News from February 26-28, 2002
Senate Committee Holds Hearing on Broadband and Protecting Digital Content
2/28. The Senate Commerce Committee held a hearing titled "Protecting Content in a Digital Age -- Promoting Broadband and the Digital Television Transition" at which it heard different views from the copyright and technology industries regarding piracy of digital content.
Disney's Michael Eisner urged the "Congress to act to facilitate the establishment of open and common standards for technological protection of creative content in digital distribution."
In contrast, Intel's Leslie Vadasz stated that "Any attempt to inject a regulatory process into the design of our products will irreparably damage the high tech industry: it will substantially retard innovation, investment in new technologies, and will reduce the usefulness of our products to consumers." Similarly, Cisco's Andreas Bechtolsheim stated that "The best way to protect content is through technology, not government. Proven content protection technology exists today that does not require new legislation for efficacy. Alternative technologies that would require new legislation to be effective in our opinion are not technically sound because the protection offered by the law can never be as strong as protection offered by the strength of encryption and mathematics."
Sen. Ernest Hollings (D-SC), the Chairman of the Committee, wrote in his opening statement [PDF] that "With the exception of rural America and some underserved areas, there is no broadband availability problem; we have a demand problem. 80% can get it, only 10-12% take it. Most Americans don't want to pay $50 a month for faster access to email. If more content were available online, consumers would come."
"But there is almost no legal, high quality content available on the Internet. Why? Because there is no single, open standard providing technological protection to copyrighted products to give content owners the confidence to place their premium content online. The same is true for digital television, where piracy deters programmers from putting digital content over the airwaves," said Sen. Hollings.
"America has had copyright law on the books since the Constitution. But in an era when products are delivered digitally, the copyright laws mean less and less. Absent strong technological protections layered on top of the copyright laws, it is virtually impossible to enforce the law as it exists."
Hollings concluded that "Senator Stevens and I are planning legislation that would place a deadline on affected industries to come together to solve these problems in private sector talks. If they do, we will empower government enforcement so that all consumer devices comply with the private sector's solution. If they don't, the government's technologists and engineers, in consultation with the private sector will step in."
See, prepared testimony of Michael Eisner (Ch/CEO of Disney), Peter Chernin (P/COO of News Corp.), Leslie Vadasz (EVP of Intel), Andreas Bechtolsheim (Cisco), James Meyer (Thomson Multimedia), Robert Perry (Mitsubishi Digital Electronics America), and Jack Valenti (P/CEO of the Motion Picture Association of America).
FTC Sues Sellers of Non Existent Domain Names
2/28. The Federal Trade Commission (FTC) filed a complaint [PDF] in U.S. District Court (NDIll) against TLD Network Inc. alleging violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), in connection with advertising and selling over the Internet non existent .usa domain names. The District Court issued a Temporary Restraining Order [PDF] against defendants, which also affects all domain name registrars.
The complaint states that "Since approximately October 2001, Defendants have sold domain names ending in the suffix ``.usa.´´ ... Defendants send, or authorize others to send on their behalf, unsolicited commercial email to consumers, including consumers in the United States, advertising the availability of their domain names. ... Defendants advertise their domain names on Internet Web sites ... Defendants sell their domain names for $59 each. ... Many consumers, including consumers in the United States, have purchased such domain names."
The complaint states that in reality, "In order for a domain name to be readily accessible over the Internet, whether by its address or through indexing by a search engine, the name must be recognized and registered under protocols developed by the Internet Corporation for Assigned names and Numbers (ICANN). ICANN currently does not recognize any of the domain names being sold by Defendants, and has no plans to introduce domain names with the suffixes sold by Defendants."
The TRO enjoins defendants from making false or misleading statements regarding domain names. It also requires that "any party hosting any Web pages or Web sites for Defendants ... Immediately take whatever steps may be necessary to ensure that Web pages ... cannot be accessed by the public ..."
The TRO also requires "any other domain name registrar" to "Immediately suspend the registration and prevent the transfer of" domain names used by defendants to advertise their" non existent domain.
