News Briefs from August 1-5, 2001

Sen. Hollings Introduces Structural Separation Bill
8/3. Sen. Ernest Hollings (D-SC), the Chairman of the Senate Commerce Committee, introduced the Telecommunications Competition Enforcement Act of 2001. This bill would require structural separation of the Regional Bell Operating Companies (RBOCs) into wholesale and retail units.
Walter McCormick, the P/CEO of the USTA, and group which represents the interest of the RBOCs, stated that "This proposal to carry out a split of local telephone companies has been wisely and repeatedly rejected in the past for one reason: consumers are the biggest losers. If you force phone companies to unbundle the services they offer to consumers, you force the newly split companies to make up for these legislated inefficiencies by either increasing their prices or decreasing their quality of service." See, USTA release.
In contrast, Russell Frisby, P/CEO of CompTel, stated that "Given the Bells' refusal to honor their legal commitments to open their local networks as codified in the Telecommunications Act of 1996, there really is no other choice ... . CompTel has long maintained that separating the Bells into wholesale and retail units is the only way to ensure that Bells give up their local phone monopolies." See, CompTel release.
Reps. Cannon and Boucher Introduce Internet Music Copyright Bill
8/3. Rep. Chris Cannon (R-UT) and Rep. Rick Boucher (D-VA) introduced the Music Online Competition Act of 2001 (MOCA), a bill to amend several sections of the Copyright Act regarding music and the Internet.
The bill would expand the in store exemption to include playing music segments over the Internet, expand the software backup exemption to include copying digital music for backup or incidental purposes, and expand the ephemeral copy exemption by allowing broadcasters and webcasters to make multiple copies. It would also require record companies that license an affiliate to also license independent non affiliated distribution services. It would also amend the compulsory licensing section to address certain digitally delivered music.
The bill will go to the House Judiciary Committee, and its House Courts, Internet, and Intellectual Property Subcommittee, of which both Rep. Cannon and Rep. Boucher are members. However, a recent hearing of the subcommittee revealed that some other members, and some industry groups, do not favor some of the provisions contained in the bill.
Rep. Cannon stated on introducing this bill that "The copyright law's present music licensing system is unique in its complexity and problems. The Internet has demonstrated a need for streamlining and clarification. Under current law, it is impossible for any online company - whether a behemoth like MusicNet or a small company like Listen.Com - to obtain the necessary licenses in a timely and efficient way." See, Rep. Cannon's statement.
Rep. Boucher stated that the bill will "promote a legitimate online music marketplace" by removing obstacles in the copyright laws. See, Rep. Boucher's statement and summary of the bill.
Summary of the MOCA
The bill was printed on 18 pages. It is organized in seven sections. Section 1 is the title of the bill.
Section 2 expands the in store exemption to infringement (17 U.S.C. § 110(7)) to include sampling over the Internet. Currently, it is not an infringement of copyright if a store plays music, if there is no admission charge, and "the sole purpose of the performance is to promote the retail sale of copies". Section 2 expands this exemption to include the playing of up to 30 seconds of a song (up to 60 seconds for long recordings) "by digital audio transmission, by or through a digital online service open to the public at large".
Section 3 makes changes to the emphemeral recordings exception to exclusive rights (17 U.S.C. § 112). Current law allows a broadcaster to make one copy "for purposes of archival preservation or security". Section 3 of the bill would allow broadcasters and webcasters to make "one or more copies". Rep. Boucher explained that the purpose of this is "to accommodate the need for different bit rates (e.g., dial-up, broadband), different formats (e.g., RealPlayer or Windows Media Player), and caching throughout the network to ensure efficient and timely delivery to consumers."
Section 6 expands the software backup exemption to infringement (17 U.S.C. § 117) to include digital music. Under current law the owner of a copy of a computer program is allowed to make a backup copy. Section 6 of the bill would expand this to include back up copies of music files acquired by digital delivery. The bill would also permit copying of digital music files that "is incidental to the operation of a device in the ordinary course of the use of a work", thereby permitting buffer copies to be made in the course of browsing or webcasting.
