House Communications and Technology
Subcommittee Approves BTOP/BIP Bill |
4/1. The House Commerce Committee's
(HCC) Subcommittee on Communications and Technology (SCT) held a hearing on, and then
approved without amendment, a discussion draft of
HR __ [6 pages in PDF].
This bill pertains to oversight by the National
Telecommunications and Information Administration (NTIA) and
Rural Utilities Service
(RUS) of broadband related spending under HR 1 (111th Congress). That bill
appropriated $7 Billion for broadband grant and loan programs.
The Department of Commerce's (DOC) NTIA administers the Broadband Technology Opportunities
Program (BTOP). The Department of Agriculture's (DOA) RUS administers the Broadband Initiatives
Program (BIP).
The Subcommittee also held a hearing on February 10, 2011, on this topic. See, HCC
web page with hyperlinks to video, opening statements and prepared
testimony.
This bill addresses unused and reclaimed funds, termination of certain
awards of funds, and waste, fraud and abuse.
Rep. Greg Walden
(R-OR), Chairman of the Subcommittee, wrote in his
opening statement that "issues of fraud, waste and abuse will start popping
up now that the money is beginning to flow".
The HCC also released a March 30, 2011,
memorandum [4 pages in PDF] on this hearing and mark up. It states that the
"NTIA has made a total of 233 awards valued at $3.94 billion. Only $300 million
has actually been spent to date. Three awards have been returned, worth
approximately $39 million altogether (Leech Lake County, MN $1.7 million;
Badgernet, WI, $23 million; and Education Network, IN, $14.3 million)."
(Parentheses in original.)
This memorandum states that the "RUS has
made a total of 320 awards valued at $3.53 billion. Less than $100 million has actually
been spent to date. Ten (10) awards worth more than $38 million altogether have been returned.
The fact that this number of awards has already been returned, and that so much money still
remains obligated but unspent, makes oversight of the program and this legislation all the
more important." (Parentheses in original.)
See also, the NTIA's March 3, 2011,
report titled "Broadband Technology Opportunities Program (BTOP) Quarterly
Program Status Report".
Larry Strickling
(at right), head of the NTIA, wrote in his
prepared testimony [14 pages in PDF] that "NTIA supports the ultimate goals of
the bill, which are to protect against waste, fraud, and abuse and to ensure that unused
or reclaimed BTOP funds are promptly returned to the Treasury".
He also said that "NTIA does have some concerns, however, about the specific wording
of the requirement to deobligate and return funds to the Treasury and looks forward to working
with the Subcommittee to clarify its intent."
It was a hurried hearing and mark up. While numerous members made opening
statements, and asked questions, during the hearing, there was no debate, and no
amendments were offered, during the mark up.
See also,
prepared testimony [9 pages in PDF] of Jonathan Adelstein, head of the RUS.
See also, related story in this issue titled "Summary of BTO/BIP Bill".
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Summary of BTO/BIP Bill |
4/1. The House Commerce Committee's (HCC)
Subcommittee on Communications and Technology (SCT) released a discussion draft of
HR __ [6 pages in PDF], a bill pertaining to Department of Commerce's (DOC)
National Telecommunications and Information
Administration's (NTIA) Billion Broadband Technology Opportunities Program (BTOP),
and the Department of Agriculture's (DOA) Rural Utilities Service's (RUS) Billion
Broadband Initiatives Program (BIP).
The Subcommittee held a hearing on this discussion draft bill, and approved it without
amendment, on April 1, 2011. See, related story in this issue titled "House
Communications and Technology Subcommittee Approves BTOP/BIP Bill".
This bill would require the NTIA and RUS to terminate an award of either a
grant or loan if the NTIA or RUS determine that "cause exists to terminate the award".
Moreover, "Such cause may include an insufficient level of performance, wasteful
spending, or fraudulent spending."
It would require the NTIA and RUS to "immediately deobligate" and return to
the U.S. Treasury any terminated awards.
It would require the NTIA and RUS to return to the U.S. Treasury any awards that have been
returned to the NTIA or RUS, and any awards "disclaimed by the award recipient".
