7/5. The Government Accountability Office (GAO) released a report [50 pages in PDF] titled "Personal Information: Data Breaches Are Frequent, but Evidence of Resulting Identity Theft Is Limited; However, the Full Extent Is Unknown". It finds that data breaches are common, but that "most breaches have not resulted in detected incidents of identity theft".

Pending Legislation. There is no federal statute of general applicability that either mandates notification of data breaches, or preempts state statutes of the same nature. However, numerous bills have been introduced in the House and Senate. Bills pending in the current 110th Congress include the following:

• HR 1685 [LOC | WW], the "Data Security Act of 2007". Rep. Tom Price (R-GA) introduced this bill on March 26, 2007. It was referred to the House Financial Services Committee (HFSC), House Commerce Committee (HCC), and the House Oversight and Government Reform Committee.
• S 1260 [LOC | WW], the "Data Security Act of 2007".  This is the companion bill in the Senate to HR 1685. Sen. Tom Carper (D-DE) introduced this bill on May 1, 2007. It was referred to the Senate Banking Committee.
• S 239 [LOC | WW], the "Notification of Risk to Personal Data Act of 2007". Sen. Diane Feinstein (D-CA) introduced this bill on January 10, 2007. The Senate Judiciary Committee (SJC) amended and approved this bill on May 3, 2007.
• S 495 [LOC | WW], the "Personal Data Privacy and Security Act of 2007". Sen. Patrick Leahy (D-VT) introduced this bill on February 6, 2007. The SJC approved it on May 3, 2007.
• HR 958 [LOC | WW], the "Data Accountability and Trust Act". Rep. Bobby Rush (D-IL) introduced this bill on February 8, 2007. It was referred to the House Commerce Committee (HCC).
• S 1178 [LOC | WW], the "Identity Theft Prevention Act". Sen. Daniel Inouye (D-HI) introduced this bill on April 20, 2007.  The Senate Commerce Committee (SCC) amended and approved S 1178 on April 25, 2007. S 1178 includes language from S 806 [LOC | WW], the "Consumer ID Protection and Security Act", which was introduced by Sen. Mark Pryor (D-AR) on March 7, 2007. S 806 would allow consumers to freeze their credit reports. However, S 806 does not contain a data breach notification mandate. See also, story titled "Senate Commerce Committee Approves Data Breach Notification Bill" in TLJ Daily E-Mail Alert No. 1,570, April 25, 2007.

However, while there is no statute of general applicability, the GAO report notes that "federal banking regulatory agencies have issued guidance on breach notification to the banks, thrifts, and credit unions they supervise. In addition, the Office of Management and Budget has issued guidance -- developed by the President’s Identity Theft Task Force -- on responding to data breaches at federal agencies." (Footnote omitted.)

On April 30, 2007, the GAO released a report [PDF] titled "Privacy: Lessons Learned about Data Breach Notification". It pertains to loss of data by government agencies, such as the Veterans Administration's loss of a computer laptop containing personally identifiable information on approximately 26.5 Million veterans and active duty members. That report stated that "existing laws generally do not require agencies to notify affected individuals of data breaches". See also, story titled "GAO Report Addresses Data Breaches at Government Agencies" in TLJ Daily E-Mail Alert No. 1,572, May 1, 2007.

GAO Report. The just released report states that "As a result of advances in computer technology and electronic storage, many different sectors and entities now maintain electronic records containing vast amounts of personal information on virtually all American consumers. In recent years, a number of entities -- including financial service firms, retailers, universities, and government agencies -- have collectively reported the loss or theft of large amounts of sensitive personal information."

It continues that "Beginning with California in 2002, at least 36 states have enacted breach notification laws -- that is, laws that require certain entities that experience a data breach to notify individuals whose personal information was lost or stolen."

The report finds that "available evidence suggests that breaches of sensitive personal information have occurred frequently and under widely varying circumstances. For example, more than 570 data breaches have been reported in the news media from January 2005 through December 2006, according to our analysis of lists maintained by three private organizations that track such breaches. Further, a House Government Reform Committee survey of federal agencies identified more than 788 data breaches at 17 agencies from January 2003 through July 2006. Of the roughly 17,000 federally supervised banks, thrifts, and credit unions, several hundred have reported data breaches to their federal regulators over the past 2 years."

