8/1. The House approved HR 6029 [LOC | WW], the "Foreign and Economic Espionage Penalty Enhancement Act of 2012", by voice vote on August 1, 2012.

Rep. Lamar Smith (R-TX), Rep. John Conyers (D-MI) and others introduced this bill on June 27, 2012. See, story titled "Representatives Introduce Bill to Increase Penalties for Economic Espionage" in TLJ Daily E-Mail Alert No. 2,405, July 9, 2012. The House Judiciary Committee (HJC) approved it by voice vote at its July 10, 2012, meeting.

This bill would increase the maximum penalty for economic espionage, which is codified at 18 U.S.C. § 1831, from 15 to 20 years. It would also increase the maximum fine from $500,000 to $5,000,000.

It would also increase the maximum fine for corporations and other organizations. The statute currently provides that "Any organization that commits any offense described in subsection (a) shall be fined not more than $10,000,000." HR 6029 provides that the maximum fine is "not more than the greater of $10,000,000 or 3 times the value of the stolen trade secret to the organization, including expenses for research and design and other costs of reproducing the trade secret that the organization has thereby avoided".

This bill would also direct the U.S. Sentencing Commission (USSC) to review its sentencing guidelines for economic espionage.

Rep. Bobby Scott (D-VA) (at right), the ranking Democrat on the HJC's Subcommittee on Crime, stated during floor debate on July 31 that "Evidence suggests that economic espionage and trade secret theft on behalf of companies located in China is an emerging trend. For example, at least 34 companies were reportedly victimized by attacks originating from China in 2010. Over the course of these attacks, computer viruses were spread via emails to corporate employees, allowing the attackers to have access to emails and sensitive documents."

Rep. Smith stated during floor debate on July 31 that the goal of this bill is "to deter and punish criminals who target U.S. economic and security interests on behalf of foreign interests".

He noted that a study by McAfee concluded that "In recent years, cybercriminals have shifted from targeting the theft of personal information, such as credit cards and Social Security numbers, to the theft of corporate intellectual capital. Corporate intellectual capital is vulnerable, of great value to competitors and foreign governments, and its theft is not always discovered by victims."

Also, "Our intelligence community warns that foreign interests place a high priority on acquiring sensitive U.S. economic information and technologies. Targets include information and communications technologies, business information, military technologies, and rapidly growing civilian and dual-use technologies". Moreover, he said that Chinese actors are the world's most active and persistent perpetrators of economic espionage.

The Senate has not passed this bill.

However, on March 30, 2011, Sen. Herb Kohl (D-WI), Sen. Sheldon Whitehouse (D-RI), and Sen. Christopher Coons (D-DE) introduced a similar bill, S 678 [LOC | WW], the "Economic Espionage Penalty Enhancement Act".

The Senate Judiciary Committee (SJC) held a hearing on June 22, 2011. The SJC amended and approved that bill on December 8, 2011. The full Senate has not passed that bill.

It is not the same as the House bill. It would increase the maximum penalty for economic espionage from 15 to 20 years, and direct the USSC to review its sentencing guidelines. However, it does not contain the House bill's provisions for increasing maximum fines.

8/1. The House Commerce Committee (HCC) passed HR 6131 [LOC | WW], a bill to extend the "Undertaking Spam, Spyware, And Fraud Enforcement With Enforcers Beyond Borders Act of 2006" or "SAFE WEB Act", by voice vote on August 1, 2012. The Senate Commerce Committee (SCC) approved S 3410 [LOC | WW], a substantially identical bill, on July 31, 2012.

Rep. Fred Upton (R-MI), the Chairman of the HCC, wrote in his prepared statement that "H.R. 6131 is a straightforward measure to extend a law that is working well to protect the interests of Americans using the Internet. The 2006 SAFE WEB Act allows the FTC to share information involving cross-border fraud with foreign law enforcement agencies and take other steps to combat foreign-originated Internet fraud and scams. I’m pleased to be extending it."

Rep. Upton added that "This law has served our nation well, and as the Internet plays a larger and larger role in our everyday activities, extending this authority to combat fraud is an important step. Again, I look forward to support from my colleagues for this measure."

The Congress enacted the SAFE WEB Act in late 2006, with a seven year sunset. HR 6131 and S 3410 would extend the sunset until September 20, 2020.

These bills are short, straightforward, and not controversial. The 2006 SAFE WEB Act was not controversial either. However, the SAFE WEB Act conferred some broad powers on the Federal Trade Commission (FTC). If the FTC had criminal prosecution authority, and/or the Department of Justice's (DOJ) propensity to apply laws in political fashion, the SAFE WEB Act might have been controversial in 2006, and its extension might be controversial today.

