12/9. The House amended and approved S 1608, the "Undertaking Spam, Spyware, And Fraud Enforcement With Enforcers beyond Borders Act". This title renders the near acronym of US SAFE WEB Act. The Senate then approved the House version of the bill. It is now ready for President Bush's signature.

The bill increases the investigatory and information sharing powers of the Federal Trade Commission's (FTC). The bill will, among other things, enhance the FTC's ability to fight online fraud.

Legislative History. Sen. Gordon Smith (R-OR) introduced this bill on July 29, 2005. The Senate Commerce Committee approved this bill on December 15, 2005, with little discussion. See, story titled "Senate Commerce Committee Approves Bill to Expand FTC Powers to Pursue Online Fraud" in TLJ Daily E-Mail Alert No. 1,274, December 16, 2006.

The Senate approved its version of the bill on March 16, 2006, by unanimous consent. Neither the House Commerce Committee (HCC), nor any of its subcommittees, held a hearing or markup of this bill. The House approved an amendment in the nature of a substitute offered by Rep. Joe Barton (R-TX), the Chairman of the HCC, without debate, or roll call vote. On December 9, 2006, the Senate approved the bill, as amended by the House, by unanimous consent.

During the House of Representative's quick consideration Rep. Dennis Kucinich (D-OH) asked Rep. Barton, "Would you like to, for the benefit of those of us who aren't familiar with it, just give a couple-sentence summary that elaborates a little bit?"

Rep. Barton responded that "This is just a bill on spam and enforcement of antispam and spyware, things of this sort. The bill would provide additional authority to the FCC to investigate spam that originates overseas and fraudulent practices of that sort." The House then approved the bill.

Rep. Barton wrote in his extended remarks that "The issue is important because fraud perpetrated against our citizens increasingly originates or is committed outside the U.S: the Federal Trade Commission reports 20% of the complaints it received are ``cross-border´´ fraud complaints. Under current law, there is little the FTC can do to stop or prosecute a perpetrator outside the U.S."

He added that "The Safe Web Act will make two significant changes to help stop the fraud and protect consumers. First, it amends the FTC Act definition of “unfair or deceptive acts or practices” to include acts or practices involving foreign commerce. Second, it allows the FTC to share information and cooperate with foreign governments to investigate and take action on fraud complaints consistent with existing law enforcement practices."

Reaction. FTC Chairman Deborah Majoras wrote in a statement [PDF] that "Congress has taken an important step in the fight to combat cross-border fraud by passing the US SAFEWEB Act. Just as today's marketplace has gone global, so have scams and deception. Scammers cannot hide behind foreign borders to escape FTC law enforcers. I appreciate this congressional initiative to provide the Commission with useful tools that enhance our ability to bring law enforcement actions."

The Center for Democracy and Technology (CDT) wrote in its web site that this bill "will help the Federal Trade Commission be more effective in protecting consumers from spam, spyware, and Internet fraud on a global scale. The bill allows the FTC and its foreign counterparts to share confidential information and obtain investigative assistance from one another. CDT has long been supportive of this measure given the increasingly international nature of Internet crime."

Summary of the Bill. This bill increases the FTC's statutory authority in many ways. It will enable the FTC to more effectively pursue fraud, and especially online fraud, that crosses national boundaries.

While Rep. Barton and others have focused on the bill's application to spam, spyware and other internet based activity, this bill extends FTC authority in other areas as well. However, many of the new powers do not apply to antitrust investigations.

Section 5 of the FTC Act , which is codified at 15 U.S.C. § 45, is the provision that the FTC usually relies upon in actions against perpetrators of fraud. It currently provides, in part, that "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful"

The bill would expand the definition of "unfair or deceptive acts or practices" to include "acts or practices involving foreign commerce that -- (i) cause or are likely to cause reasonably foreseeable injury within the United States; or (ii) involve material conduct occurring within the United States."