It adds that "officials in New York State -- which requires public and private entities to report data breaches to a centralized source -- reported receiving notice of 225 breaches from December 7, 2005, through October 5, 2006. Data breaches have occurred across a wide range of entities, including federal, state, and local government agencies; retailers; financial institutions; colleges and universities; and medical facilities."

The report also finds that "The extent to which data breaches result in identity theft is not well known, in large part because it can be difficult to determine the source of the data used to commit identity theft", but that "most breaches have not resulted in detected incidents of identity theft".

The GAO examined "the 24 largest breaches that appeared in the news media from January 2000 through June 2005". It found that "3 breaches appeared to have resulted in fraud on existing accounts, and 1 breach appeared to have resulted in the unauthorized creation of new accounts. For 18 of the breaches, no clear evidence had been uncovered linking them to identity theft; and for the remaining 2, we did not have sufficient information to make a determination."

The report also addresses consumer notification, which is the subject of pending bills. The report states that "Requiring consumer notification of data breaches may encourage better data security practices and help deter or mitigate harm from identity theft, but it also involves monetary costs and challenges such as determining an appropriate notification standard."

"Representatives of federal banking regulators, other government agencies, industry associations, and other affected parties told us that breach notification requirements have encouraged companies and other entities to improve their data security practices to minimize legal liability or avoid public relations risks that may result from a publicized breach of customer data."

The report adds that "notifying affected consumers of a breach gives them the opportunity to mitigate potential risk -- for example, by reviewing their credit card statements and credit reports, or placing a fraud alert on their credit files."

7/9. The U.S. Attorney's Office for the Central District of California announced in a release that David Bershad has agreed to plead guilty in a criminal action arising out of the payment of kickbacks to named plaintiffs in class action lawsuits filed by law firm of Milberg Weiss Bershad & Schulman (MWBS).

The release states that Bershad "has agreed to plead guilty to a federal conspiracy charge and acknowledge that he and others agreed to conceal from judges in state and federal courts Milberg Weiss' secret payment arrangements with named plaintiffs in class actions and shareholder derivative actions".

See also, story titled "Milberg Weiss Indicted for Paying Illegal Kickbacks to Class Action Plaintiffs" in TLJ Daily E-Mail Alert No. 1,375, May 22, 2006.

Moreover, the release states that Bershad has agreed "to cooperate in the government's ongoing investigation and prosecution of other participants in the conspiracy". The release does not identify any of the "other participants".

However, one possible object of the ongoing investigation could be William Lerach, who was previously a name partner in the predecessor law firm of Milberg Weiss Bershad Hynes & Lerach. He is now the lead partner in the law firm of Lerach Coughlin Stoia Geller Rudman & Robbins. Over many years he has been associated with numerous class action securities fraud suits against technology and communications companies.

The release adds that "Bershad’s expected guilty plea stems from an indictment returned by a federal grand jury in May 2006 that accused Milberg Weiss, Bershad, former Milberg Weiss name partner Steven G. Shulman, and others with participating in a scheme to pay millions of dollars in secret and illegal kickbacks to named plaintiffs in more than 150 class actions and shareholder derivative actions. The indictment alleges that the firm received well over $200 million in attorneys' fees from these lawsuits over the past 20 years".

7/4. David Cameron, a member of the U.K. Parliament, and head of the Conservative Party, gave a speech [10 pages in PDF] in London regarding intellectual property rights (IPR) at an event hosted by the British Recorder Music Industry, or BPI.

Summary. Cameron (at right) advocated IPR generally, criticized the Gowers report, asserted a link between "CD piracy and serious and organised crime", proposed stronger criminal enforcement of copyright laws, proposed extending the copyright term for sound recordings from 50 to 70 years, and declined to advocate censorship of music lyrics or video.

On the other hand, he made two points not typically expressed by music industry representatives. First, he said that people should be allowed to copy the content of their CDs onto music players for personal use. Second, he argued that it should be less expensive and easier to register intellectual property.

He also said that "ISPs can block access and indeed close down offending file-sharing sites".

Cameron is the leader of the opposition party in UK politics. See also, speech of George Osborne, the Conservative Party's shadow Chancellor of the Exchequer, on March 8, 2007, titled "Open Source Politics".

