Internet Stories: June - July 1998

Riley Attacks Burns-Tauzin Proposal to Reform E-Rate.  (7/30/98)  Secretary of Education William Riley ratcheted up the partisan rhetoric in the debate over how the e-rate should be administered in a speech on Wednesday.   He accused Members of Congress of "trying to pull the plug on the program."  He also argued that phone companies cannot bill customers for the universal service charges assessed to them to pay for the e-rate, and that the federal government should also provide schools with "hardware, the software, the wiring, and the teacher training."

Senate Committee Approves Digital Signatures Bill.  (7/30/98)  The Senate Commerce Committee approved an amended version of S 2107, the Elimination of Government Paperwork Act, on Wednesday, July 29, by a unanimous voice vote.  See, HTML Copy of Bill, as Amended.

SEC Forms Unit to Combat Internet Securities Fraud.  (7/30/98)  The Securities and Exchange Commission announced on Tuesday, July 28, that it has formed a new unit to combat securities fraud committed over the Internet.

Senate Committee Passes Internet Tax Freedom Act.  (7/29/98)  The Senate Finance Committee approved the Internet Tax Freedom Act (ITFA) with amendments on Tuesday morning.  The bill is now ready to be taken up by the full Senate.

Comparison of Schools and Libraries Programs.  (7/27/98)  The e-rate bills filed last Thursday by Sen. Burns, Rep. Tauzin, Rep. Weller, and Rep. Hulshoft would continue the existing FCC run program for subsidizing schools' and libraries' efforts to connect to the Internet.  However, the bills would make some major changes in the way the program is run.

Senate Passes 'CDA II' and 'Safe Schools Internet Act'.  (7/26/98)  The U.S. Senate passed the Commerce-Justice-State FY 1999 Appropriations Bill on Thursday, July 23.  Attached as amendments were S 1482, which some people call "CDA II," and S 1619, the "Safe Schools Internet Act."

Tauzin and Burns Introduce E-Rate Reform Bill.  (7/24/98)  Sen. Conrad Burns and Rep. Billy Tauzin introduced a bill on Thursday that would reform the controversy plagued schools and libraries program.   The proposal would fund the program out of the existing excise tax on phones, terminate the FCC's Schools and Libraries Corp., transfer authority to the NTIA, and hand out funds to the states in the form of block grants.   See, HTML Copy of Bill.

Senate Approves Internet Gambling Prohibition Act.   (7/23/98)  The Senate adopted as an amendment to a key appropriations bill the Internet Gambling Prohibition Act.  The vote was 90 to 10.

Senate Committee Passes Blocking Software Bill.  (7/22/98)  The Senate Appropriations Committee approved an appropriations bill on Tuesday, with an amendment that would require schools and libraries receiving e-rate subsidies to install blocking software.  The amendment had previously been introduced as Senate Bill 1619 by Sen. McCain on February 9.

Miller-White Bill Would Add Net Questions to Census.  (7/21/98)  Two Congressmen introduced legislation on Monday that would add two questions about computer ownership and Internet access to some census forms, starting in the year 2000.

Senate Holds Hearing on Schools and Libraries Corp.  (7/20/98)  The Senate Commerce Committee held a hearing into waste, fraud, and mismanagement, and other problems, at the Schools and Libraries Corporation (SLC) on Thursday, July 16.  The SLC administers a program for funding subsidies to schools and libraries for computer networking, Internet access, and phone service.  The Committee heard testimony from SLC President Ira Fishman, and GAO representative Judy Joseph.

Justice Clears WorldCom MCI Merger.   (7/16/98)  The U.S. Department of Justice announced that it has approved the proposed merger between WorldCom and MCI.  The announcement accompanies MCI's announcement that it has reached a deal to sell all of its Internet business to Cable and Wireless.

House Hearing on E-Commerce in Energy Industry.   (7/16/98)  While the web bookstores like amazon.com and online porn may be some of the better known examples of electronic commerce, data from Forrester Research shows the 25% of the dollar value of all electronic commerce is in the natural gas sector alone.  The House Commerce Committee's Subcommittee on Energy held a hearing on Wednesday on how this e-commerce is furthering deregulation and competition in the energy industry.

FTC Announces that Spam is Annoying.  (7/15/98)  FTC officials held a press conference in Washington DC on Tuesday to announce that unsolicited commercial e-mail, or "spam", is a problem.   "It’s annoying, it slows down the e-mail system, and a lot of it is fraudulent" said Jodie Bernstein, of the Federal Trade Commission's Consumer Protection Bureau.

Kennard Asks NAACP to Support E-Rate.   (7/15/98)  Federal Communications Commission Chairman William Kennard asked the NAACP to adopt a resolution in support of the "e-rate" during a speech at the NAACP's annual convention in Atlanta, Georgia, on July 13.