Section 4 changes existing law regarding licensing for transmission (17 U.S.C. § 114). It would, among other things, require record companies to license independent non- affiliated distribution services. It provides that "If the copyright owner of a sound recording licenses an affiliated entity the right to reproduce the copyrighted work, to distribute the copyrighted work to the public by means of a digital phonorecord delivery or to perform the copyrighted work publicly, the copyright owner shall make the licensed sound recording available on no less favorable terms and conditions to all bona fide entities that offer similar services".
Section 5 changes existing law regarding compulsory licensing (17 U.S.C. § 115) with respect to compulsory licensing of digital music. However, Rep. Cannon insisted that "RIAA has said that MOCA contains a compulsory license for performance rights. That is just not true."
Section 7 requires the Copyright Office to conduct an evaluation, and write a report that includes recommendations for further legislation by the Congress.
RIAA Reaction to MOCA
8/3. The Recording Industry Association of America (RIAA) opposes the bill, and promises to fight it. Hillary Rosen, the P/CEO of the RIAA had this to say: "A protracted legislative fight will not move us closer to where the music industry wants to be - delivering music to fans through a variety of different, innovative websites. Unfortunately, the Cannon/Boucher bill introduced today will divert time, energy and resources from achieving that goal. It is essentially a solution -- a very bad solution -- in search of a problem."
Rosen continued: "The bill substitutes government regulation for the marketplace. This is not only wrong, it is also inconsistent with the strongly held views of experts and the private sector that government regulation of the Internet would be a disastrous mistake. Many in the industry will fight this bill aggressively because we know that the marketplace is already moving in the right direction and that consumers will be served well by both the current and coming plans for online music services." See, RIAA release.
Computer Security Lacking at the Commerce Department
8/3. The House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing titled "How Secure is Sensitive Commerce Department Data and Operations? A Review of the Department's Computer Security Policies and Practices." Witnesses from the General Accounting Office (GAO) and Department of Commerce (DOC) testified that the Department's systems are not secure.
Rep. Jim Greenwood (R-PA), the Chairman of the Subcommittee, said in his opening statement that the "GAO’s team of ethical hackers identified and exploited vulnerabilities in the computer systems of these divisions to gain virtually unlimited access to them internally, from within the Department’s network, and externally, from the Internet. Not only could these systems be accessed without authorization, but the information contained in them could be read, modified, or deleted at will – even with respect to the most sensitive systems and data files within these seven divisions. And with such access also comes the power to completely disrupt critical Department operations." See also, prepared statement of Rep. Billy Tauzin (R-LA), Chairman of the full Committee.
Robert Dacey of the GAO stated in his prepared testimony that "controls intended to protect information systems and critical data from unauthorized access are ineffectively implemented, leaving sensitive systems highly susceptible to intrusions or disruptions." He continued that "Commerce is not adequately (1) preventing intrusions before they occur, (2) detecting intrusions as they occur, (3) responding to successful intrusions, or (4) reporting intrusions to staff and management. Thus, there is little assurance that unauthorized attempts to access sensitive information will be identified and appropriate actions taken in time to prevent or minimize damage." Finally, he stated that "Commerce does not have an effective departmentwide information security management program to ensure that sensitive data and critical operations are adequately addressed and that appropriate security controls are in place to protect them".
See also, prepared testimony of Johnnie Frazier (DOC Inspector General) and prepared testimony of Samuel Bodman (DOC Assistant Secretary for Technology Policy).
FCC NOI Re Video Competition
8/3. August 3 was the deadline to file comments with the FCC in its Notice of Inquiry [PDF] regarding video competition. On June 20, 2001 the FCC adopted a Notice of Inquiry (NOI) into the status of competition in the market for the delivery of video programming. The FCC stated in a release that "The NOI seeks information that will allow the FCC to evaluate the status of competition in the video marketplace, prospects for new entrants to that market, and its effect on the cable television industry and consumers. The NOI also solicits information regarding the extent to which consumers have choices among video programming distributors and delivery technologies." See, for example, comment submitted by Motorola and comment submitted by AT&T. Reply comments are due by September 5. See, CS Docket No. 01-129.
8/3. The Senate confirmed Jon Huntsman to be a Deputy United States Trade Representative. See, USTR release.
