4/5. Sen. Charles Schumer (D-NY) introduced S 705, a bill to establish a health information technology grant program for hospitals, skilled nursing facilities, and home health agencies. It was referred to the Senate Finance Committee.
4/5. Sen. Olympia Snowe (R-ME) and Sen. John Kerry (D-MA) introduced S 714, a bill to urge the USTR to pursue the establishment of a small business advocate within the WTO. It was referred to the Senate Finance Committee.
4/5. Sen. Bill Frist (R-TN) introduced S 722, a bill to amend the Communications Act of 1934 to prohibit telemarketers from interfering with the caller identification service of any person to whom a telephone solicitation is made. It was referred to the Senate Commerce Committee. The House Commerce Committee approved a related but not identical bill, HR 90, on February 28.
4/5. Sen. Conrad Burns (R-MT) and Sen. Larry Craig (R-ID) sent a letter to the acting heads of the U.S. Forest Service and Bureau of Land Management regarding proposed rules changes regarding right of way fees and their calculation as provided for under the Federal Lands Policy and Management Act (FLPMA). The proposed changes include a proposal to levy fees on fiber optic cable based on the number of individual strands of fiber in the cable, as opposed to the cable itself. Sen. Burns stated that "This has the potential to slow or shut down the laying of fiber optics, and serves to hinder the technology growth in rural areas like Montana and Idaho."
4/5. The Senate Finance Committee held a hearing titled "Taxpayer Beware: Schemes, Scams and Cons" that examined tax avoidance scams that are promoted via the Internet. Committee Chairman Charles Grassley (R-IA) said in his opening statement [PDF] that "Tax scams are as old as the tax code. The Internet is giving them a thriving new life. The number of participants in these tax scams is growing like a weed. The Internet is greatly helping that growth. The Internet gives these tax con artists the unprecedented ability to reach out to millions of households cheaply and easily." See also, prepared statements of witnesses in PDF: Aaron Bazar (former seller of tax scams), JJ MacNab (American Bar Association), Robert Sommers (attorney), Jay Adkisson (financial adviser), Joseph Hodges (ABA), Hugh Stevenson (FTC, Bureau of Consumer Protection), and Michael Brostek (GAO).
4/5. The House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing titled "Protecting America's Critical Infrastructures: How Secure are Government Computer Systems?" Full committee Chairman Billy Tauzin (R-LA) said in his opening statement that "I don't think that many people realize the extent to which our Federal civilian agencies collect and store such sensitive information -- whether it is medical, financial or otherwise personal information of American citizens, confidential or proprietary data from America's corporations, cutting-edge scientific research or export-controlled information, or even sensitive law enforcement data." See also, prepared statements of witnesses:
• Robert Dacey (General Accounting Office), who stated that "federal computer systems are riddled with weaknesses that continue to put critical operations and assets at risk."
• Glenn Podonsky (U.S. Department of Energy), who provided demonstration of cyber security penetration capabilities.
• Ron Dick (FBI's National Infrastructure Protection Center), who stated that "Currently we have 102 cases (of a current total of 1,219 pending cases) involving computer intrusions into government systems. This includes intrusions into federal, state and local systems, as well as the military. It should be noted that a single case can consist of hundreds of compromised systems that have experienced thousands of intrusions."
• Sallie McDonald (GSA), who stated "that over 100 countries have or are developing information warfare capabilities that could be used to target critical components of the national infrastructure including government systems."
• John Tritak (Department of Commerce).
• Tom Noonan (Internet Security Systems, Inc).
4/5. President Bush gave an speech to the American Society of Newspaper Editors. He addressed trade with the PRC in response to a question. He said: "I believe that China ought to be a trading partner of ours. I think it's in our economic interests to open up the Chinese markets to U.S. products, to U.S. agricultural products. I not only believe it's in our economic interest, I believe it's in our interest to promote U.S. values. And I believe the marketplace promotes values. When people get a taste of freedom in the marketplace, they tend to demand other freedoms in their societies. And so, I'm an advocate of China's entering into the WTO and I'm hopeful that the current situation ends quickly and our people come home. China is a strategic partner, a strategic competitor. But that doesn't mean we can't find areas in which we can partner. And the economy's a place where we can partner. And we've got some differences with China, long-term differences, spreading of weapons of mass destruction is an issue that we need to work with the Chinese on, as well as other nations in that part of the world. Human rights is an issue, but I believe trade will encourage more freedom, particularly when it comes to individual liberties. The marketplace is -- the marketplace unleashes the opportunity for people to make choices, and so I continue to push for trade with China, and -- " See, transcript.