It would require the NTIA and RUS to make determinations on matters of
"material noncompliance with the award terms or provisions or improper usage of
award funds" within 30 days of receiving information.
The bill would also designate the officials who would make such determinations, and
require notice and explanation of such determinations within three days to the
Committees of Congress with jurisdiction.
Finally, the bill would amend Section 6001 of the HR 1 (111th Congress) to
make explicit that BTOP funds for awards that are terminated because of insufficient
performance, waste, or fraud shall be deobligated.
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House Subcommittee Holds Hearing on NSL
Authority |
3/30. The House Judiciary
Committee's (HJC) Subcommittee on Crime, Terrorism and Homeland Security held
a hearing titled "The Permanent Provisions of the PATRIOT Act".
The hearing centered on National Security Letter (NSL) authority, which
empowers the FBI, for example, to compel phone companies and internet service
providers to turn over records without seeking prior judicial approval.
Republican members of the Subcommittee defended the
Department of Justice (DOJ) and its
Federal Bureau of Investigation (FBI), and their use of
NSL authority. Rep. Trey Gowdy (R-SC) badgered the
ACLU witness. Democrats criticized or questioned the FBI's use of NSL authority.
As is the case for most hearings on surveillance issues, the Subcommittee
gained only limited information, because it heard from government
witnesses, but not from representatives of service providers, law professors
with expertise in this area, or people targeted by electronic surveillance.
Introduction to NSLs. Three provisions of the huge 2001 surveillance
act (Title II of the
HR 3162,
107th Congress, titled "USA PATRIOT Act", signed October 26, 2001, Public Law
107-56) are subject to sunsets -- those regarding Section 215 business records,
lone wolves, and roving wiretaps. Many others are not. No NSL powers are subject
to sunset provisions.
The 2001 Act did not create NSL authority. However, it lowered the standard.
Before passage of the 2001 Act, the government had to have specific and
articulable facts demonstrating that the information sought pertained to a
foreign power or an agent of a foreign power. The 2001 Act provides that the FBI
may use NSLs to obtain information from a "wire or electronic communication
service provider" that is merely "relevant to an investigation to protect
against international terrorism or clandestine intelligence activities".
These NSLs also include non-disclosure orders, or gag orders.
NSL authority is codified at
18 U.S.C. § 2709 (criminal
code's ECPA), 12 U.S.C. § 3414 (Right to Financial Privacy Act), 15 U.S.C. §§ 1681u and v
(Fair Credit Reporting Act), and 50 U.S.C. § 436 (National Security Act).
History of Abuse of NSL Authority. The Department of Justice's (DOJ)
Office of the Inspector General (OIG)
has written reports that document the FBI's abuse of NSL authority.
On March 9, 2007, the DOJ's OIG released a
report [30 MB in
PDF] titled "A Review of the Federal Bureau of Investigation's Use of National
Security Letters". See also, story titled "DOJ IG Releases Reports on Use of
NSLs and Section 215 Authority" in
TLJ Daily E-Mail
Alert No. 1,551, March 13, 2007. That report covered the use of NSLs in 2003
through 2005.
On March 13, 2008, the OIG released a
report [187
pages in PDF] titled "A Review of the FBI’s Use of National Security Letters:
Assessment of Corrective Actions and Examination of NSL Usage in 2006". See
also, story
titled "DOJ Inspector General Releases Second Report on FBI Misuse of National
Security Letters" in
TLJ Daily E-Mail
Alert No. 1,730, March 12, 2008.
DOJ Testimony. Todd Hinnen, the acting Assistant Attorney General (AAG) in charge
of the DOJ's National Security Division (NSD)
testified at this hearing. See,
prepared testimony [PDF].
David Kris, the last AAG, recently left the DOJ. President Obama has nominated
Lisa Monaco to replace him. See, story titled "Obama Nominates Lisa Monaco to Be
Head of DOJ's National Security Division" in TLJ Daily E-Mail Alert No. 2,205,
March 21, 2011.