The bill would also add a new subsection to 15 U.S.C. § 46, which pertains to "Additional powers of Commission". The new subsection 46(j) is titled "Investigative Assistance for Foreign Law Enforcement Agencies". It enumerates numerous powers to assist foreign agencies, including the conducting of investigations in the US. However, these new powers do not apply to common carrier activities, or to foreign governments that assist terrorists.

The bill also adds a new subsection 46(k) that authorizes the sharing of information with domestic and foreign criminal enforcement agencies when the FTC has "evidence that any person, partnership, or corporation, either domestic or foreign, has engaged in conduct that may constitute a violation of Federal criminal law".

The bill also amends 15 U.S.C. § 57b-2, which pertains to "Confidentiality". It amends subsection 57b-2(b)(6) to provide broader sharing of information with foreign agencies investigating such things as "fraudulent or deceptive commercial practices" and "foreign criminal laws".

Section 57b-2 currently contains a Freedom of Information Act (FOIA) exemption for FTC investigation information. The bill maintains the basic exemption: "Any material which is received by the Commission in any investigation, a purpose of which is to determine whether any person may have violated any provision of the laws administered by the Commission, and which is provided pursuant to any compulsory process under this Act or which is provided voluntarily in place of such compulsory process shall not be required to be disclosed under section 552 of title 5, United States Code, or any other provision of law, except as provided in paragraph (2)(B) of this section."

It then expands the exemption to include information acquired from foreign sources, including "any material obtained from a foreign law enforcement agency or other foreign government agency, if the foreign law enforcement agency or other foreign government agency has requested confidential treatment, or has precluded such disclosure under other use limitations, as a condition of providing the material".

Stored Communications Act. The bill also creates a new section of the FTCA titled "Confidentiality and Delayed Notice of Compulsory Process for Certain Third Parties".

The bill provides that "The procedures for delay of notification or prohibition of disclosure under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18, United States Code, including procedures for extensions of such delays or prohibitions, shall be available to the Commission ..." (Parentheses in original.)

Chapter 121 of Title 18 is the Stored Communications Act (SCA).

The SCA provides, at 18 U.S.C. § 2705, that the government can get from a court "an order delaying the notification required under section 2703(b) of this title for a period not to exceed ninety days". 18 U.S.C. § 2703(b) provides, in part, that "A governmental entity may require a provider of remote computing service to disclose the contents of any wire or electronic communication ..."

The bill provides that the FTC too can obtain from the court "an order delaying notification or prohibiting disclosure" if the court "finds that there is reason to believe that such notification or disclosure may cause an adverse result".

The bill continues that the service provider is immune from liability for failure to notify its customers, even liability under "contract or other legally enforceable agreement, for failure to provide notice to any person that such process has been issued".

The bill also provides that "All judicial proceedings initiated by the Commission under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.), chapter 121 of title 18, United States Code, or this section may be brought in the United States District Court for the District of Columbia or any other appropriate United States District Court." That is, the FTC is free to seek orders compelling disclosure of information from service providers and financial institutions in fora that are distant and inconvenient to the service providers and financial institutions.

Moreover, the bill provides that upon application of the FTC "all judicial proceedings pursuant to this section shall be held in camera and the records thereof sealed until expiration of the period of delay or such other date as the presiding judge or magistrate judge may permit".

Commentary. The new powers given to the FTC by this bill will enhance the FTC's ability to fight internet based fraud that crosses international borders.

This bill gives the FTC new powers to compel third party service providers to disclose the contents of stored wire and electronic communications, without notice to the owner of the communications, and with a gag order imposed upon the service provider. When the Congress considered related provisions in the context of extending the expiring provisions of the USA PATRIOT Act, such provisions generated opposition both within and outside of the Congress.

In contrast, there has been very little public debate or discussion of the contents of this FTC bill.

There may be many reasons for this. One may be that affected groups, Representatives and Senators have more confidence in the professionalism and integrity of the FTC than the Department of Justice (DOJ), and its Federal Bureau of Investigation (FBI).