Rationales for IP Protection. Cameron offered several reasons for protecting intellectual property. He said that "Copyright matters because it is the way artists are rewarded and businesses makes its money and invests in the future." He elaborated on the benefits to the economy of a vibrant music industry, and the harm to low income artists of music piracy.

He also said that "piracy and illegal file-sharing is wrong."

He also argued that IP protection incents new creation, and expands consumer choice.

Finally, he said that there are "links between CD piracy and serious and organised crime".

Gowers Report. Cameron criticized the Gowers Review into the UK Intellectual Property Framework [150 pages in PDF], which was commissioned by the ruling Labour Party, and released on December 6, 2006.

He said that the Gowers report "rightly disappointed many in the creative industries by failing to do much more than suggest tinkering at the edges."

"Changes at the margins will not be good enough", said Cameron. "If we are serious about protecting intellectual property, we need to build a framework that is both flexible and accessible."

Proposals. Cameron stated that "government has three important responsibilities, "to establish a more robust intellectual property framework", "fight copyright theft" by "vigorously bringing offenders to book", and to confront "the blasé attitude that many people have towards piracy and illegal downloading".

He argued that the IP framework "has to be flexible so it reflects the changing way in which people listen to their music for personal use." He continued that this "means decriminalising the millions of people in this country for copying their CDs onto music players for personal use, and focusing all our attention on the genuine fraudsters."

He also argued that IP protection "has to be accessible so smaller companies, who currently find it so expensive to register their intellectual property, have the resources to do so."

He added that "That means working at a Europe-wide level to end the need to translate all documents and applications into all the EU languages."

He also advocated more vigorous prosecution of pirates.

He also proposed extending the copyright term for sound recordings. He said that "If we increase the copyright term, so the incentive is there for you working in the industry to digitise both older and niche repertoire which more people can enjoy at no extra cost."

He announced that "it is Conservative Party policy to support the extension of the copyright term for sound recordings from 50 to 70 years."

ISP Responsibilities. Cameron also referenced the "responsibility" of the "Internet Service Providers", who are the "the gatekeepers of the internet."

He said that "Some ISPs claim there is nothing they can do to stop illegal downloading of music. But last month alone, there were eight sites that hosted more than 25,000 illegal downloads. That is clear and visible internet traffic."

He also said that the music industry cannot "do all the work" in fighting piracy. "ISPs can block access and indeed close down offending file-sharing sites."

He added that ISPs "have already established the Internet Watch Foundation to monitor child abuse and incitement to racial hatred on the internet. They should be doing the same when it comes to digital piracy."

However, he stopped short of proposing the enactment of new statutes that would impose any new obligations or liabilities on ISPs.

Censorship. Cameron asked rhetorically, "Is some music, are some lyrics, are some videos and are some artists, helping to create a culture in which an anti-learning culture, truancy, knifes, violence, guns, misogyny are glorified?" He answered his question, "Yes."

He continued, "Can we see the effects of this on our young people, in our schools and on our streets? Yes."

"Do we think we can combat this culture by government policies, policing and criminal justice alone? No." He added that "That’s why I am not calling for censorship, legislation or the banning of content."

Instead, he called for politicians, teachers, parents, television producers, video game manufacturers, and record industry executives to "to show leadership, exercise your power responsibly and to use your judgement."

See also, copy of speech in Conservative Party web site.

7/5. The Department of Homeland Security (DHS) announced in a release that on June 28, 2007, that the DHS, Germany and the European Union "initialed an international agreement between the United States and the European Union on the transfer of Passenger Name Record (PNR) data to the Department of Homeland Security (DHS) from air carriers operating transatlantic flights to and from the U.S."

However, the DHS did not release the text of this agreement. The DHS release states that the "DHS and the EU have agreed to revise the list of data that may be collected".

Also on June 28, 2007, the EU announced in a release that "the European Union has got a set of unilateral commitments (``Representations´´) of the United States Treasury Department regarding their handling of EU originating personal data received from SWIFT in the United States under compulsion of administrative subpoenas." (Parentheses and internal quotations in original.)

However, the EU did not release the text of this document or documents.