Hinnen wrote that "A national security letter is effectively an
administrative subpoena, issued by a federal agency, requiring the production of
certain limited types of information held by third-party custodians."
He continued that "Under ECPA, the FBI may obtain subscriber information,
toll billing records, and electronic communication transactional records from a
wire or electronic communications service provider, such as a telephone company
or an Internet service provider. This is the NSL authority that is used most
frequently by the FBI". But, he added, "the FBI cannot obtain the content of
communications through an ECPA NSL."
He disclosed that some service providers have concluded that the FBI cannot
compel service providers to produce "electronic communication transactional
records" (ECTR). He said the the DOJ wants the ECPA to be amended to state that
such production is required.
He argued that "the current standards for issuance of an NSL are appropriate".
He added that "Imposing a higher evidentiary standard on NSLs, as was the case before
the reforms of the USA PATRIOT Act, would significantly impair the effectiveness of this
important investigative tool."
And, he argued that "NSLs are an indispensable investigative
tool, and have often been described as the “building blocks” of national
security investigations. NSLs contribute significantly to the FBI’s ability to
carry out its national security responsibilities by directly supporting its
counterterrorism, counterintelligence, and intelligence missions."
As for the DOJ/OIG reports, Hinnen wrote that recent changes at the FBI have
"significantly improved the FBI’s compliance with the NSL statute and has reduced
errors in the production of NSLs to a very low rate".
Kenneth Wainstein was the
NSD AAG late in the Bush administration. He now works for the law firm of
O'Melveny & Myers. He did not disclose any of his clients.
He noted in his
prepared
testimony that "Thanks to the determined efforts of our law enforcement and
intelligence leadership and personnel, we now have a formidable counterterrorism
program that has succeeded in preventing another 9/11 attack and keeping al
Qaeda off balance".
He added that "we now have a well-balanced
legislative framework" and "we have every reason to approach the ten-year
anniversary of the PATRIOT Act with confidence that its authorities and
safeguards will continue to contribute both to the defense of our national
security and to the protection of our civil liberties."
ACLU Testimony. Mike German of the ACLU criticized the FBI's history
of abuse of NSL authority. See,
prepared testimony and ACLU
release.
He wrote that "It is time for Congress to act. Lawmakers
should take this opportunity to examine thoroughly all Patriot Act powers, and
indeed all national security and intelligence programs, and bring an end to any
government activities that are illegal, ineffective or prone to abuse."
He continued that "NSLs are secret demand letters issued without judicial
review to obtain sensitive personal information such as financial records,
credit reports, telephone and e-mail communications data and Internet searches."
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Mike German
Copyright ACLU |
German (at right) urged the Congress to "Repeal the expanded NSL authorities
that allow the FBI to demand information about innocent people who are not the
targets of any investigation. Reinstate prior standards limiting NSLs to
information about terrorism suspects and other agents of foreign powers."
He also urged the Congress to "Impose judicial oversight of
all Patriot Act authorities. Allowing the FBI to self-certify that it has met
the statutory requirements invites further abuse and overuse of NSLs."
German's 31 page singled spaced prepared testimony also contains detailed
reviews of, and proposals for changes to, other surveillance provisions of the
2001 act. However, the Subcommittee members focused on his proposals
regarding NSL authority.
Who Speaks for the Privacy Interests of Individuals? The Subcommittee
heard no testimony from individuals whose records have been obtained pursuant to
NSLs.
In his oral testimony, Hinnen made the assertion that in protecting the
interests of individuals, the telecommunications companies are a "proxy" for
their customers.
German disputed this. He said that the "telecommunications companies were not
looking out for the interests of their customers".
Even if the service providers represent the interests of their customers, the
Subcommittee heard no testimony from executives at phone companies, internet
service providers, other targets of NSLs, or from representatives of their trade
groups. No one testified for either surveilled individuals, or for the service
providers.
Nor did the Subcommittee hear testimony from any law professors who teach or
write on surveillance law.
As is the case at almost all Congressional hearings on surveillance, the only
witnesses with particular or personal knowledge of relevant information were
current and former government officials engaged in surveillance activities.