Another explanation may be that the House and Senate Commerce Committees are more effective in exercising oversight over the FTC than the House and Senate Judiciary Committees are in exercising oversight over the DOJ and FBI. Yet another explanation may be timing. The House and Senate finally approved the FTC bill after the midterm elections, when there was less motivation to gain political advantage from opposing certain provisions of the bill.

12/8. The House approved HR 5304, the "Preventing Harassment through Outbound Number Enforcement Act", by voice vote. This bill would add a new Section 1039 to Title 18 (the criminal code) titled "Caller ID spoofing". The Senate did not approve this bill. Proponents of this legislation will begin anew in the 110th Congress.

The bill provides that "Whoever knowingly modifies caller ID information with the intent to defraud or harass another person, or to use another person's caller ID information without consent, shall be fined under this title, imprisoned for not more than five years, or both."

The bill provides that a "telephone call" means "a call made using a telecommunications service or VOIP service".

The bill also includes a law enforcement exemption. It provides that "Any lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of the United States, a State, or a political subdivision of a State, or of an intelligence agency of the United States, or any activity authorized under chapter 224 of this title." ( Chapter 224 of Title 18 pertains to protection of witnesses.)

Rep. Tim Murphy (R-PA) introduced this bill on May 4, 2006. He will return in the 110th Congress. See also, Rep. Murphy's release.

Rep. Chris Cannon (R-UT) stated during floor debate on December 8, 2006, that "In the last few years, the criminal activity known as ``spoofing´´ has been on the rise. Caller ID spoofing occurs when a person deliberately uses an incorrect, fake or fraudulent caller identification to hide their identity in order to facilitate a fraudulent telephone call and to harass, trick or further a fraudulent scheme. The victims of this activity include the legitimate owner of a caller ID or the recipient of a fraudulent telephone call, who, as a result, may divulge legitimate financial or identifying information such as credit card numbers or other financial information. Spoofing is nothing less than criminal fraud."

Rep. Cannon continued that "Spoofing technology has become more accessible to the average person, either through the purchase of Internet telephone equipment or through Web sites specifically set up to spoof. These Web sites promote spoofing as a device to commit fraud, prank phone calls and political attacks, and are used by telemarketers who are attempting to avoid the current ``do not call´´ limits."

He concluded that "This legislation will help to deter telephone fraud, to protect consumers from harassment, and to increase protection of consumers and their personally identifiable data from fraudulent telephone use."

Rep. Bobby Scott (D-VA) stated that "A misleading caller ID can enable criminals to get information that they couldn't otherwise get. It will enable people to harass. There may be, however, legitimate uses for this technology, and that is why I have to oppose the motion to suspend the rules and pass the bill at this point."

"There are a lot of people for whom it should be illegal", said Rep. Scott. "We had a hearing and we found that there are a lot of legitimate uses for this. For example, women's shelters use misleading caller ID numbers. Businesses may use a misleading caller ID number if they are calling from one line of many lines. If they want people to call back on their main line, they want to use that caller ID."

Rep. Cannon replied that the bill uses the language "defraud or harass".

Rep. Scott also said that "I was under the impression earlier today that we were going to continue negotiating this and work on it and get a decent bill next year."

Rep. Murphy explained some of the abuses of caller ID spoofing. He said that "a criminal could try to obtain personal financial information from individuals by falsely using a bank's phone number. An ex-spouse can harass a former wife or husband who has blocked calls from the ex-spouse's phone line. A pedophile could stalk a child by using a school phone number or the phone number of a friend of the child. A sexual predator could use a doctor's office phone number. Or a terrorist could make threats from a government phone number, and there is no quick way to trace that original call".

See also, story titled "House Judiciary Committee Holds Hearing on Caller ID Spoofing" in TLJ Daily E-Mail Alert No. 1,492, November 20, 2006.

12/13.  The Senate confirmed Eric Solomon to be an Assistant Secretary of the Treasury, for tax policy, on December 8, 2006. He took the oath of office on December 13. See, DOT release.