The TRO also freezes defendants' assets, enjoins the destruction of records, and expedites discovery. It set a hearing for March 11.
The complaint, motion for TRO, and memorandum in support [PDF] were filed on February 28. The FTC held a press conference on March 11 in Washington DC to announce the action. See also, FTC release.
Howard Beales, III, Director of the FTC's Bureau of Consumer Protection, stated: "They sent deceptive spam, and they sold worthless web addresses from their Web sites. By closing down this operation we're sending a strong signal: We will not tolerate deceptive spam."
House Committee Holds Hearing on Export Controls
2/28. The House Armed Services Committee held a hearing on Export Administration Act of 2001.
The Senate version of the bill, S 149, is sponsored by Sen. Mike Enzi (R-WY). It 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 Bush Administration supports this version of the bill. The Senate passed it by a vote of 85 to 14, five days before the terrorist attacks of September 11, over the opposition of a small group of Senators who assert that it would harm national security.
The House International Relations Committee passed a much different version just before the August 2001 recess, HR 2581, also titled the Export Administration Act of 2001.
Administration officials testified in favor of the Senate version of the bill. The Committee heard testimony from J.D. Crouch (Assistant Secretary of Defense for International Security Policy), James Jochum (Asst. Secretary of Commerce for Export Administration), and Vann Van Diepen (Acting Deputy Assistant Secretary of State).
Rep. Bob Stump (R-AZ), Chairman of the Committee, said in his opening statement that "reform is always in the eye of the beholder and the concern over this bill is that it will open the floodgates and allow some of our most sensitive technologies to flow into labs and arsenals of nations who have consistently demonstrated hostility to United States' interests and could one day become military adversaries".
See also, prepared testimony of Joseph Christoff (GAO), Edmund Rice (Coalition for Employment Through Exports), Gary Milhollin (Wisconsin Project on Nuclear Arms Control).
Rep. Goodlatte Addresses Trip to Russia and EU
2/28. Rep. Bob Goodlatte (R-VA) discussed the Congressional delegation trip to Russia and Europe last month to promote the Internet, intellectual property rights, and e-commerce. See, transcript of media roundtable.
The delegation met with members of the Russian Duma, Czech Parliament, German Bundestag, and European Parliament. The delegation, which traveled over the Presidents' Day recess, was made up of Reps. Goodlatte, Rick Boucher (D-VA), Lamar Smith (R-TX), John LaFalce (D-NY), Charles Taylor (R-NC), and James Walsh (R-NY).
Rep. Goodlatte stated that the delegation urged Russia not to mandate encryption restraints, including mandatory key escrow or a key recovery system. The group also urged Russia to enforce intellectual property rights. The Congressmen discussed broadband deployment, privacy, safe harbor provisions, unsolicited e-mail, and other issues with the Europeans.
Encryption in Russia. Rep. Goodlatte stated that "One of the issues we encountered is something that we faced here about four or five years ago, and that is the government's effort to control communications on the Internet, to have a back door key into people's computer programs and their communications." He said that "Even after September 11, with the PATRIOT Act, the administration did not put forward a proposal for key escrow or key recovery. That may in part be do to the fact that Attorney General Ashcroft was the leading proponent of the legislation in the Senate that I was promoting in the House, which garnered a tremendous amount of support here and wound up resulting in the administration doing an almost 180 degree reversal of their position on their issue of government control of encryption. They basically backed away from it and allowed U.S. companies to get into the international marketplace, sell their strongly encrypted products in other countries around the world, because other countries' products were being sold in the United States."
"Now we show up in Moscow and find companies like Oracle and Microsoft confronting exactly the same problem there -- a government intending to move forward on a key escrow or key recovery type of system," said Rep. Goodlatte. "And, so we hope we made some progress in suggesting to them that this type of system would not work, that it would have an effect of hindering people's ability to use the Internet securely, willingness to use the Internet, willingness of foreign companies to do business in Russia, and that would hinder the overall growth of the Internet in Russia, which is starting to grow."