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About Tech Law
Journal |
Tech Law Journal publishes a free access web site and a subscription e-mail alert.
The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year for
a single recipient. There are discounts for subscribers with multiple recipients.
Free one month trial subscriptions are available. Also, free subscriptions are
available for 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 two months after writing.
For information about subscriptions, see
subscription information page.
Tech Law Journal now accepts credit card payments. See, TLJ
credit
card payments page.
TLJ is published by
David
Carney
Contact: 202-364-8882.
carney at techlawjournal dot com
P.O. Box 4851, Washington DC, 20008.
Privacy
Policy
Notices
& Disclaimers
Copyright 1998-2011 David Carney. All rights reserved.
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In This
Issue |
This issue contains the following items:
• House Communications and Technology Subcommittee Approves BTOP/BIP Bill
• Summary of BTO/BIP Bill
• House Subcommittee Holds Hearing on NSL Authority
• Microsoft Complains to EC Antitrust Regulators About Google
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Washington Tech
Calendar
New items are highlighted in
red. |
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Friday, April 1 |
The House will meet at 9:00 AM for legislative
business. See Rep. Cantor's
schedule for week of March 28.
The Senate will not meet.
Supreme Court conference day (discussion of argued
cases, and decision on cert petitions). Closed.
9:00 - 11:00 AM. The House
Intelligence Committee (HIC) will hold a closed hearing titled "FY 2012 Budget
Overview". Location: Room HVC-304, House Visitor Center.
10:00 AM. The House Judiciary
Committee's (HJC) Subcommittee on Intellectual Property, Competition and the Internet
will hold a hearing titled "Competition and Consolidation in Financial Markets".
See, notice.
Location: Room 2141, Rayburn Building.
10:30 AM. The House
Commerce Committee's (HCC) Subcommittee on Communications and Technology will hold a
hearing and markup for
HR __
[6 pages in PDF], a yet to be introduced bill regarding broadband spending
under HR 1 (111th Congress) for the National
Telecommunications and Information Administration (NTIA) and Rural Utilities Service
(RUS). See,
notice. Location: Room 2322, Rayburn Building.
2:00 - 4:00 PM. The National Science
Foundation's (NSF) Advisory Committee for Cyberinfrastructure will meet, on site
and by teleconference. See,
notice in the Federal Register, March 16, 2011, Vol. 76, No. 51, at Page 14436. Location:
NSF, 4201 Wilson Blvd., Room 1160, Arlington, VA.
Day three of a three day conference of the American Bar Association's
(ABA) Section of Antitrust Law. See,
conference web site. Prices vary. CLE credits. Location: JW Marriott
Hotel.
Deadline to submit comments to the
Department of Commerce (DOC) in
response to its Notice and Request for Information regarding the USA's
"innovative capacity and international competitiveness". See, original
notice in the
Federal Register, February 4, 2011, Vol. 76, No. 24, at Pages 6395-6397, and
correction notice
in the Federal Register, February 17, 2011, Vol. 76, No. 33, at Pages 9320.
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Monday, April 4 |
12:00 NOON - 1:30 PM. The DC Bar
Association will host an event titled "Demystifying Social Media -- What
Every Lawyer Should Know". The speakers will be Tasha Coleman, Tom Foster,
Laura Possessky, Michelle Thomas. See,
notice. Free. For more information, contact Daniel Mills at 202-626-1312. Location: DC
Bar Conference Center, 1101 K St., NW.
12:30 - 2:00 PM. The Federal Communications Bar Association's (FCBA)
International Telecommunications Committee will host a brown bag lunch titled
"Internet Ecosystem". The speakers will include Jack Nadler (Squire
Sanders), Michael Kende (Analysys Mason USA), Paul Kouroupas (Global Crossing), Eric
Loeb (AT&T), and Dennis Weller (Navigant Economics). For more information, contact
Jennifer Ullman at jennifer at thejgroupplanning dot com. Location:
Squire Sanders, Suite 500, 1201 Pennsylvania
Ave., NW.