More News
8/3. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Pool Water Products v. Olin, a private antitrust action brought under Section 5 of the Clayton Act.
8/3. The ICANN released an agenda for its September 9 meeting in Montevideo, Uraquay.
8/3. Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) published a notice in the Federal Register that withdraws Federal Acquisition Regulation (FAR) case 2000-014, Signing and Retention of High-Technology Workers. This FAR, which was published in the Federal Register on December 28, 2000, proposed to explicitly make allowable signing and retention bonuses in order to recruit and retain workers that have critical technical skills. The August 3 stated that a reason for the withdrawal is that signing and retention bonuses were already permissible. See, Federal Register, Aug. 3, 2001, Vol. 66, No. 150, at Pages 40837 - 40838.
Court Upholds Copyright Office Rule on Webcasting Music
8/2. The U.S. District Court (EDPenn) issued its opinion in Bonneville v. Peters (also known at National Association of Broadcasters v. Copyright Office), regarding the Copyright Office's rules regarding webcasting music over the Internet.
The Copyright Office (CO) adopted new rules [PDF] on December 11, 2000. It determined that AM/FM broadcast signals transmitted simultaneously over a digital communications network, such as the Internet, are not exempted by Section 114(d)(1)(A) of the Copyright Act from paying royalties. Plaintiffs filed a complaint in U.S. District Court on January 25, 2001, against Marybeth Peters, the Register of Copyrights, seeking to have this rule overturned. On August 1, the District Court upheld the rule.
Edward Fritts, the P/CEO of the NAB stated that "Broadcasters, record companies and consumers have long enjoyed a symbiotic relationship whereby airplay on radio stations benefits all parties, along with generating enormous revenues for the record labels. We’re disappointed that this unique relationship will be disrupted by the court ruling. Broadcasters currently pay in excess of $300 million annually in music licensing fees to compensate songwriters and music publishers. Any additional fee to compensate record companies would be unfair and unreasonable, and for that reason, we are reviewing our options." See, NAB release.
Hillary Rosen, P/CEO of the RIAA, had this to say: "We are pleased that the court upheld the rights of artists and record companies. We now look forward to working with the broadcasters for a smooth transition into this marketplace." See, RIAA release.
Freedom of Information Limited by State Copyright
8/2. The U.S. Court of Appeals (2ndCir) issued its opinion in Suffolk County v. First American, a case involving state freedom of information law and copyright law. The Appeals Court held that states may assert copyright to prevent the dissemination of public records obtained under freedom of information laws.
First American and others published copies of official tax maps made by Suffolk County, without permission. Suffolk County has registered copyrights in these maps. Suffolk County filed a complaint in U.S. District Court (SDNY) against First American and others alleging copyright infringement. Defendants argued that New York's Freedom of Information Law prevents the County from asserting copyright. The District Court agreed, and dismissed the complaint. This appeal followed.
The Appeals Court ruled that states, and their political subdivisions, may possess copyrights; that the tax maps in question have sufficient originality to be copyrightable; that the tax maps in question are not in the public domain; that New York's state freedom of information law does not abrogate copyright interests; and that Suffolk County may pursue an infringement suit against defendants. Reversed and remanded.
Senate Committee Approves NTIA Nominee Nancy Victory
8/2. The Senate Commerce Committee held a hearing on August 1 on several pending nominations, including that of Nancy Victory to be Assistant Secretary of Commerce for Communications and Information. On August 2 the Committee voted en bloc to approve these nominations without any dissenting votes. Victory is on track to become the next head of the National Telecommunications and Information Administration (NTIA). William Hatch has been acting head since the departure of Greg Rohde shortly after the inauguration of President Bush.
Role of the NTIA. Sen. Conrad Burns (R-MT) described the NTIA as "one of the most important seats" at the Department of Commerce at the August 1 hearing. It has spectrum management responsibilities with respect to spectrum bands assigned for government use. This puts it at the center of the debate over locating and reallocating spectrum for use by third generation (3G) wireless services, which is intended to bring broadband Internet access to portable devices. Similarly, the NTIA is involved in the debate over emerging ultrawideband (UWB) technologies. It also administers a grant program for communications related projects. Finally, it serves as the administration's advocate before the FCC, the Congress, and in public forums on many communications and Internet issues.