The EU release states that this includes "Commitments by the U.S. Treasury to use any data received from SWIFT exclusively for counter terrorism purposes -- an obligation which applies also where such data are shared with other U.S. agencies and with third countries. Any other use of SWIFT data is therefore excluded, including for example use of those data for commercial or industrial purposes."

"The Representations impose strict data retention obligations, namely to retain dormant data (i.e. data subpoenaed by US Treasury which have not been identified as necessary for counter terrorism purposes) for no more than five years from the date of receipt of data or, in the case of data received before publication of the Representations, to retain those data for no more than five years from the date of publication of the representations." (Emphasis in original omitted.)

Society for Worldwide Interbank Financial Telecommunication  (SWIFT) announced in a release on June 23, 2007, that "SWIFT responded to compulsory subpoenas for limited sets of data from the Office of Foreign Assets Control of the United States Department of the Treasury".

SWIFT states in its web site that it is an "industry-owned co-operative supplying secure, standardised messaging services and interface software to nearly 8,100 financial institutions in 207 countries and territories. SWIFT members include banks, broker-dealers and investment managers. The broader SWIFT community also encompasses corporates as well as market infrastructures in payments, securities, treasury and trade."

TLJ Daily E-Mail Alert No. 1,606 incorrectly listed the date of the Software and Information Industry Association's (SIIA) conference titled "The Framework for Global Electronic Commerce: What We Got Right, What We Didn’t and What’s Next? 10th Anniversary of the Magaziner Report" as Thursday, July 12. In fact, it will be on Wednesday, July 11.

TLJ Daily E-Mail Alert No. 1,606 incorrectly listed the date and time of the oral argument before the U.S. Court of Appeals (FedCir) in Dolby Labs v. Lucent Technologies. It has been rescheduled for August 6, 2007.

The House will return from its Independence Day recess. It will meet at 2:00 PM for legislative business. It will consider numerous items under suspension of the rules. The agenda includes consideration of HR 556 [LOC | WW], the "Foreign Investment and National Security Act of 2007", a bill pertaining to the Committee on Foreign Investment in the United States (CFIUS) and regulation of foreign ownership of companies for national security or protectionist purposes. The agenda also includes consideration of HR 660 [LOC | WW], the "Court Security Improvement Act of 2007", a bill with numerous provisions related to court security, and a provision regarding participation by senior status judges. Votes will be postponed until 6:30 PM. See, Rep. Hoyer's weekly calendar [PDF].

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Nilssen v. Osram Sylvania, App. Ct. No. 2006-1550, a patent infringement case. The U.S. District Court (NDIll) held that the patents in suit are unenforceable for several reasons, including that Nilssen did not pay a large entity fee to the USPTO, but granted a non-exclusive license to a large corporation. Location: Courtroom 201, 717 Madison Place, NW.

2:00 PM. The Open Internet Coalition will host a telephonic news conference titled "Consumer Advocates to Call for Pro-Consumer Wireless Policy Agenda". The speakers will be Tim Wu (Columbia Law School), Chris Murray (Consumers Union), Ben Scott (Free Press), and Gigi Sohn (Public Knowledge). To participate, call 877-250-3043. The code is 6386893#.

Deadline to submit comments to the Rural Utilities Service (RUS) in response to its notice of proposed rulemaking regarding its Rural Broadband Access Loan and Loan Guarantee Program. The RUS proposes to change its rules regarding funding in competitive markets and new eligibility requirements, new equity and market survey requirements, and new legal notice requirements. See, notice in the Federal Register, May 11, 2007, Vol. 72, No. 91, at Pages 26742-26759

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

8:30 - 11:00 AM. The Software and Information Industry Association (SIIA) will host a conference titled "The Framework for Global Electronic Commerce: What We Got Right, What We Didn’t and What’s Next? 10th Anniversary of the Magaziner Report". The speakers will include Ira Magaziner, Stewart Baker (Assistant Secretary for Policy at the DHS), Jamie Estrada (Department of Commerce) and Michael Mandel (Business Week). Location: China Room, Renaissance Mayflower Hotel, 1127 Connecticut Avenue, NW.

POSTPONED. 10:00 AM. The House Commerce Committee's (HCC) Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled "From Imus to Industry: The Business of Stereotypes and Degrading Images  Hearing". The hearing will be webcast by the HCC. Location: Room 2123, Rayburn Building.