4/5. Congressional Democratic leaders and the Progressive Policy Institute released a document titled Democrats' High Tech Agenda [PDF]. The agenda includes 10 points:
1. Make broadband Internet available to every American by the end of the decade.
2. Help all regions take full advantage of information technology to prosper.
3. Keep costs of access to information technology low and within everyone’s reach.
4. Increase federal support for basic research and development.
5. Support science and technology programs and strong intellectual property protection.
6. Improve math and science education for our children and ensure their computer literacy by the sixth grade.
7. Encourage companies to invest more in training and recruitment, and help workers develop the information technology skills they need.
8. Foster E-business with secure networks and workable solutions to protect personal privacy.
9. Smooth the transition to the Information Age by updating policies on exports, trade, Internet taxation, immigration and small business.
10. Foster E-government to improve efficiency and speed public interactions with government.
See also, statement by House Minority Leader Richard Gephardt (D-MO).
4/5. Rep. Jerry Weller (R-IL) and Rep. Richard Neal (D-MA) introduced HR 1411 IH, the Expensing Technology Reform Act of 2001. The bill would reform the Internal Revenue Code by updating the existing depreciation schedules for high tech assets. Rep. Weller explained the bill in a statement in the Congressional Record. "Currently, businesses must depreciate much of their high tech equipment over a 5 year period. This bill would allow businesses to expense these assets. The 5 year depreciation lifetime for tax purposes is outdated since many companies today must update their computers as quickly as every 14 months in order to stay technologically current. We allow businesses to expense their computers, peripheral equipment, servers, networks, wireless telecommunications equipment, software, high tech medical equipment and copiers in this bill."
4/5. The Universal Service Forum of the Consumer Energy Council of America (CECA) wrote a report on universal service funding, an ancient system of federally mandated subsidies and cross-subsidies in the telecommunications industry, that is now codified in Section 254 of the Communications Act. The report addresses extending the reach of the program to include Internet services. The CECA published an executive summary of the report, but not the report itself, in its web site.
4/5. The USITC held a Section 337 evidentiary hearing regarding the importation of semiconductor chips with minimized chip package size. See, notice of investigation. (Inv. No. 337-TA-432.)
4/5. The USTR's published a notice in the Federal Register stating that its Trade Policy Staff Committee is soliciting public comments on U.S. objectives and preparations for the upcoming meeting of the WTO Ministerial Conference in Doha, Qatar, on November 9-13, 2001. Comments are due by May 10, 2001. See, Federal Register, April 5, 2001, Vol. 66, No. 66, at Pages 18142 - 18143.
4/5. Verizon named Michael Boland to be its SVP for Federal Government Relations. Boland was previously CEO of Boland & Madigan; before that was chief counsel and floor assistant to Sen. Trent Lott (R-MS); and, before that was counsel to the House Commerce Committee. See, Verizon release.4/5. Douglas Davison joined the Washington DC office of the law firm of Wilmer Cutler & Pickering as Of Counsel. He previously was Counsel to former SEC Chairman Arthur Levitt. See, WCP release [PDF]. See also, SEC release of Aug. 4, 2000.
4/5. The Senate Judiciary Committee held a hearing on the nominations of Larry Thompson to be Deputy Attorney General and Theodore Olson to be Solicitor General.
4/4. Many Members of Congress commented on the effect of the PRC hostage crisis on trade relations. Rep. Spencer Bachus (R-AL) stated that "Although Congress voted to provide China with permanent normal trade relations last year, the law also requires Congress to grant a temporary extension of normal trade relations if China does not become a member of the WTO by June 3. The Chinese are not likely to meet that deadline so the President will have to recommend a temporary extension of normal trade relations status for one more year. ... If the current situation continues much longer, I don't see how Members of Congress could possibly vote to give China an extension of trade privileges. We need to send a clear message to the Chinese government." See, release. Rep. Heather Wilson (R-NM) said "I have supported free trade with China and engagement with China's people. That and more is at risk, and not all of it is under the control of the President and his administration. In the coming months this House may consider China's access to the WTO, arms sales to Taiwan, military to military, cultural and scientific exchanges, as well as an array of other issues important to China." Rep. Joe Pitts (R-PA) said "This reckless aggression, the forced landing of our disabled plane, and now the holding of our crew and plane as hostages, and now China's belligerence is outrageous. It violates international agreements that China has signed; it damages U.S.-China relations." Rep. Dave Weldon (D-FL) said "I would encourage every American who is going to go shopping over the next few days to look at the labels on the products they are going to purchase and see if it is made in the U.S.A."