Victory testified that her two main issues will be locating spectrum for new uses, and promoting broadband deployment. In response to a question from Sen. Byron Dorgan (D-ND), she stated that she hoped to be an "activist". Sen. Burns advised her that "your function is primarily in the area of policy."
Broadband Deployment. Sen. George Allen (R-VA) asked Victory about efforts to promote deployment of broadband Internet access services in rural areas. She responded that this is "definitely a goal". She added that "I don't believe that the administration has taken a position on any of the legislative proposals yet." Nor did she state her views on the Tauzin Dingell bill, or any other legislative proposals. She only stated that any government action "should be technology neutral." Sen. Allen added that in addition to copper and cable, fiber, wireless, and satellite will be important to broadband deployment.
Sen. Dorgan also used to occasion to advocate broadband deployment in rural areas, such as his home state of North Dakota. He stated that broadband access "has to be supported by the Universal Service Fund."
3G Wireless. Sen. Allen asked her, "Would you be willing to identify the most promising chunks of the spectrum?" She responded, "I don't think I could identify for you what is the best option." She continued that her role would be to try to create a climate in which all sides come to the table and compromise. She also ducked a question on the timing of the 1710-1755 MHz spectrum auction. Finally, she suggested that she would institute incentives for efficient use of spectrum; however, she added, "I don't know what those mechanisms would be at this time."
Conflicts of Interest. Sen. Dorgan questioned Victory about conflicts of interest, and a story in the Wall Street Journal on August 1 that stated that Victory and her husband "own large amounts of stock in companies such as Verizon Communications Corp. that would benefit from controlling valuable government- owned airwaves needed to deliver advanced "third generation" wireless-data services ..." She responded that "I no longer own that stock. I sold it quite a while ago." She also stated that there is one matter in which she will recuse herself -- ultrawideband (UWB). Sen. Dorgan expressed his support for her confirmation.
Revolving Door for Telecom Lawyers
Victory is just one of many telecom lawyers who have moved between the Washington DC law firms, such as Wiley Rein & Fielding (WRF), that represent telecom and Internet companies and trade groups, and the government agencies and offices, such as the NTIA and FCC, that regulate them.
Victory until recently was a partner at WRF. Her husband, Michael Senkowski, remains head of WRF's Communications Practice. He is also a former Administrative Assistant to the Chairman of the FCC. Victory will join many other former WRF attorneys who now hold top positions in government regulating telecom and Internet companies. Kevin Martin, one of the five FCC Commissioners, was once an associate at WRF. Bryan Tramont, who is Senior Legal Advisor to newly appointed FCC Commissioner Kathleen Abernathy, also worked at WRF. Maria Cino, the new Assistant Secretary of Commerce and Director General of the United States and Foreign Commercial Service, is another WRF veteran. Bruce Mehlman, who is now Assistant Secretary of Commerce for Technology Policy, has also worked at WRF, as well as on the Hill.
Similarly, WRF is full of attorneys who have worked at the regulatory bodies. For example, lead partner Richard Wiley is a former FCC Chairman. Finally, Victory will replace Greg Rohde, who has never worked at WRF. However, before moving to the NTIA, he was the top telecom aide to Sen. Dorgan, who presided over Victory's confirmation hearing.
GAO Reports on Legal Fees Paid to Attorneys for IP and Antitrust Work
8/2. The GAO issued a report [PDF] titled "Hourly Fees Paid by Various Federal Agencies to Private Attorneys for Legal Services". The report was prepared at the request of Rep. William Delahunt (D-MA), a member of the House Judiciary Committee.
Intellectual Property Services. The report addressed fees paid by NASA and the Veterans Administration (VA) for legal services involving intellectual property law. It stated that NASA paid $210 per hour to prepare a patent application. Also, the VA paid an average of $308 per hour for "advice on the government's legal rights in certain software products and on the potential liability under various trade secret laws."
Antitrust Division. Another item in the report is that in FY 2000 "the Antitrust Division had 17 contracts and paid an average hourly fee of $271." The report did not identify the names of firms or individual attorneys, or the work which they performed. Nor did it state whether $271 per hour was paid for work on competitive analyses of applications to provide in region interLATA services.