12/13. The Senate confirmed Philip Swagel to be an Assistant Secretary of the Treasury, for economic policy, on December 8, 2006. He took the oath of office on December 13. See, DOT release.

12/13. The Senate confirmed Anthony Ryan to be an Assistant Secretary of the Treasury, for financial markets, on December 8, 2006. He took the oath of office on December 13. See, DOT release.

12/13. The Senate confirmed Michele Davis to be an Assistant Secretary of the Treasury, for public affairs, on December 8, 2006. He took the oath of office on December 13. See, DOT release.

12/13. The Senate confirmed Robert Hoyt to be General Counsel of the Department of the Treasury, on December 8, 2006. He took the oath of office on December 13. See, DOT release.

12/13. Dale Hatfield was named chairman of the Spectrum Management Advisory Committee. See, NTIA release.

12/8. The Senate confirmed the nomination of John Kneuer (at right) to be Assistant Secretary of Commerce for Communications and Information -- that is, head of the National Telecommunications and Information Administration (NTIA).

12/8. The Senate confirmed Rachel Paulose to be the U.S. Attorney for the District of Minnesota for the term of four years.

12/8. The House and Senate approved HR 6111, the "Tax Relief and Health Care Act of 2006". This bill, among other things, revises and extends the research and development (R&D) tax credit, revises and extends the deduction for donation of computer technology and equipment, and extends normal trade relations status to Vietnam. The bill is now ready for President Bush's signature.

Section 104 of the bill extends and modifies the R&D tax credit that is codified at 26 U.S.C. § 41. The statute currently provides that the credit does not apply to any amount paid or incurred after December 31, 2005. The just enacted bill changes this to December 31, 2007. The just enacted bill also provides that "The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2005."

This is a two year extension. The Congress has a long history of enacting brief, and sometimes retroactive, extensions. The Congress has not yet made the R&D tax credit permanent.

The bill also increases in the rates of the Alternative Incremental Credit (AIC).

Robert Holleyman, head of the Business Software Alliance (BSA), stated in a release that "The R&D tax credit is critical to the vitality of the software industry. Now that Congress has extended the credit, BSA member companies can to continue to innovate at a pace consumers have come to expect and economies have come to rely on.  This extension will also permit more companies to perform research activities in the United States."

William Archey, head of the American Electronics Association (AEA), stated in a release that “The R&D tax credit is an important investment in the US economy and American innovation. This action was long overdue as the credit expired nearly one year ago."

He added that "By passing a strengthened version of the R&D tax credit, Congress acted to enhance US competitiveness. Because of this action, companies that were previously unable to do so can now take advantage of the R&D tax credit, and we expect this will increase US-based R&D programs. What we need is a greater predictability about the credit, and we hope the 110th Congress will pass a permanent R&D tax credit."

Phil Bond, head of the Information Technology Association of America (ITAA), praised the Congress in a release for the R&D tax credit provision.

Section 116 of HR 6111 pertains to "Corporate Donations of Scientific Property Used for Research and of Computer Technology and Equipment". It extends the deduction for donations of certain computer technology and equipment, which is codified at 26 U.S.C. § 170(e)(6), through December 31, 2007. This is a two year extension of the d eduction.

Also, HR 6111, at Sections 4001 through 4007, extends nondiscriminatory treatment to the products of Vietnam.

President Bush released a statement: "I commend the Congress for its bipartisan support for my request to approve legislation authorizing the grant of permanent normal trade relations to Vietnam. PNTR marks a significant step forward in the process of normalizing relations with Vietnam and will benefit both our nations. This designation will advance our trade and investment relations with Vietnam and ensure that the United States shares in the economic benefits generated by Vietnam's imminent membership in the World Trade Organization. Vietnam is demonstrating its strong commitment to continuing economic reforms, which will support political reform and respect for human rights. The American people welcome the remarkable transformation and economic progress in Vietnam, and we will continue to work together to strengthen our ties."