4/4. Sen. Sam Brownback (R-KS) introduced S 696, the Third Generation Wireless Internet Act, a bill to prohibit the FCC from applying spectrum aggregation limits to spectrum auctioned after December 31, 2000. The bill was referred to the Senate Commerce Committee. Sen. Brownback stated that the "wireless industry is fast approaching a crossroads where it will transition from voice and text messaging services to a marriage of wireless mobility with the power of the Internet and broadband Internet access: the ability to deliver voice, video, and data simultaneously over one wireless device. This transition will be made possible by the deployment of third generation technology, commonly referred to as "3G," which combines wireless mobility with transmission speeds and capacity resembling that of the broadband pipes being laid primarily in urban markets by wireline companies." See, Brownback statement.
4/4. Rep. Jerry Weller (R-IL) introduced HR 1411, a bill to amend the Internal Revenue Code of 1986 to allow qualified technological equipment and computer software to be expensed, and to reduce the depreciation period for business computers from the current five years to one. It was referred to the House Way and Means Committee, of which Rep. Weller is a member.
4/4. Rep. Phil English (R-PA) introduced HR 1446, the Standard Trade Negotiating Authority Act of 2001, a bill to provide trade negotiating authority, but not fast track authority. The bill was referred to the Ways and Means Committee and the Rules Committee. Rep. English issued a release which states that "The bill mandates extensive cooperation between the president and Congress in negotiating trade bills. The plan also exempts negotiations under the World Trade Organization from the preauthorization process."
4/4. Rep. Sander Levin (D-MI) introduced HR 1484, a bill to implement the a U.S. Jordan Free Trade Agreement [19 pages in PDF]. The agreement, which may serve as a model for future agreements, covers, among other things, intellectual property rights and electronic commerce, and well as labor and environmental issues. The bill was referred to the Ways and Means Committee and the Judiciary Committee.
4/4. Rep. Ernest Istook (R-OK) introduced HR 1410 a bill which the Congressional Record described as "a bill to foster innovation and technological advancement in the development of the Internet and electronic commerce, and to assist the States in simplifying their sales and use taxes". It was referred to the House Judiciary Committee.
4/4. Rep. John LaFalce (R-NY) introduced HR 1416, a bill to provide grants and other incentives to promote new communications technologies. It was referred to the House Commerce Committee.
4/4. The House Commerce Committee issued its report on HR 718, the Unsolicited Commercial Electronic Mail Act of 2001, sponsored by Rep. Heather Wilson (R-NM) and Rep. Gene Green (D-TX). (See, Rept. 107-41 Pt. 1).
4/4. The U.S. District Court (SDFl) entered judgment against Sean Healey enjoining him from further violations of § 17(a) of the Securities Act of 1933 and § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court further ordered disgorgement and a civil penalty. The SEC alleged that Healey and other defendants used wash sales to create the appearance of active stock trading in the stock of New Directions Manufacturing, Inc., a company quoted on the NASD's OTC Bulletin Board system. Healey and another defendant then arranged to have a false and misleading research report published on a stock-picker web site, on their own web site, and through unsolicited mass e-mails. See, SEC release.
4/4. The House passed HR 8, a bill to phase out the estate and gift tax over a 10 year period by a vote of 274 to 154, and then recessed until April 24, for the traditional Easter break. The Senate will recess later this week when it completes its consideration of President Bush's budget.
4/4. The House Commerce Committee's Telecom Subcommittee held a hearing titled the E-Rate and Filtering: A Review of the Children's Internet Protection Act. Last year, the Congress passed, and President Clinton signed, legislation containing the CIPA. The statute requires schools and libraries receiving e-rate subsidies to use filtering technologies on computers with Internet access that are used by children. The ACLU and American Library Association have filed lawsuits challenging the constitutionality of the CIPA as applied to libraries.
Hearings on legislation are usually held before legislation is enacted. Nevertheless, this hearing gave proponents and opponents of the CIPA another opportunity to state their views. Rep. Chip Pickering (R-MS) and Rep. Steve Largent (R-OK) argued that the statute is necessary to protect children, and that it is constitutional. On the other hand, Rep. Jane Harmon (D-CA) said that "I am not sure that these tools should be mandated by the government." Rep. Roy Blount (R-MO) said that "there are good arguments on both sides."