Appeals Court Denies Microsoft's Motion for Rehearing
8/2. The U.S. Court of Appeals (DCCir) issued an order [PDF] denying both Microsoft's July 18 Petition for Rehearing and the government's July 13 Motion for Immediate Issuance of Mandate. Microsoft had sought review on the sole issue of commingling of certain software code specific to web browsing with software code used for other purposes in certain files in Windows 98. Microsoft stated that the June 28 opinion of the U.S. Court of Appeals "accepted the district court's conclusion that such "commingling" had occurred and that it violated Section 2 of the Sherman Act. The Court's ruling with regard to "commingling" of software code is important because it might be read to suggest that OEMs should be given the option of removing the software code in Windows 98 (if any) that is specific to Web browsing."
The Court wrote, in its brief order, "Upon consideration of appellees' motion for immediate issuance of the mandate, the response thereto, appellant’s petition for rehearing, and the response thereto, it is ORDERED that the motion for immediate issuance of the mandate be denied. It is FURTHER ORDERED that the petition for rehearing be denied. Nothing in the Court’s opinion is intended to preclude the District Court’s consideration of remedy issues."
Steve DelBianco, VP of the Association for Competitive Technology (ACT), a pro Microsoft group, criticized the Court's order. He stated in a release that "The industry needs some clarity on this matter, since it is not completely clear as to whether the appeals court ruling on "commingling of code" was narrow and relevant only to user access to the browser, rather than to other innovations in Windows. Continued confusion on this matter could be disastrous given the life or death stakes for the thousands of programmers currently porting their software to Windows XP. These programmers and their companies have made a crucial business decision to rely upon those features to be part of the operating system and deserve to have some stability sooner rather than later."
AMT Relief Bill Introduced
8/2. Represenatives Richard Neal (D-MA), Tom Davis (R-VA), Zoe Lofgren (D-CA), Jerry Weller (R-IL), and 9 others introduced a bill in the House to reform the Alternative Minimum Tax (AMT) treatment of Incentive Stock Options (ISOs). The bill would provide relief to some workers at high tech companies who exercised stock options before their companies' stock prices plummeted in 2000.
The problem with existing tax law, say the sponsors, is an unfair anomaly in the tax code. Some employees exercised incentive stock options in 2000 provided by their employers. The price of the stock at the time that the employee exercised the option was often much higher than the price when the option was granted. Hence, the employee realized a significant gain. However, many of these employees then held on to the stock, for example, to obtain long term gains tax treatment. But then, for many of these employees, the price of the stock dropped precipitously. This left some employees with a huge tax bill -- sometimes more than the value of the stock, or even their entire net worth. See, sponsors' release.
Related Bills. Sen. Joe Leiberman (D-CT) introduced a companion bill in the Senate. The bill introduced on August 2 refines HR 1487, which Rep. Lofgren introduced on April 4. The list of sponsors of HR 1487 grew to 49 members.
Current Law. Incentive Stock Options is codified at 26 U.S.C. § 422. The Alternative Minimum Tax is codified at 26 U.S.C. § 56.
Text of Bill. The bill provides, in relevant part, as follows: "In the case of an incentive stock option (as defined in section 422 of the Internal Revenue Code of 1986) exercised during calendar year 2000, the amount taken into account under section 56(b)(3) of such Code by reason of such exercise shall not exceed the amount that would have been taken into account if, on the date of such exercise, the fair market value of the stock acquired pursuant to such option had been its fair market value as of April 15, 2001 (or, if such stock is sold or exchanged on or before such date, the amount realized on such sale or exchange)."
Sponsors. The thirteen original sponsors of the bill include representatives of districts with concentrations of high tech companies, including Lofgren (Silicon Valley), Dunn (Seattle area), Davis, Moran and Wolf (northern Virginia), Doggett (Austin, Texas), and Cannon (Provo and Orem, Utah). There are also several members of the Ways and Means Committee, which has jurisdiction, on the sponsorship list, including Neal, Weller, Matsui, and Dunn.
