountant. See, SEC
release.
5/13. Federal Communications Commission
(FCC) Commissioner Michael
Copps introduced two new interns in his office, Laura Hendrickson
(a student at Georgetown University Law Center) and John Cascarano (a
student at the University of Michigan Law School), at the May 13 meeting of the
FCC.
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More News |
5/14. The Federal Communications Commission
(FCC) denied Entercom's Application for Review of the FCC's April 8, 2004,
Memorandum Opinion and
Order (FCC 04-89) imposing a $12,000 fine for broadcasting indecent material on a
program titled "Andy Savage Show". See also, FCC
release,
separate
statement by FCC Commissioner Kevin
Martin, and separate
statement by Commissioner
Michael Copps.
5/14. Robert Crandall, Robert Hahn, Robert Litan and Scott
Wallsten (all of the AEI-Brookings Joint Center for Regulatory Studies) released a
paper
[PDF] titled "Universal Broadband Access: Implementing President Bush’s
Vision". The paper argues that "removing price and ``unbundling´´ regulations
at the wholesale and retail levels would help increase the diffusion of
broadband. Banning Internet access taxes would be beneficial, but we believe
such a ban would be less effective than removing these regulatory barriers to
competition. We argue against subsidizing broadband to increase penetration
because subsidies are likely to result in economic inefficiencies."
5/14. The Department of Justice
(DOJ) announced in a
release "a national law enforcement initiative aimed at combating the
growing volume" of peer to peer child pormography. Attorney General
John Ashcroft stated that
the DOJ "stands side-by-side with our partners in the law enforcement community
to pursue those who victimize our children under the perceived, but false, cloak
of anonymity that the peer-to-peer networks provide." David Israelite, Chairman
of the Intellectual Property Task Force, said in a
statement that
"Today's announcement is first and foremost an important blow against child
pormography. It also sheds light on the growing problem of illegal activity
conducted using peer-to-peer computer networks, which extends beyond the
distribution of child pormography to massive theft of intellectual property."
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