Livermore Seeks Dismissal of Blocking Software Case.  (7/13/98)  The City of Livermore filed a brief  in California State Court on Friday asking the court to throw out a mother's lawsuit to force the city's public libraries to install blocking software.  Both the City of Livermore, and the ACLU in a separate amicus curiae brief, argue that Section 230 of the Telecom Act of 1996 gives the city immunity from suit.

Istook Amendment Approved by House Subcommittee.  (7/2/98)  A House Appropriations Subcommittee unanimously approved Rep. Istook's amendment that would require any elementary or secondary school or library that receives federal funds for computers to install software that would block the access of minors to obscene materials on the Internet.  On Monday the Congressional Research Service issued an opinion letter stating that the bill is constitutional.

Gingrich Criticizes FCC Management of E-Rate.  (7/1/98)  House Speaker Newt Gingrich condemned the way the schools and libraries program is being subsidized in a trip to Silicon Valley on Tuesday.  Gingrich said that it is wrong to allow a bureaucracy to raise a tax, and bad policy to allow a Washington bureaucracy to manage technical modernization.

House Committee Holds Hearing on Internet Fraud.   (6/26/98)  The House Telecommunications Subcommittee held a hearing Thursday morning on consumer protection in cyberspace.  The panel heard from state and federal officials involved in prosecuting Internet fraud, and persons from the private sector involved in limiting Internet fraud.

House Passes Internet Tax Freedom Act.   (6/24/98)  The House of Representatives passed a compromise version of the Internet Tax Freedom Act (ITFA) without opposition late Tuesday.  The Senate has yet to pass any version of the bill, which would impose a three year moratorium on new multiple or discriminatory taxes on the Internet.  President Clinton has endorsed it.  See, HTML Copy of HR 4105.

Daley Urges Online Industry to Act on Self-Regulation.  (6/24/98)  Secretary of Commerce William Daley admonished companies that do business online to quickly adopt and enforce privacy principles, or else government regulators will do it for them.  See, HTML Copy of Daley Address.

Industry Privacy Alliance Formed.   (6/23/98)  A large group of computer and Internet industry companies and associations announced on Monday the creation of the Online Privacy Alliance, a coalition committed to protecting privacy in cyberspace.  The announcement came the day before a two day conference on privacy hosted by the Department of Commerce.  Industry and the Commerce Department support industry self-regulation, in contrast to the Federal Trade Commission, which is seeking more power to regulate privacy on the Internet.

Commerce Department Holds Privacy Conference.   (6/23/98)  The Department of Commerce is hosting a two day conference on privacy on the Internet in Washington DC on June 23 and 24.   Speakers and participants will include Secretary William Daley, Ester Dyson, industry representatives, privacy advocates, and others.

Supreme Court Denies Certiorari in Zeran v. AOL.  (6/22/98)  The U.S. Supreme Court denied Ken Zeran's Petition for Writ of Certiorari in his liable suit against America Online.  The denial lets stand the decision of the 4th Circuit Court of Appeals that Section 230 of the Telecommunications Act of 1996 immunizes online services, such as AOL, from liability for the defamations of content providers, such as people who post on their bulletin boards and chat rooms.

E-Rate Debate Continues.  (6/22/98)  The FCC's announcement on June 12 that it would modify its "E-Rate" or "Gore Tax" subsidies for schools and libraries has not quelled the debate over the future of the program.  AT&T announced Friday that it would charge its residential customers 93 cents per month to support universal service programs.   Also, legislators will likely introduce two bills in Congress this week that would transfer control of the program to the Department of Education, and fund it with an already existing federal excise tax on telephones.

House Subcommittee Examines Investing On-Line.   (6/19/98)  The House Finance Subcommittee held a hearing on Thursday to examine electronic trading of securities and bonds.  The hearing featured live demonstrations of actual electronic trades, with the screen of the computer monitor projected on the wall of the darkened hearing room.

Spamming, Slamming, and Billing Legislation.   (6/18/98)  The Senate held a hearing on anti-spamming legislation.  It  has already passed the Senate, but is pending in the House.  The measure would require junk e-mailers to identify themselves on messages, and honor requests from recipients to be removed from mailing lists.  This provision is part of a larger bill banning slamming, and regulating the content of phone companies' monthly bills to customers.

Net Tax Freedom Act Approved by Judiciary Committee.  (6/18/98)  The Internet Tax Freedom Act was approved by the House Judiciary Committee Wednesday on a voice vote, clearing the way for it to go to the full House.   The Senate has yet to take action on the bill.    See, HTML Copy of HR 3529, as approved by House Jud. Comm.