10:00 AM. The House Commerce Committee's (HCC) Subcommittee on Telecommunications and the Internet will hold a hearing titled "Wireless Innovation and Consumer Protection". The hearing will be webcast by the HCC. Location: Room 2322, Rayburn Building.

10:00 AM. The Homeland Security and Governmental Affairs will hold a hearing titled "Strengthening the Unique Role of the Nation’s Inspectors General". See, notice. Location: Room 342, Dirksen Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Toshiba v. Juniper Networks, App. Ct. No. 2006-1612, a patent infringement case involving telecommunications equipment. Location: Courtroom 203, 717 Madison Place, NW.

10:00 AM. The Center for Democracy and Technology (CDT) and other groups will host a news conference to announce and explain the filing of a complaint with the Federal Trade Commission (FTC) against railway contractors alleging violation of the Fair Credit Reporting Act (FCRA) in connection with their alleged administration of criminal background checks on employees via data aggregators. The CDT stated in a release that "these FCRA violations are widespread and can lead to dire consequences for workers who have been improperly flagged by the data aggregators who provide the checks." This news conference will also be teleconferenced. To participate telephonically, call 800-377-8846. The participant code is #31100533. Breakfast will be served. For more information, contact David McGuire at 202-637-9800 x106. Location: CDT, 11th floor, 1634 I St., NW.

11:30 AM. The Business Software Alliance (BSA) and the Economist magazine's Economist Intelligence Unit (EIU) will host a telephonic news conference to announce and explain a report titled "IT Competitiveness Index". The BSA stated in a release that this report is ranks "64 nations on the extent to which each nation supports a thriving IT sector", based upon "25 indicators in six categories".Denis McCauley (EIU) and Robert Holleyman (head of the BSA). To obtain the phone number and code to participate in the conference, contact Karen Dorbin at Karen dot Dorbin at dittus com com or 202-715-1538. (The BSA and EIU will hold additional news conferences in Singapore and London.)

12:00 NOON - 2:00 PM. The Federal Communications Bar Association's (FCBA) International Telecommunications Committee will host a brown bag lunch. The speaker will be Helen Domenici (Chief of the FCC's International Bureau). For more information, contact LeJuan Butler at lbutler at unfoundation dot org or 202-887-9040. Location: Harris Wiltshire & Grannis, 1200 18th St., NW.

2:30 - 4:00 PM. The Department of State's (DOS) Advisory Committee on International Communications and Information Policy (ACICIP) will meet. The agenda includes a "report on recent bilateral discussions with China's Ministry of Information Industries and with Mexico's Ministry of Communications and Transportation, as well as upcoming bilateral discussions with India's Ministry of Communications and Information Technology and with Brazil's Ministry of Communications; and also to report on recent developments regarding the President's Digital Freedom Initiative". See, notice in the Federal Register, June 14, 2007, Vol. 72, No. 114, at Page 32939. Location: Loy Henderson Auditorium, Harry Truman Building, 2201 C St., NW.

Day one of a two day event hosted by the Federal Trade Commission (FTC) titled "Spam Summit: The Next Generation of Threats and Solutions". See, FTC notice and Spam Summit web page. Location: FTC's satellite building conference center, 601 New Jersey Ave., NW.

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda again includes consideration of S 1145 [LOC | WW], the "Patent Reform Act of 2007", and consideration of the nominations of William Osteen (to be a Judge of the U.S. District Court for the Middle District of North Carolina), Martin Karl Reidinger (USDC, WD North Carolina), Timothy DeGiusti (USDC, WD Oklahoma), and Janis Lynn Sammartino (USDC, SD California). The SJC rarely follows its published agenda. See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Number Portability". See, notice. Location: Room 253, Russell Building.

12:00 PM - 1:30 PM. The DC Bar Association will host a panel discussion titled "Dual-Use Export Control Regulations For China". The speakers will be Mario Mancuso (Under Secretary of Commerce for Industry and Security), Matthew Borman (Deputy Assistant Secretary for Export Administration), Peter Lichtenbaum (BAE Systems, Inc.), and Mary Peters (Hogan & Hartson). See, notice. For more information, call 202-626-3463. The price to attend ranges from $5 to $35. Location: Wiley Rein, 1776 K St., NW.