House Subcommittee Approves 5 Year Extension of Internet Tax Freedom Act
8/2. The House Judiciary Committee's Commercial and Administrative Law Subcommittee approved HR 1552 the Internet Tax Nondiscrimination Act, on a voice vote. The bill would extend for five years the current moratorium on multiple or discriminatory Internet taxes, and taxes on Internet access. The current moratorium, which was enacted in the Internet Tax Freedom Act in 1998, is set to expire on October 21.
Rep. Bob Barr (R-GA), Chairman of the Subcommittee, presided. He said that without an extension, "I think you would see some liberties being taken with taxation of the Internet." He stated that "we have got to get something through very quickly that will preserve the moratorium." He added that a 5 year extension is a compromise, noting that many Members would prefer the permanent extension contained in HR 1675, which is also titled the Internet Tax Nondiscrimination Act. Finally, he said that "I think the administration agrees with us."
Gekas Amendment. Rep. Barr pointed out that "Internet sales comprise less than 1% of total retail sales." Rep. George Gekas (R-PA) offered, but then withdrew, an amendment that would provide that the moratorium be extended for 5 years, or until the total value of retail goods sold in electronic commerce in the U.S. reaches 5 percent of the total value of all retail goods sold in the U.S., whichever comes first.
Quill Decision. Rep. Mel Watt (D-NC) and Rep. Jerrold Nadler (D-NY) both argued that any legislation should both extend the current moratorium, and address state collection of sales and use taxes, which is not affected by the moratorium. Currently, Quill v. North Dakota, 504 U.S. 298 (1992), provides that state and local taxing authorities are barred under the Commerce Clause from requiring remote sellers without a substantial nexus to the taxing jurisdiction to collect sales taxes for sales to persons in the jurisdiction; however, the Court added that Congress may extend such authority.
Sales Tax Bills. Congress has passed no legislation pertaining to sales and use taxes. However, there are several bills pending in the Congress that would provide this authority. See, for example, HR 1410, sponsored by Rep. Ernest Istook (R-OK), and S 512, sponsored by Sen. Byron Dorgan (D-ND). Moreover, several Senators have attempted, unsuccessfully, to draft a "compromise bill" that would allow states to require remote sellers to collect sales taxes. The main issue in dispute involves requiring states to simplify their tax codes.
Rep. Nadler stated that "I don't believe we can totally divorce these two issues." He added that an impending expiration of the moratorium "leverage" for passing a sales and use tax bill, and that passing a five year extension would take away this leverage. Rep. Watt stated that the moratorium extension and sales tax issues "should continue on parallel tracks."
Watt Amendment. Rep. Watt offered an amendment that provides that "states are authorized to enter into an Interstate Sales and Use Tax Compact", and that after being signed by the 25 states, the "Congress shall consent to the Compact within  365 days ... after the adopting States transmit the Compact to Congress or such compact shall be deemed to be withdrawn after the 365 day period." Rep. Barr ruled the amendment non germane. Rep. Nadler stated that he too had an amendment to offer, but would save it for the full committee mark up session.
More New Bills
8/2. Sen. Joe Lieberman (D-CT) introduced S 1324, the Senate companion bill to the House bill to reform the Alternative Minimum Tax (AMT) treatment of Incentive Stock Options (ISOs). The bill would provide relief to some workers at high tech companies who exercised stock options before their companies' stock prices plummeted in 2000. The bill was referred to the Senate Finance Committee.
8/2. Sen. Maria Cantwell (D-WA) introduced S 1337, a bill to provide for national digital school districts. The bill was referred to the Committee on Health, Education, Labor, and Pensions.
8/2. Sen. Byron Dorgan (D-ND) and Sen. Ted Stevens (R-AK) S 1342, a bill to allocate H-1B visas for demonstration projects in rural areas. The bill was referred to the Senate Judiciary Committee.
8/2. Sen. Max Baucus (D-MT) and Sen. Robert Byrd (D-WV) introduced S 1347, a bill to establish a Congressional Trade Office. The bill was referred to the Committee on Governmental Affairs.
People and Appointments
8/2. The Senate Judiciary Committee, and then the full Senate, approved the nomination of William Riley to be U.S. Circuit Judge for the Eighth Circuit.