FCC Modifies Schools and Libraries Program.  (6/15/98)  The FCC decided on Friday to modify the way it implements Section 254(h) of the Telecommunications Act of 1996, which mandates universal service support for telecommunications services for schools and libraries.  However, the changes fell far short of what the FCC's critics in Congress wanted, and set the stage for further conflict, and/or Congressional legislation.

Judge Denies Cable & Wireless' Request to Enjoin MCI.  (6/15/98)  U.S. District Court Judge Thomas Jackson denied a motion of Cable & Wireless to enjoin MCI from negotiating to sell its Internet business to any other company.  MCI and WorldCom are under pressure from U.S. and E.U. regulators to divest some Internet assets.   On May 27, MCI agreed to sell certain assets to British telecommunications company Cable and Wireless.  Last Wednesdy Cable and Wireless filed its breach of contract lawsuit.   See, HTML Copy of Complaint.

Senate Communications Subcommittee Berates FCC.  (6/11/98)  The Senate Communications Subcommittee held a hearing on reauthorization of the Federal Communications Commission Wednesday morning, at which most Senators scolded the FCC Commissioners for their handling of universal service support for high cost rural areas and for schools and libraries.  FCC Commissioners said little to mollify their Senate critics.

Schools and Libraries Corporation in Trouble on Hill.  (6/8/98)  The Federal Communications Commission's handling of the schools and libraries universal service subsidy program, also know as the "e-rate," has come under strong criticism on Capitol Hill.  Several key Congressmen would like to shut down the Schools and Libraries Corp. and its funding mechanism.

Schools & Libraries Corporation Supporters Fight Back.  (6/8/98)  The supporters of the beleagured Schools and Libraries Corporation met Friday in Washington to organize their campaign to preserve the "e-rate" program in its current form.  Congressional supporters also held a press conference to announce that they would take their case to the public.  See, Transcript of Press Conference.

Education Dept. Waits in the Wings to Run the E-Rate.  (6/8/98)  The Department of Education might soon administer a reformed federal program for subsidizing school and library computer networking and connections to the Internet.   The program, known as the "e-rate," is now administered by the Federal Communications Commission and its Schools and Libraries Corporation.  However, the FCC has incurred the wrath of many members of Congress for the manner in which it has constituted the program.

Clinton Condemns "Digital Divide" in America.  (6/8/98)  President Bill Clinton delivered an address at the Massachusetts Institute of Technology on Friday in which he condemned the racial "digital divide" in America, and re-affirmed his support for the "e-rate" subsidy for school and library computer networking, Internet access, and phone service.   See, Complete Text of Clinton Speech.

Commerce Dept. Releases Domain Name System Policy.  (6/8/98)  The Department of Commerce released its long awaited final report on the domain name system on Friday.  The statement describes U.S. policy regarding privatization of the domain name system, but still leaves unresolved some of the controversial issues regarding openning up domain name registration to competition.  HTML Copy of the Policy Statement (Commerce Dept. Website).

FTC Wants More Power to Regulate Internet.   (6/5/98)  The Federal Trade Commission held a press conference in Washington Thursday to denounce websites that collect information from individuals and then sell or abuse that information without notice or consent.   Congressional committees, advocacy groups, and government agencies have been investigating and reporting on this problem for years.  However, the FTC is also seeking to parlay its condemnation of privacy violations into increased FTC authority to regulate the Internet.  Moreover, its action marks a break with the Clinton administration's policy of encouraging and relying on industry self-regulation.

Fed Gov. Ferguson Testifies on E Money and Payments.  (6/5/98)  The House Finance Subcommittee held a hearing Thursday on new methods of making financial purchases.  Roger Ferguson of the Federal Reserve System testified that the Fed does not anticipate that either emerging forms of electronic money or electronic commerce will impact its ability to carry out its responsibilities with respect to the clearing and settlement of payments, or monetary policy.

Debate Over 'Gore Tax' Heats Up.   (6/4/98)  Battle lines are being drawn over the "Gore Tax" -- a charge on phone bills used to pay for the Federal Communications Commission's expanding universal service programs.  The controversy is not presently over whether there should be a tax, but rather, whether the public should be informed about the tax on their phone bills.  Fearing that such information could erode public support for the Schools and Libraries fund (the "e-rate"), FCC Chairman Kennard wants to stop phone companies from revealing such information.

Parent Sues Livermore Library to Block Internet Porn.  (6/1/98)  A parent of a child who downloaded pornographic pictures at a Livermore California public library filed a lawsuit on May 28 asking the Court to enjoin the library from allowing children access to obscene materials on the Internet, and to obtain monetary damages for any future harm.  See, HTML Copy of Complaint.