Marvin Johnson of the ACLU verbally sparred with Reps. Pickering and Largent. He testified that the statute is unconstitutional, that filtering does not work, and that pormography does not harm children. One librarian (Laura Morgan of the Chicago Public Library) testified in support of the bill, and argued that men who view pormography at the public libraries create a hostile environment for the women who work in or use the libraries. Another librarian (Carolyn Caywood of Virginia Beach's library system) testified that local libraries, not the federal government, should set Internet access policies. Two representatives of companies that provide filtering software testified that filtering does work, as did Bruce Taylor, of the National Law Center for Families and Children.
4/4. The Senate Finance Committee held a hearing titled International Trade and the American Economy. The witnesses were Alan Greenspan and Mickey Kantor. Greenspan said in his prepared testimony that "there is also no doubt that this transition to the new high-tech economy, of which rising trade is a part, is proving difficult for a large segment of our workforce ... . This is most evident in the rising fear of job skill obsolescence that has induced a marked increase in experienced workers going back to school -- often community colleges -- to upgrade their skills for a rapidly changing work environment. While major advances in standards of living are evident among virtually all nations that have opened their borders to increased competition, the adjustment trauma resulting from technological advances as well as globalization has also distressed those who once thrived in industries that were once at the cutting edge of technology but that have become increasingly noncompetitive." He added, "Yet the protectionist propensity to thwart the process of the competitive flow of capital, from failing technologies to the more productive, is unwise and surely self-defeating." See also, prepared statement [PDF] of Chairman Charles Grassley (R-IA).
4/4. Rep. Duncan Hunter (R-CA) introduced a bill to revoke normal trade relations status for the People's Republic of China. He stated that "A favored trading partner with our country would follow proper protocol and not continue to hold our service men and women, along with our equipment, after being asked for their return. The fact is, while we trade with China, they prepare for war. The Communist regime is producing long-range ballistic missiles, which are targeted at U.S. military bases and American cities. They have engaged in espionage activities in which U.S. military secrets were stolen and they have developed weapon systems that threaten the U.S. and its allies." See, Hunter release. The bill would revoke the trade status that the U.S. extends to the PRC on an annual basis. Last year the U.S. extended permanent normal trade relations status (PNTR) to the PRC. However, that only takes effect when the PRC joins the World Trade Organization. The negotiations over PRC ascension to the WTO drag on.
4/4. The House Judiciary Committee's Subcommittee on Courts, Internet, and Intellectual Property held a hearing on business method patents. Rep. Howard Coble (R-NC), the Chairman of the Subcommittee, defended business method patents in his opening statement. He stated that "intellectual property and the Internet are compatible. In fact, there is a long history of method patents and software enabled inventions." Rep. Howard Berman (D-CA) and Rep. Rick Boucher (D-VA) advocated legislation to reform the business method patents process. On April 3 they introduced HR 1333, the Business Method Patent Improvement Act of 2001. Rep. Zoe Lofgren (D-Silicon Valley) and Rep. Asa Hutchison (R-AR) also attended, but did not speak. Rep. John Conyers (D-MI), the Ranking Member of the full committee, did not attend, but submitted a statement for the record.
Rep. Berman stated two concerns about business method patents in his prepared statement. First, "Should patent protection be granted to processes for achieving a business objective when such processes involve no physical transformation, physical element, technological innovation, or industrial application? Put another way, should an abstract idea for conducting or organizing business operations receive patent protection?" He continued that "My second set of concerns involves the quality of some business method patents issued by the PTO in recent years." See also, April 3 statement in the Congressional Record.
Rep. Boucher stated that "something is fundamentally wrong with a system that enables individuals to get patents for doing the seemingly obvious. Some examples. Priceline today is utilizing a business method patent on a reverse auction, name your own price system, on the Internet. This patent was awarded even though the market economy of the western world, and the entire theory of microeconomics, is predicated on individuals setting the price at which they are willing to purchase something." He added that the awarding of business method patents results in "the restriction of competition, and the lessening of innovation, precisely the opposite of the result that the patent laws are designed to achieve."
Nicholas Godici, the acting head of the USPTO, reviewed the "Business Methods Patent Initiative," a program intended to improve the process. The USPTO is establishing partnerships with affected industries so that they can educate patent examiners, establishing "Electronic Information Centers" which provide examiners with access to over 900 databases, confirming that patent examiners have authority to ask for information that may be necessary to examine a patent application, and instituting a second level review of allowed business method patent applications. He stated that the result of the initiative has been a decrease in the allowance rate.