For example, the Act gave 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.

Also, while the title suggests that this bill pertains to the web, it actually affects a wide range of investigations and actions by the FTC.

The SAFE WEB Act was was S 1608 in the 109th Congress. President Bush signed it into law on December 22, 2006. It is Public Law No. 109-455. See, stories titled "Congress Expands Powers of FTC" in TLJ Daily E-Mail Alert No. 1,504, December 13, 2006, and "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. See also, FTC summary [3 pages in PDF] of the Act.

For a more detailed explanation of the SAFE WEB Act, see story titled "House Commerce Committee to Consider Extension of Sunset on US SAFE WEB Act" in TLJ Daily E-Mail Alert No. 2,404, July 5, 2012.

8/1. The House approved HR 4362 [LOC | WW], the Stopping Tax Offenders and Prosecuting Identity Theft Act of 2012", or "STOP Identity Theft Act of 2012", by voice vote on August 1, 2012.

Rep. Debbie Schultz (D-FL) and Rep. Lamar Smith (R-TX) introduced this bill on April 16, 2012. See, story titled "Rep. Smith and Rep. Schultz Introduce Bill Pertaining to Tax Return Identity Theft" in TLJ Daily E-Mail Alert No. 2,374, April 18, 2012.

This bill would make tax fraud (26 U.S.C. § 7206 or 26 U.S.C. § 7207) a predicate offense for elevating identity theft (18 U.S.C. § 1028) to aggravated identity theft (18 U.S.C. § 1028A).

It would also amend 18 U.S.C. § 1028, which currently prohibits only the theft of the identity of an individual person, to also prohibit the theft of the identity of a business or other entity.

It also states that "The Attorney General should make use of all existing resources of the Department of Justice, including any appropriate task forces, to bring more perpetrators of tax return identity theft to justice."

However, this bill does nothing to change the methods by which the IRS processes returns and issues refunds.

Rep. Smith stated during floor debate on July 31 that "Tax fraud through identity theft is a rapidly growing criminal enterprise in the United States. Criminals use stolen identities to steal income tax refunds from unsuspecting victims and from the Federal Government. With nothing more than stolen identity information -- Social Security numbers and their corresponding names and birth dates--criminals have electronically filed thousands of false tax returns and have received hundreds of millions of dollars in wrongful refunds."

Rep. Schultz (at right) stated that "An unsuspecting taxpayer goes to file their tax return only to be told by the Internal Revenue Service that someone else has already filed and claimed their hard-earned tax refund."

"These tax return identity thieves hide behind a veil of technology by stealing Social Security numbers and filing false electronic returns where the payoffs are almost instantaneous." Rep. Schultz added that "technology has simply outstripped the enforcement tools that are currently on the books."

The Senate has not passed this bill.

8/1. The Federal Trade Commission (FTC) released a notice [43 pages in PDF], to be published in the Federal Register, that announces, describes, and recites proposed changes to its rules that implement the Children's Online Privacy Protection Act (COPPA).

The deadline to submit written comments is September 10, 2012.

The COPPA, which is codified at 15 U.S.C. §§ 6501-6506, bans operators of web sites and online services that are directed to children from collecting information from children under thirteen without parental consent.

The COPPA was S 2326 in the 105th Congress. S 2326 was enacted into law as part of a large omnibus appropriations bill in October of 1998. See, TLJ story titled "Internet and Tech Bills Become Law", October 22, 1998. See also, TLJ web page titled "Children's Online Privacy Protection Act" (1998). The FTC adopted implementing rules in 2000.

In September 2011, the FTC issued a notice of proposed rulemaking. See, FR, Vol. 76, No. 187, Tuesday, September 27, 2011, at Pages 59803-59833. See also, story titled "FTC Proposes Changes to COPPA Rule" in TLJ Daily E-Mail Alert No. 2,302, September 21, 2011.

The FTC received over 350 comments. See, FTC web page with hyperlinks to comments. However, the FTC has not yet adopted any rules changes proposed in that 2011 notice. The just released notice is a continuation of that rule making proceeding.

The 2011 notice proposed modifying the definition of personal information to include persistent identifiers and screen or user names other than where they are used to support internal operations, and website or online service directed to children to include additional indicia that a site or service may be targeted to children.

The just released notice states that the FTC "now proposes to modify the definition of operator, and proposes additional modifications to the definitions of website or online service directed to children, personal information, and support for internal operations."

It also states that the FTC "proposes modifying the definition of both operator and website or online service directed to children to allocate and clarify the responsibilities under COPPA when independent entities or third parties, e.g., advertising networks or downloadable software kits (``plug-ins´´), collect information from users through child-directed sites and services."