Day two of a two day event hosted by the Federal Trade Commission (FTC) titled "Spam Summit: The Next Generation of Threats and Solutions". See, FTC notice and Spam Summit web page. Location: FTC's satellite building conference center, 601 New Jersey Ave., NW.

CANCELLED. The Forum on Technology & Innovation (FTI) might host a forum.

The House will meet at 9:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Data Encryption v. Microsoft, App. Ct. No. 2006-1603, a patent infringement case. Location: Courtroom 201, 717 Madison Place, NW.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its Draft Special Publication 800-46 Version 2 [44 pages in PDF] titled "User's Guide to Securing External Devices for Telework and Remote Access".

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding its collection of data on broadband deployment. This NPRM is FCC 07-17 in WC Docket No. 07-38. See, notice in the Federal Register, May 16, 2007, Vol. 72, No. 94, at Pages 27519-27535.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Second Further Notice of Proposed Rulemaking (2ndFNPRM) [26 pages in PDF] in its proceeding titled "Carriage of Digital Television Broadcast Signals: Amendment to Part 76 of the Commission's Rules". The FCC adopted this item on April 25, 2007, and released it on May 4, 2007. This item is FCC 07-71 in CS Docket No. 98-120. See, notice in the Federal Register, June 6, 2007, Vol. 72, No. 108, at Pages 31244-31250.

Deadline to submit comments to the Copyright Office (CO) regarding its final list of stations listed in affidavits sent to the CO in which the owner or licensee of the station attests that the station qualifies as a specialty station. See, notice in the Federal Register, June 15, 2007, Vol. 72, No. 115, at Pages 33251-33252.

8:30 AM - 12:30 PM. The U.S. Chamber of Commerce will host an event titled "Going Beyond the Border: The Impact of Domestic Regulation on Global Markets". The speakers will include Deborah Majoras, Chairman of the Federal Trade Commission (FTC), who will speak at 10:30 AM on "Global Antitrust Enforcement". See, notice and agenda [PDF]. Location: Chamber, 1615 H St., NW.

6/26. Viviane Reding, the EC Commissioner for Information Society and Media, gave a speech regarding regulation of interactive games. She wrote that "there are growing concerns in Europe and in the US, especially among policy makers, about the effects upon minors of violent video games". She advocated both "self- and co-regulation".

She said that "there is a renewed need for industry, including retailers and proprietors of games arcades, to shoulder its responsibility in this respect. Therefore, I strongly encourage you to find adequate, flexible solutions to the problem of under-age sales of video games and to regularly redefine classification criteria."

She also said that the European Commission "through legislative proposals as well as through its other actions, has endeavoured to support such a responsible approach."

She added that "I am a strong believer in self- and co-regulation. However, for a self- or co-regulatory system to be effective, the public has to be made aware of its existence. If the parents are not aware of the system and how it works, they will not be able to use it to their children’s advantage."

7/9. Google announced in a release that "it has signed a definitive agreement to acquire Postini ... for $625 million in cash, subject to working capital and other adjustments, and Postini will become a wholly-owned subsidiary of Google". Google also stated that "Postini's services -- which include message security, archiving, encryption, and policy enforcement -- can be used to protect a company's email, instant messaging, and other web-based communications". Google added that this transaction "is expected to close by the end of the third quarter 2007".

7/4. The European Commission announced in a release that it fined Telefónica "over €151 million for over five years of unfair prices in the Spanish broadband market". Nellie Kroes, the EC Competition Commissioner, stated that "Telefónica has committed a very serious abuse of its dominant position on the Spanish broadband market by structuring its wholesale and retail prices in such a way that the margin between them did not allow competitors to compete on the market without making losses." Kroes elaborated in her statement that "For more than five years, from September 2001 to December 2006, Telefónica kept wholesale prices artificially high compared to its retail prices. Because potential competitors in Spain were largely dependent on Telefónica's fixed telephone network to provide broadband access, through ADSL technology, Telefónica's price structures raised its competitors' costs, restricted competition on the retail market, and made consumers pay the price." She added, "I want to send a strong signal to dominant undertakings in all sectors".

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