The House and Senate will next meet at 12:00 NOON on Tuesday, January 4, 2007. See, HConRes 503.

8:00 AM. The Federal Communications Bar Association (FCBA) will host a breakfast. The speaker will be John Grimes [PDF] Assistant Secretary of Defense for Networks and Information Integration / CIO. See, registration form [PDF]. Registrations and cancellations are due by 5:00 PM on December 7. The price to attend ranges from $30 to $55. Location: Mayflower Hotel, 1127 Connecticut Ave., NW.

9:00 - 11:00 AM. Day two of a two day meeting of the National Institute of Standards and Technology's (NIST) Visiting Committee on Advanced Technology. See, notice in the Federal Register: November 28, 2006, Vol. 71, No. 228, at Page 68800. Location: Employees Lounge, Administration Building, NIST, Gaithersburg, MD.

10:00 AM - 12:00 NOON. The EMC Corporation will host a panel discussion on the changes to the Federal Rules of Civil Procedure (FRCP) that took effect on December 1, 2006. The speakers will include US Magistrate Judge David Waxse (who has written opinions on electronic discovery), Thomas Allman (Mayer Brown Rowe & Maw), and Chris Panagiotopoulos (Director of Information Technology of LifeBridge Health, Inc.). Press contact: Erin Zeitler, EZeitler at outcastpr dot com or 212-905-6047. Location: Grand Hyatt Washington, 1000 H Street, NW.

10:30 AM - 12:30 PM. The National Telecommunications and Information Administration NTIA) Commerce Spectrum Management Advisory Committee will hold its first meeting. The agenda includes "(1) Discussion of Committee organization and future agendas and (2) Briefings on matters related to the President's Spectrum Policy Initiative." See, notice in the Federal Register, November 28, 2006, Vol. 71, No. 228, at Page 68808. Location: Hoover Building, Room 6059, 1401 Constitution Ave., NW.

11:00 AM - 12:00 NOON. The Federal Communications Commission's (FCC) Advisory Committee for the 2007 World Radiocommunication Conference (WRC-07 Advisory Committee) will meet. See, FCC notice [PDF] and notice in the Federal Register, November 1, 2006, Vol. 71, No. 211, at Page 64278. Location: FCC, Commission Meeting Room, Room TW-C305, 445 12th St., SW.

12:00 NOON. The Cato Institute will host a panel discussion on the book [Amazon] titled "Overblown: How Politicians and the Terrorism Industry Inflate National Security Threats, and Why We Believe Them". The speakers will include James Gilmore (former Governor of Virginia) and John Mueller (author). See, notice and registration page. Lunch will be served after the program. Location: Cato, 1000 Massachusetts Ave., NW.

2:00 - 3:15 PM. The Broadcasting Board of Governors will hold a closed meeting. See, notice in the Federal Register, December 12, 2006, Vol.71, No. 238, at Page 74485. Location: Cohen Building, Room 3321, 330 Independence Ave., SW.

TIME? The National Institute of Standards and Technology (NIST) will host a conference titled "2nd Annual NIST/USMS Telemedicine Workshop". See, notice. Location: National Institutes of Health (NIH), Natcher Center, Building 45, 9000 Rockville Pike, Bethesda, MD.

6:00 - 8:15 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled "2006 Intellectual Property Law Year in Review: 2-Part Series: Patent Law Update". The speakers will include Bradley Wright (Banner & Witcoff) and Eric Wright (Morgan & Finnegan). The price to attend ranges from $80 to $115. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

9:00 AM - 5:00 PM. Day one of a two day conference hosted by the Federal Communications Bar Association (FCBA) and the Practicing Law Institute titled "Telecommunications Policy and Regulation". See, agenda [MS Word] and registration form [MS Word]. The price to attend ranges from $1,165.50 to $1,295. The price for FCC employees is $25. Location: Washington Hilton Hotel, 1919 Connecticut Ave., NW.