This notice continues that the FTC "now believes that the most effective way to implement the intent of Congress is to hold both the child-directed site or service and the information-collecting site or service responsible as covered co-operators. Sites and services whose content is directed to children, and who permit others to collect personal information from their child visitors, benefit from that collection and thus should be responsible under COPPA for providing notice to and obtaining consent from parents. Conversely, online services whose business models entail the collection of personal information and that know or have reason to know that such information is collected through child-directed properties should provide COPPA's protections."

This notice also proposes "to modify the previously proposed revised definition of website or online service directed to children to permit websites or online services that are designed for both children and a broader audience to comply with COPPA without treating all users as children."

It also proposes "modifying the definition of screen or user name to cover only those situations where a screen or user name functions in the same manner as online contact information". Also, the FTC notice proposes modifying the revised definition of support for internal operations and the rules' coverage of persistent identifiers as personal information.

Rep. Joe Barton (R-TX) stated in a release that "The potential changes proposed are a great foundation to start the conversation about how to protect our kids online by addressing how personally identifiable information should be used, how we should define a website geared towards children 12 and younger, and further defining the term ``operator.´´"

He added that "These proposed changes to COPPA are a step in the right direction, but I believe that our children need stronger protections included in the Do Not Track Kids Act". Rep. Barton and Rep. Ed Markey (D-MA) introduced HR 1895 [LOC | WW], the "Do Not Track Kids Act", on May 13, 2011. See, story titled "Rep. Markey and Rep. Barton Release Draft of Do Not Track Kids Act" in TLJ Daily E-Mail Alert No. 2,236, May 9, 2011.

The House will meet at 9:00 AM for legislative business. The House will resume consideration of HR 6169 [LOC | WW | PDF], the "Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012", pursuant to a structured rule. See, Rep. Cantor's schedule for the week, and schedule for the day.

The Senate will meet at 9:30 AM. It is scheduled to vote on cloture on S 3414 [LOC | WW | PDF], the "Cybersecurity Act of 2012" at 11:00 AM.

9:30 - 11:00 AM. Sen. Rand Paul (R-KY) will give a speech titled "Will the Real Internet Freedom Please Stand Up". See, notice. Location: Heritage Foundation, 214 Massachusetts Ave., NE.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda again includes consideration of S 225 [LOC | WW], the "Access to Information About Missing Children Act of 2011". The agenda also again includes consideration of three U.S. District Court nominees: Jon Tigar (USDC/NDCal), William Orrick (USDC/NDCal), and Thomas Durkin (USDC/NDIll). The SJC will webcast this event. Location: Room 226, Dirksen Building.

1:00 - 2:30 PM. The Information Technology and Innovation Foundation (ITIF) will host a panel discussion titled "New Age of Discovery: Government’s Role in Transformative Innovation". The speakers will include former Rep. Bart Gordon (D-TN), Kathleen Kingscott (IBM), Eric Toone (ARPA-E), and Arun Majumdar (ARPA-E). See, notice. Location: ITIF/ITIC, Suite 610A, 1101 K St., NW.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed hearing on undisclosed matters. See, notice. Location: Room 219, Hart Building.

The House will meet at 9:00 AM for legislative business. See, Rep. Cantor's schedule for the week.

The House will not meet on the weeks of Monday, August 6, through Friday, August 10, Monday, August 13, through Friday, August 17, Monday, August 20, through Friday, August 24, Monday, August 27, through Friday, August 31, or Monday, September 3, through Friday, August 7.

The Senate will not meet on the weeks of Monday, August 6, through Friday, August 10, Monday, August 13, through Friday, August 17, Monday, August 20, through Friday, August 24, Monday, August 27, through Friday, August 31, or Monday, September 3, through Friday, August 7.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Accenture Global Services v. Guidewire Software, App. Ct. No. 2011-1486, an appeal from the U.S. District Court (NDCal) in a patent infringement case. Location: Courtroom 201.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (NPRM) [182 pages in PDF] regarding its collection of universal service taxes. The FCC adopted this item on April 27, 2012, and released the text on April 30. It is FCC 12-46 in WC Docket Nos. 06-122 and GN Docket No. 09-51. See, notice in the Federal Register, Vol. 77, No. 110, Thursday, June 7, 2012, at Pages 33896-33944.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [22 pages in PDF] regarding creating a Do-Not-Call registry for public safety answering points (PSAPs). The FCC adopted this item on May 21, 2012, and released the text on May 22. It is FCC 12-56 in CG Docket No. 12-129. See, notice in the Federal Register, Vol. 77, No. 120, Thursday, June 21, 2012, Pages 37362-37367.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Trans Video Electronics v. Sony Electronics, App. Ct. No.2012-1110, an appeal from the U.S. District Court (NDCal) in a patent infringement case involving video distribution technology, D.C. No. 09-civ-3304. Location: Courtroom 201.