IPR in Russia. Rep. Goodlatte said that the delegation also talked to Russian officials about piracy of intellectual property. He stated that pirate copies Microsoft's Windows XP sells on the streets of Moscow for $2.80.
"In Russia, it seems to be a problem with corruption to which the government seems to turn its head. Sometimes it doesn't take steps. I know that Microsoft, for example, had an office in Russia. It closed the office about a year ago because of their frustration in terms of attempting to combat this."
Goodlatte stated that "we raised these issues with them, from the standpoint not only of it being a concern of the U.S. companies, but really, another hindrance to the ability of Russia to grow their economy in the direction that I presume they want to grow it. They certainly expressed a lot of interest in information technology and growing the Internet and so on. But, the point that we made to them was that, unless you protect intellectual property, people will not create intellectual property in Russia."
He added that "they also have some companies in their infancy creating computer software, programming, and other types of things. But they don't have a tradition of protecting intellectual property. These companies will never get off the ground because their products will be ripped off by their own citizenry. And, I think that concept was well received."
EU and Privacy. Rep. Goodlatte stated that "We basically agreed to continue to work on the safe harbor provisions, because we are nowhere near seeing the United States go for opt in, and I don't see them coming around and changing what they have already put in place." He also pointed out that "Ironically, U.S. companies that operate on the opt out basis have better privacy disclosure rules -- studies have consistently shown this -- than the European companies that are supposedly under these very strict directives."
Goodlatte concluded: "Basically, in one sentence, we don't want to take the information out of the information age. If you can't understand who your customer is, and then provide them with information that is useful to them, in ways that the Internet and computers are far more capable of doing than direct mail or television or telephone calls, or all of the other intrusive ways that people have calling you up and offering you information."
3G Wireless. Rep. Goodlatte also addressed Third Generation wireless services, which are intended to bring broadband Internet access to portable devices. He said that the Europeans "actually got a jump on us by rolling out 3G technology sooner than we did. But, because the government took a leading role in picking the technology that was going to work, they are now finding that it is not the best technology. And the U.S., which is behind, because we don't have access to as much spectrum, seems to be developing better technology."
Goodlatte added that "the problem that we have with roll out on that is government. Government, particularly, in this case, the Defense Department and other governmental sectors, they control big chunks of wireless spectrum. ... The Europeans had more spectrum available because they had less defense and security uses and needs for it. But, because government is a little bit too much dictating how they use it, they got a lead, but may be frittering the advantage away. And, we may catch up with them, if we can free up that spectrum, to apply this better technology."
FCC Sets Comment Deadlines in Broadband Framework NPRM
2/28. The Federal Communications Commission (FCC) published a notice in the Federal Register regarding its notice of proposed rule making (NPRM) regarding the appropriate regulatory framework for broadband access to the Internet over wireline facilities. The FCC announced this NPRM [58 pages in PDF] at its February 14 meeting. This Federal Register notice summarizes the NPRM and sets deadlines. Comments are due April 15, 2002. Reply comments are due May 14, 2002.
This NPRM states that "we examine the appropriate classification for wireline broadband Internet access service. As discussed more fully below, we tentatively conclude that, as a matter of statutory interpretation, the provision of wireline broadband Internet access service is an information service. In addition, we tentatively conclude that when an entity provides wireline broadband Internet access service over its own transmission facilities, this service, too, is an information service under the Act. In addition, we tentatively conclude that the transmission component of retail wireline broadband Internet access service provided over an entity’s own facilities is ``telecommunications´´ and not a ``telecommunications service.´´ We seek comment on these tentative conclusions and ask additional questions with regard to the proper classification of wireline broadband Internet access service."
See, Federal Register, February 28, 2002, Vol. 67, No 40, at pages 9232 - 9242.