RESCHEDULED FOR DECEMBER 20. 9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding the National Aeronautics and Space Administration's (NASA) request for a waiver of the FCC's Calling Party Number rules. This proceeding is CC Docket No. 91-281. See, notice in the Federal Register, November 29, 2006, Vol. 71, No. 229, at Pages 69094-69096.

9:00 AM - 12:45 PM. Day two of a two day conference hosted by the Federal Communications Bar Association (FCBA) and the Practicing Law Institute titled "Telecommunications Policy and Regulation". See, agenda [MS Word] and registration form [MS Word]. The price to attend ranges from $1,165.50 to $1,295. The price for FCC employees is $25. Location: Washington Hilton Hotel, 1919 Connecticut Ave., NW.

9:30 AM - 12:30 PM. The National Archives and Records Administration (NARA) Information Security Oversight Office's (ISOO) Public Interest Declassification Board (PIDB) will hold a meeting. See, notice in the Federal Register, December 5, 2006, Vol. 71, No. 233, at Pages 70550-70551. Location: NARA, Rooms 500 and 501, 700 Pennsylvania Ave., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) to assist the Wireless Telecommunications Bureau (WTB) in drafting a report on the ability of persons with hearing disabilities to access digital wireless telecommunications. See, FCC Public Notice [4 pages in PDF] (DA 06-2285). This proceeding is WT Docket No. 06-203.

Deadline to submit initial comments to the Office of the US Trade Representative regarding the operation, implementation and effectiveness of all trade agreements regarding telecommunications products and services to assist it in preparing its annual Section 1377 report. See, notice in the Federal Register, November 15, 2006, Vol. 71, No. 220, at Pages 66563-66564.

Hanukkah.

Effective date of the Report and Order (R&O) portion of the Federal Communications Commission's (FCC) R&O and Further Notice of Proposed Rulemaking (FNPRM) in its TV white space proceeding. This item is FCC 06-156 in ET Docket Nos. 04-186 and 02-380. The FCC adopted this item at an October 12, 2006, meeting, and released it on October 18, 2006. See, story titled "FCC Adopts Order and FNPRM Regarding TV White Space" in TLJ Daily E-Mail Alert No. 1,467, October 12, 2006, and notice in the Federal Register, November 17, 2006, Vol. 71, No. 222, at Pages 66897-66905.

1:00 - 4:00 PM. The President's National Security Telecommunications Advisory Committee (NSTAC) will hold a partially closed meeting. At 1:00 PM the NSTAC will meet in public to receive comments from government agencies, to discuss the work of the NSTAC's Emergency Communications and Interoperability Task Force (ECITF), and to discuss the work of the Telecommunications and Electric Power Interdependency Task Force (TEPITF). At 3:00 PM the NSTAC will meet in secret to discuss the Global Infrastructure Resiliency (GIR) Report. See, notice in the Federal Register, December 4, 2006, Vol. 71, No. 232, at Pages 70413. Location: U.S. Chamber of Commerce, 1615 H St., NW.

RESCHEDULED FROM DECEMBER 14. 9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding the petition for declaratory ruling filed by One Stop Financial, Inc., Group Discounts, Inc., 800 Discounts, Inc., and Winback & Conserve Program, Inc. pertaining to the AT&T tariff at issue, and "any other issues left open by the D.C. Circuit’s Opinion in AT&T Corp. v. FCC", 394 F.3d 933. This proceeding is WC Docket No. 06-210. See, FCC Public Notice [3 pages in PDF] (DA 06-2360).

Tech Law Journal publishes a free access web site and subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year. However, there are discounts for subscribers with multiple recipients. Free one month trial subscriptions are available. Also, free subscriptions are available for journalists, federal elected officials, and employees of the Congress, courts, and executive branch. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert are not published in the web site until one month after writing. See, subscription information page.

Contact: 202-364-8882.
P.O. Box 4851, Washington DC, 20008.

Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2006 David Carney, dba Tech Law Journal. All rights reserved.