6:00 - 8:15 PM. The DC Bar Association will host a presentation titled "Ethics of E-Mail and Social Media". The speaker will be Thomas Spahn (McGuire Woods). The price to attend ranges from $89 to $129. Reporters are barred from attending most DC Bar events. CLE credits. See, notice. For more information, call 202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.

No events listed.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Northrup Grumman Computing Systems v. US, App. Ct. Nos. 2011-5124 and 2012-5044, appeals from the U.S. Court of Federal Claims. Location: Courtroom 402.

5:00 PM. Deadline to register to present comments at the President's National Security Telecommunications Advisory Committee (NSTAC) August 16 meeting. The agenda includes discussions of (1) the Nationwide Public Safety Broadband Network (NPSBN), (2) the DHS's National Cybersecurity and Communications Integration Center (NCCIC), and (3) the proposal to develop a separate out of band data network supporting communications among carriers, ISPs, vendors, and additional critical infrastructure owners and operators during a severe cyber incident that renders the internet unusable. See, notice in the Federal Register, Vol. 77, No. 146, Monday, July 30, 2012, at Pages 44641-44642.

Deadline to submit written comments to the President's National Security Telecommunications Advisory Committee (NSTAC) in advance of its August 16 meeting. The agenda includes discussions of (1) the Nationwide Public Safety Broadband Network (NPSBN), (2) the DHS's National Cybersecurity and Communications Integration Center (NCCIC), and (3) the proposal to develop a separate out of band data network supporting communications among carriers, ISPs, vendors, and additional critical infrastructure owners and operators during a severe cyber incident that renders the internet unusable. See, notice in the Federal Register, Vol. 77, No. 146, Monday, July 30, 2012, at Pages 44641-44642.

8/1. The House approved HR 3120 [LOC | WW], the "Student Visa Reform Act", by voice vote on August 1, 2012. This bill is directed a reducing visa fraud by academic visa mills.

Rep. Zoe Lofgren (D-CA) introduced this bill on October 6, 2011. She stated during floor debate on July 31 that the U.S. student visa program has "helped American colleges and universities attract some of the brightest young minds in the world, while offering those students the opportunity to study in the world's leading institutions of higher education".

Rep. Lofgren (at right) She continued that some schools have "misled students as to their accreditation", "lied about the ability of students to transfer credits to other institutions", and taken "enormous sums of money from the students but provided questionable academic courses and essentially worthless degrees".

She said that this bill "requires that colleges and universities be accredited in order to host foreign students. Such accreditation would need to be given by a regional or national accrediting agency recognized by the Secretary of Education."

The Senate has not passed this bill.

8/1. Art Baker, who has worked for the House Judiciary Committee's (HJC) Subcommittee on Crime for two years, will return to the Federal Bureau of Investigation's (FBI) Office of Congressional Affairs.

8/1. The House approved HR 6063 [LOC | WW], the "Child Protection Act of 2012", by voice vote on August 1, 2012. This bill is the rump of the data retention bill that Rep. Lamar Smith (R-TX) endeavored, but failed, to pass earlier in this Congress. HR 6063 contains some of the provisions that were in HR 1981 [LOC | WW], but not the provisions that would have mandated data retention and storage by service providers, that would have provided immunity to service providers for retaining data, and that would have imposed criminal liability for "financial facilitation" of access to child pornography (CP). See, stories titled "Rep. Smith Introduces Rump of Data Retention Bill", "HR 6063 and Administrative Subpoenas", and "Commentary: HR 6063, Harassment of Witnesses, and Internet Speech" in TLJ Daily E-Mail Alert No. 2,405, July 9, 2012. See also, Rep. Smith's July 31 statement.

7/31. The Federal Communications Commission (FCC) adopted and released an order and consent decree [12 pages in PDF] that fines (nominally a "voluntary contribution") Cellco Partnership dba Verizon Wireless (VW) $1.25 Million for violating the FCC's C Block rules, which provide that C Block licensees (VW uses C Block spectrum for its 4G LTE service) shall not restrict the ability of their customers to use the devices and applications of their choice. VW endeavored to block its customers from accessing tethering applications. See also, FCC release, statement by FCC Commissioner Mignon Clyburn, and release of the Free Press, which filed a complaint with the FCC.

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