Michael Kirk, Exec. Dir. of the American Intellectual Property Law Association (AIPLA), and Ronald Myrick, President of the Intellectual Property Owners Association (IPO) both stated their opposition to any legislation in the area of business method patents.
Andrew Steinberg, General Counsel of Travelocity, was the sole witness to oppose business method patents. He said that "we believe that the proliferation of these patents represents a serious threat to the growth of electronic commerce and, if left unchecked, could impede the ability of many businesses to adapt to the Internet. We urge Congress to take prompt action to prevent this from occurring." He also expressed support for the Berman Boucher bill.
4/4. Rep. Coble stated at the hearing on business method patents that "My number one priority in Congress is to work to ensure that the PTO can retain all of its fees to improve the quality of examination to be as high as humanly possible." On April 3, Reps. Berman and Boucher introduced H.Res. 110, a resolution that would accomplish this. Rep. Conyers suggesting in his statement that one of the root problems with business method patents is that the diversion of fees deprives the USPTO of the funds necessary to modernize. The IPO's Myrick, and the AIPLA's Kirk, both stated their support for ending the diversion. However, the Kirk noted that under President Bush's budget, $200 Million may be diverted in FY 2002.
4/4. Rep. John Dingell (D-MI), the Ranking Member of the House Commerce Committee, gave an address in Washington DC in which he advocated FCC reform and passage of the Tauzin Dingell bill. "The FCC must be transformed to meet the needs of the Information Age," said Dingell. "Too often the FCC is hamstrung by dint of its antiquated design. Separate bureaus assigned to each segment of the industry may have worked well enough in days gone by. But today the FCC's fiefdom mentality is simply a relic – ill-equipped to handle the convergence of technology that is at the heart of this modern industry." He added that "It makes no sense for broadband services offered by a cable company to be regulated differently than broadband services offered by a telephone company, wireless provider, or any other communications company for that matter. That is why Chairman Tauzin and I introduced HR 2420 last Congress" and "intend to re-introduce broadband regulatory reform legislation shortly after the Spring recess".
4/4. Telephone and Data Systems filed a comment [PDF] with the FCC in support of Verizon Wireless's petition to the FCC [PDF] of March 27 to defer action on ITFS and MDS applications. "TDS agrees with Verizon Wireless that the FCC should not now take actions which may preclude use of the 2500-2690 MHz band for 3G purposes." TDS continued that "it is, at present, difficult to discern a clear path to an adequate allocation of spectrum for 3G purposes. Yet the public interest requires that a path to an adequate frequency allocation for 3G must somehow be found. Such a path may involve innovative forms of spectrum sharing or segmentation or new types of frequency pairing. And, given the Defense Department's adamant opposition to giving up many of the frequencies it uses, the FCC may have to consider reallocation or sharing of some of the MDS/ITFS frequencies, if there is to be a 3G allocation. Thus, TDS believes Verizon Wireless to be entirely correct that the FCC's Mass Media Bureau should not now grant the pending two-way applications."
4/4. SBC submitted a Section 271 petition to the FCC for permission to offer long distance service in Missouri. On March 6 the Missouri Public Service Commission endorsed SBC's application. See, SBC release.
4/4. The Senate Judiciary Committee's Immigration Subcommittee held a hearing on immigration policy. Sen. Sam Brownback (R-KS), the new Chairman of the Subcommittee, presided. See, statement of Sen. Pat Leahy (D-VT), Ranking Member of the full committee.
4/4. The House Veterans' Affairs Committee's Oversight and Investigations Subcommittee held a hearing on information technology. See, prepared testimony of witnesses: Richard Griffin (Inspector General, Department of Veterans Affairs),
McClure (General Accounting Office), Ken
Brandt (Tiger Testing), Scott
Sherman (EMC2 Corporation), Karl
Ware (BioNetrix Systems Corporation), and Anthony
Principi (Secretary, Department of Veterans). McClure testified that
"the department has encountered numerous and consistent challenges
associated with managing IT, including ... ineffective computer security
management." In addition, House Speaker Dick
Armey (R-TX) submitted a statement
for the record, in which he stated that the VA "is not the only agency with
such a poor track record." He cited the Horn subcommittee report on agency
computer security, and last year's GAO report that found that 97% of federal
agency web sites failed to meet the privacy standards recommended by the FTC for
private sector web sites. He concluded by condemning "the Clinton
Administration's eleventh hour imposition of new regulations addressing medical
privacy issued under the Health Insurance Portability and Accountability Act (HIPAA)"
for "putting even more private, personally identifiable medical information
in the hands of health care bureaucrats."