8/2. The Senate confirmed Robert Mueller to be FBI Director by a vote of 98 to 0.
8/2. President Bush announced his intent to nominate Roscoe Howard to be U.S. Attorney for the District of Columbia. See, White House release.
8/2. President Bush nominated Jeffrey Howard to be a U.S. Circuit Judge for the First Circuit, and Terrence O'Brien to be a U.S. Circuit Judge for the Tenth Circuit. See White House release.
8/2. Sony's U.S. holding company named Nicole Seligman to be General Counsel. She is a partner in the Washington DC law firm of Williams & Connolly. She was one of former President Clinton's impeachment defense attorneys. She is also married to Joel Klein, who was an Assistant Attorney General in charge of the Antitrust Division in the Clinton administration, and architect of the Microsoft antitrust litigation.
8/2. The RIAA named Joel Flatow to be its General Manager, West Coast Affairs. See, RIAA release.
More News
8/2. USTR General Counsel Peter Davidson gave testimony to the U.S.-China Security Review Commission regarding the PR China's imminent accession to the WTO.
8/2. The U.S. Court of Appeals (2ndCir) issued its opinion in Morris v. Business Concepts, a copyright infringement case involving registration requirements.
8/2. The Department of Justice fined Unisys $1,430,000 for failing to disclose information to the government during 1990 contract negotiations. See. DOJ release.
8/2. Rhythms NetConnections, a DSL service provider, filed a Chapter 11 petition for bankruptcy in U.S. Bankruptcy Court (SDNY).
8/2. The Copyright Office published a notice [PDF] in the Federal Register of several very minor changes to its rules found at 37 CFR 202.1 and 202.17. Each correction changes Latin phrases into italic font.
Senate to Take Up Export Control Bill After Recess
8/1. Senate Majority Leader Tom Daschle (D-SD) said in the Senate that he anticipates that S 149, the Export Administration Act of 2001, sponsored by Sen. Mike Enzi (R-WY) will be brought up on September 4, and if necessary, cloture will be filed September 7. The bill would modernize export control laws. It would ease restraints on most dual use products, such as computers and software, but increase penalties for violations. The Senate Banking Committee passed the bill in March with only one negative vote. The Bush administration supports it. The bill is opposed by a small group of Senators who assert that it would harm national security.
Sen. Enzi released a statement in which he said that "This bill has such strong bipartisan support, it's a shame that it has taken this long to work through. I'm confident we'll have the bill passed quickly. Quick passage of this bill is in fact what President Bush has called for. The country needs this bill to enhance both our security and economic interests."
Internet Taxes
8/1. The Senate Finance Committee held a hearing on whether to extend the existing Internet tax moratorium, and whether to allow state and local governments to impose sales taxes on remote sellers, including Internet retailers. Sen. Max Baucus (D-MT), Chairman of the Committee, said in his opening statement [PDF] that "I, frankly, have not made up my mind yet on what is the best way to proceed." The existing moratorium expires this fall. See also, opening statement [PDF] by Sen. Charles Grassley (R-IA), the ranking Republican.
See also, prepared statements in PDF by Tom Woodward (Congressional Budget Office), Frank Shafroth (National Governors Association), David Bullington (Wal-Mart), Frank Julian (Federated Department Stores), Michael Grieve (American Enterprise Institute), Steven Rauschenberger (National Conference of State Legislatures), and Jeff Friedman (KPMG).
8/1. The House Judiciary Committee's Commercial and Administrative Law Subcommittee scheduled a meeting to mark up either HR 1552 or HR 1675 at 2:00 PM on August 2. Both bills are titled the Internet Tax Nondiscrimination Act. Each would extend the current moratorium on multiple and discriminatory Internet taxes, and taxes on Internet access. The Subcommittee has not scheduled for mark up other bills pertaining to authorizing states to tax remote sellers, and business activity taxes.
Wershba v. Apple
8/1. The California Court of Appeal (6th) issued its opinion [PDF] in Wershba v. Apple Computer, an appeal of the settlement of one of the three class action lawsuits brought against Apple Computer in connection with its withdrawal of free technical support in 1997. The Court of Appeal affirmed.