Deadline to submit reply comments to the Federal Communications
Commission (FCC) in response to its
Notice of
Proposed Rulemaking (NPRM) regarding extending to June 30, 2012, the current freeze
of jurisdictional separations category relationships and cost allocation factors.
This NPRM is FCC 11-34 in CC Docket No. 80-286. The FCC adopted and released it on March
1, 2011. See, Federal Register, March 14, 2011, Vol. 76, No. 49, at Pages 13576-13579.
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Tuesday, April 5 |
2:30 PM. The Senate Commerce
Committee (SCC) will hold a hearing titled "Closing the Digital Divide:
Connecting Native Nations and Communities to the 21st Century". See,
notice. Location: Room 253, Russell Building.
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Wednesday, April 6 |
8:30 AM - 4:30 PM. Day one of a two day meeting of the
National Archives and Records Administration (NARA)
Advisory Committee on the Electronic Records Archives (ACERA). See,
notice in the Federal
Register, March 21, 2011, Vol. 76, No. 54, at Page 15349. Location: 700 Pennsylvania
Ave., NW.
9:30 AM. The Federal Communications Commission (FCC) will hold an
event titled "workshop" regarding its February 8, 2011, NPRM regarding its
intercarrier compensation system and universal service fund. See also,
NPRM [289 pages in PDF] adopted on February 8, 2011, and released on February 9, 2011.
It is FCC 11-13 in WC Docket No. 10-90, GN Docket No. 09-51, WC Docket No. 07-135, WC Docket
No. 05-337, CC Docket No. 01-92, CC Docket No. 96-45, and WC Docket No. 03-109. See,
notice. Location: FCC, Commission Meeting Room.
10:00 AM. The Senate
Judiciary Committee (SJC) will hold a hearing titled "The Electronic
Communications Privacy Act: Government Perspectives on Protecting Privacy in the Digital
Age". The witnesses will be
Cameron Kerry (General Counsel, Department of
Commerce) and James Baker (Associate Deputy Attorney General). The SJC will webcast this
hearing. See, notice.
Location: Room 226, Dirksen Building.
10:45 AM. The
House Judiciary Committee's (HJC) Subcommittee on Intellectual Property,
Competition and the Internet will hold a hearing titled "Promoting
Investment and Protecting Commerce Online: Legitimate Sites v. Parasites, Part
II". See,
notice. Location: Room 2141, Rayburn Building.
1:00 - 4:30 PM. The American Enterprise
Institute (AEI) will host a half day conference titled "Rare Earth
Crisis?". See, notice. This event
is free and open to the public. Location: AEI, 12th floor, 1150 17th St., NW.
6:00 - 8:00 PM. The Federal Communications
Bar Association (FCBA) will host an event titled "Congressional Reception".
See, notice and
registration form [PDF]. Prices vary. The FCBA excludes reporters from some of its
events. Location: Hyatt Regency Capitol Hill, 400 New Jersey Ave., NW.
Day one of a four day conference hosted by the the
American Bar Association (ABA) titled "26th Annual Intellectual Property
Law Conference". See,
notice. Location: Crystal Gateway Marriott, Arlington, VA.
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Thursday, April 7 |
Day one of a two day event hosted by the
National Institute of Standards and Technology
(NIST) titled "Cloud Computing Forum & Workshop III". See,
notice in the
Federal Register, March 15, 2011, Vol. 76, No. 50, at Pages 13984-13985.
Location: NIST, 100 Bureau Drive, Gaithersburg, MD.
9:00 AM - 12:00 NOON. Day two of a two day meeting of the
National Archives and Records Administration (NARA)
Advisory Committee on the Electronic Records Archives (ACERA). See,
notice in the Federal
Register, March 21, 2011, Vol. 76, No. 54, at Page 15349. Location: 700 Pennsylvania
Ave., NW.
10:30 AM. The Federal Communications Commission (FCC) may hold an event
titled "open meeting". Location: FCC, Commission Meeting Room, 445 12th
St., SW.
4:00 PM. George Mason University (GMU) will host a lecture by
Shane Greenstein
(Northwestern University business school) titled "The Mythology
of Networks and Other Lessons from the Commercial Internet". See,
notice.
Location: Room 120, Hazel Hall, GMU law school, Arlington, VA.
6:00 - 9:15 PM. The DC
Bar Association will host an event titled "Preserving Intellectual Property
Rights in Government Contracts: A Beginner’s Guide (Part 1)". The speakers will be
David Bloch (Winston & Strawn), Richard Gray (Department of Defense, Office of General
Counsel), John Lucas (Department of Energy), and James McEwen (Stein McEwen). See,
notice. The price
to attend ranges from $89 to $129. CLE credits. For more information, call
202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.
Day two of a four day conference hosted by the the
American Bar Association (ABA) titled "26th Annual Intellectual Property
Law Conference". See,
notice. Location: Crystal Gateway Marriott, Arlington, VA.
Deadline to submit comments to be considered by the
Federal Trade Commission (FTC) in advance of
its April 28, 2011, event titled "Public Workshop: Debt Collection 2.0: Protecting
Consumers as Technologies Change". See,
notice in the Federal
Register, March 15, 2011, Vol. 76, No. 50, at Pages 14010-14014, and story titled
"FTC Workshop to Address Use of Facebook and Other New Technologies for Debt
Collection" in TLJ Daily E-Mail Alert No. 2,204, March 15, 2011.
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Friday, April 8 |
Day two of a two day event hosted by the
National Institute of Standards and Technology
(NIST) titled "Cloud Computing Forum & Workshop III". See,
notice in the
Federal Register, March 15, 2011, Vol. 76, No. 50, at Pages 13984-13985.
Location: NIST, 100 Bureau Drive, Gaithersburg, MD.
Day three of a four day conference hosted by the the American Bar
Association (ABA) titled "26th Annual Intellectual Property Law Conference". See,
notice. Location: Crystal Gateway Marriott, Arlington, VA.
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Microsoft Complains to EC Antitrust
Regulators About Google |
3/30. Microsoft announced the filing of "a formal complaint with the European
Commission as part of the Commission's ongoing investigation into whether Google
has violated European competition law". The complaint pertains to search.
Microsoft did not release its filings with the European Commission (EC). Nor did the EC.
However, Brad
Smith, SVP and General Counsel of Microsoft, stated in a
release that "were concerned by a broadening pattern of conduct aimed at
stopping anyone else from creating a competitive alternative".
Smith (at right) wrote
that "Having spent more than a decade wearing the shoe on the other foot with
the European Commission, the filing of a formal antitrust complaint is not
something we take lightly. This is the first time Microsoft Corporation has
ever taken this step."
He also stated that "Over the past year, a growing number of advertisers, publishers,
and consumers have expressed to us their concerns about the search market in Europe. They've
urged us to share our knowledge of the search market with competition officials."
Allegations of Anticompetitive Conduct. Brad Smith asserted that "Google has
engaged in a broadening pattern of walling off access to content and data that competitors
need to provide search results to consumers and to attract advertisers."
For example, Smith wrote, "in 2006 Google acquired YouTube -- and since then
it has put in place a growing number of technical measures to restrict competing
search engines from properly accessing it for their search results."
As another example, Smith wrote that "in 2010 and again more recently, Google blocked
Microsoft's new Windows Phones from operating properly with YouTube. Google has enabled its
own Android phones to access YouTube so that users can search for video categories, find
favorites, see ratings, and so forth in the rich user interfaces offered by those phones.
It's done the same thing for the iPhones offered by Apple, which doesn’t offer a competing
search service. Unfortunately, Google has refused to allow Microsoft's new Windows Phones
to access this YouTube metadata in the same way that Android phones and iPhones do."
Smith also complained about Google's efforts to block advertisers' "access to
their own data". He also complained that "Google contractually blocks leading
Web sites in Europe from distributing competing search boxes". And, he
complained that "Google discriminates against would-be competitors by making it
more costly for them to attain prominent placement for their advertisements".
Allegations Regarding Orphan Works. Smith also stated that "Google is seeking to block access to content owned by
book publishers. This was underscored in federal court in New York last week".