Senate Committee Holds Hearing on Trade
8/1. The Senate Commerce Committee held a hearing on trade issues. See, opening statement of Sen. Ernest Hollings (D-SC), the Chairman of the Committee, opening statement of Sen. John McCain (R-AZ), the ranking Republican, and opening statement of Sen. John Kerry (D-MA). See also, opening statements of witnesses: Donald Evans (Secretary of Commerce), Edward Luttwak (Center for Strategic and International Studies), and William Reinch (National Foreign Trade Council). 
Or of the Press
8/1. Rep. Eliot Engel (D-NY), Rep. Bobby Rush (D-IL), and Rep. Mike Honda (D-CA) introduced HR 2700, a bill that would require the FCC to establish an office on victims of media bias. It was referred to the House Commerce Committee, of which Reps. Engel and Rush are members.
Export Administration Act Consent Agreement
8/1. Sen. Fred Thompson (R-TN), an opponent of S 149, the Export Administration Act of 2001, and Sen. Tom Daschle (D-SD), the Senate Majority Leader, engaged in a discussion on the Senate floor regarding a unanimous consent request to bring up the bill after the August recess.
Sen. Daschle stated that the "Export Administration Act is part of the unanimous consent agreement that we entered into a moment ago. It allows the majority leader to call up the bill on September 4. I say to my colleagues, and especially to my colleague from Tennessee, that this is an agreement he and I discussed prior to entering into the agreement. It acknowledges that we would have at least 2 full days of debate that would accommodate the interest of the Senator from Tennessee in discussing this issue prior to the time I would file a cloture motion. I confirm that for the RECORD, and fully expect that those 2 full days of debate will be immediately following the time we come back." Sen. Thompson agreed to this unanimous consent request. See, Congressional Record, August 1, 2001, at page S8535.
People and Appointments
8/1. The Senate confirmed Rep. Asa Hutchinson (R-AR) to be Director of the Drug Enforcement Administration.
8/1. The Senate confirmed Harvey Pitt to the Chairman of the SEC.
8/1. The Senate Banking Committee approved by voice votes the nominations of Michael Garcia to be Assistant Secretary of Commerce for Export Enforcement, Henrietta Fore to be Director of the Mint, and Linda Conlin to be an Assistant Secretary of Commerce for Trade Development.
8/1. President Bush nominated Paul McNulty to be U.S. Attorney for the Eastern District of Virginia, which includes tech heavy northern Virginia. He is a Deputy Associate Attorney General at the U.S. Department of Justice. Previously he was Chief Counsel and Director of Legislative Operations for House Majority Leader Dick Armey (R-TX). Before that, McNulty held several posts at the House Judiciary Committee, including spokesman and Chief Counsel to the Subcommittee on Crime. And before that, he worked in the Justice Department during the administration of the elder Bush. He has also worked at the law firm of Shaw Pittman. See, WH release.
More News
8/1. The House Education Committee amended and approved HR 1992, the Internet Equity and Education Act of 2001, sponsored by Rep. Johnny Isakson (R-GA). The bill would make it easier to obtain federal financial aid for web based education programs. See, release.
8/1. The Progressive Policy Institute, a Democratic think tank, released a report titled "Adopting P3P for Congressional Web Sites: A How-To Guide." It states that "By adopting P3P policies on their own web sites, Members send a signal to both commercial and government web site operators that P3P is here to stay, and that it is an important part of the debate on Internet privacy." The problem, write authors Shane Ham and Ari Schwartz, is a "chicken or egg" issue: "Web site operators will not go through the effort of adopting P3P if Internet users are not using P3P software. On the other hand, if no web sites are P3P compliant, Internet users will either ignore privacy warnings or disable the P3P function altogether."
8/1. The National Telecommunications and Information Administration's Spectrum Planning Subcommittee released its Federal Long-Range Spectrum Plan.
8/1. The FBI's National Infrastructure Protection Center (NIPC) issued a release at 11:30 AM EDT on August 1 on the status of the Code Red worm. It stated: "Based on preliminary analysis, we expect a level of worm activity comparable to the July 19th Code Red infection, which resulted in infection of over 250,000 systems. It should achieve that level of activity by this afternoon."

Go to News Briefs from July 26-31, 2001.