On March 22, 2011, the U.S. District Court (SDNY) issued
its opinion
[48 pages in PDF] in Authors Guild v. Google, denying, without
prejudice, the motion for approval of the proposed class action settlement. See,
story titled "District Court Rejects Google Books Class Action Settlement" in
TLJ Daily E-Mail Alert No. 2,206, March 22, 2011.
Smith asserted that "Under Google's plan only its search engine would be able to
return search results from" certain "orphan books". See, story
titled "Orphan Works and the Court's Rejection of the Google Book Deal" in TLJ
Daily E-Mail Alert No. 2,207, March 23, 2011.
Smith quoted from page 37 of the District Court's opinion: "Google's ability to
deny competitors the ability to search orphan books would further entrench
Google’s market power in the online search market."
It should also be noted that the Department of Justice's (DOJ)
Antitrust Division filed a
pleading on
September 18, 2009, and an
amended pleading
on February 4, 2010, with the District Court in which it raised antitrust
concerns.
The DOJ wrote in its first pleading that the proposed class action settlement
would grant "Google de facto exclusive rights for the digital distribution of
orphan works". Moreover, "Google's competitors are unlikely to be able to obtain
comparable rights independently." This then "appears to create a dangerous
probability that only Google would have the ability to market to libraries and
other institutions a comprehensive digital-book subscription. The seller of an
incomplete database -- i.e., one that does not include the millions of orphan
works -- cannot compete effectively with the seller of a comprehensive product."
The DOJ wrote in its second filing regarding the amended settlement agreement
(ASA) that "Google's exclusive access to millions and millions of books may well
benefit Google's existing online search business. Google already holds a
relatively dominant market share in that market. That dominance may be further
entrenched by its exclusive access to content through the ASA. Content that can
be discovered by only one search engine offers that search engine at least some
protection from competition. This outcome has not been achieved by a
technological advance in search or by operation of normal market forces; rather,
it is the direct product of scanning millions of books without the copyright
holders' consent and then using Rule 23 to achieve results not otherwise
obtainable in the market." (Footnotes omitted.
Rule 23 of the
Federal Rules of Civil Procedure pertains to class actions.)
See also,
story
titled "DOJ Files Pleading in Google Books Case" in
TLJ Daily E-Mail
Alert No. 1,985, September 21, 2009, and
story
titled "DOJ Criticizes Amended Google Books Settlement" in
TLJ Daily E-Mail
Alert No. 2,043, February 12, 2010.
Why Europe? Microsoft has just complained to the EC. Both Microsoft
and Google are U.S. companies.
In recent years U.S. companies have been taking their antitrust grievances
with other U.S. companies to the EC, and have, in matters pertaining to
Microsoft and Intel, obtained results not obtained from U.S. antitrust
regulators.
One reason that U.S. companies take complaints to Europe may be that the EC's
competition related actions sometimes lack the basis in rigorous economic
analysis, and a finding of harm to consumers, that usually but not always
characterize actions by the U.S. DOJ or Federal Trade Commission (FTC).
For more on the EC role in regulating US companies, see story titled "Kroes
Discusses EC's Global Regulation Goals" in
TLJ Daily E-Mail
Alert No. 1,722, February 25, 2008, and "Commentary" subsection of story
titled "EC Demands More Money From Microsoft" in
TLJ Daily E-Mail
Alert No. 1,723, February 26, 2008.
However, Microsoft's Smith endeavored to portray this complaint as a European
matter.
He wrote that "By the European Commission's own reckoning, Google has about
95 percent of the search market in Europe. This contrasts with the United
States, where Microsoft serves about a quarter of Americans' search needs either
directly through Bing or through our partnership with Yahoo!."
He also stated that "As troubling as the situation is in United States, it is
worse in Europe. That is why our filing today focuses on a pattern of actions
that Google has taken to entrench its dominance in the markets for online search
and search advertising to the detriment of European consumers."
Disclosure. The home page of the Tech Law Journal contains a Google
search box that is configured to enable users to search the TLJ web site. TLJ
receives no compensation from Google in connection with this box.
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