RIAA Defends CD Copy Protection
2/28. Hillary Rosen, P/CEO of the Recording Industry Association of America (RIAA), wrote a letter [PDF] to Rep. Rick Boucher (D-VA) regarding CD copy protection. She wrote that "record companies have both a legal right and a responsibility to utilize technology to protect their companies' revenues and jobs, and their artist's income and careers."
Rep. Boucher wrote a letter to the RIAA and the International Federation of the Phonographic Industry (IFPI)
on January 4, 2002, in which he asked, among other things, "What methods have been used or are planned for use by your member companies to alter CD content or ancillary encoding so as to constrain functions of personal computers or other devices?" He also questioned whether CD copy protection violates the Audio Home Recording Act (AHRA). See, 17 U.S.C. §§ 1001, et seq.
CD Copy Protection Technology. Rosen provide little information about CD copy protection methods. Rather, she defended it use. She wrote that "the ease with which CDs can be copied has resulted in mass distribution for which the creators get no reward. The evidence of the problem is everywhere. Internet piracy and file swapping services continue to proliferate."
She added that "If technology can be used to pirate copyrighted content, shouldn't technology likewise be used to protect content? Isn't it incumbent on copyright owners to do whatever they can to protect the economic value of their works and the jobs and careers of the hundreds of thousands of individuals who create, produce, market and distribute music?"
She wrote little about copy protection technologies. She stated that "There are a multitude of technologies available that offer some form of copy protection for CDs. Each of them has different characteristics and performs differently."
However, she continued that "Copy protection technologies are constantly evolving ..." She also wrote that "Decisions on CD copy protection are being made by record companies individually, on a company by company basis. ... RIAA is not privy to their individual plans." Moreover, "The particular methods by which each technology operates are proprietary to its owner, and are confidential".
AHRA. Rep. Boucher wrote in his January 4 letter: "I am particularly concerned that some of these technologies may prevent or inhibit consumer home recording using recorders and media covered by the Audio Home Recording Act of 1992 (AHRA). As you know from your personal involvement in its drafting, the AHRA clearly requires content owners to code their material appropriately to implement a basic compromise: in return for the receipt of royalties on compliant recorders and media, copyright owners may not preclude consumers from making a first generation, digital to digital copy of an album on a compliant device using royalty-paid media. Under the AHRA, any deliberate change to a CD by a content owner that makes one generation of digital recording from the CD on covered devices no longer possible would appear to violate the content owner’s obligations under the statute."
Rosen rejected this argument in her letter of February 28. She wrote: "Your letter suggests that the use of CD copy protection technology might somehow violate the terms of the Audio Home Recording Act (``AHRA´´). In fact, however, this is clearly not the case. The devices primarily used to rip CDs are general purpose computer devices, which are explicitly excluded from the coverage of the AHRA. Moreover, the AHRA was a legislative compromise reached years before the development of peer to peer systems and the resultant massive infringements they facilitate. The AHRA primarily imposes obligations on manufacturers of ``digital audio recording devices,´´ ..."
Rosen added that "The only requirement imposed on distributors of recorded music is that they encode accurately the information used by SCMS" (Serial Copy Management System). "Nothing in the AHRA affirmatively requires that a CD be copiable, let alone recordable in any particular device. Certainly, there is not policy justification for ... some kind of broad affirmative right to copy CDs," wrote Rosen.
Bills Introduced
2/28. Rep. Saxby Chambliss (R-GA), Rep. Jane Harman (D-CA), and others introduced HR 3825 [PDF], the Homeland Security Information Sharing Act, a bill to provide for the sharing of homeland security information by federal intelligence and law enforcement agencies with state and local entities. Rep. Chambliss and Rep. Harman are the Chairman and ranking Democrat on the House Intelligence Subcommittee on Terrorism and Homeland Security. The bill was referred to the House Intelligence Committee, the House Judiciary Committee, and the House Government Reform Committee. See also, Harman release.
2/28. Rep. Bart Stupak (D-MI) and Rep. John LaFalce (D-NY) introduced HR 3829, a bill to repeal the provisions of the Private Securities Litigation Reform Act (PSLRA) and the Securities Litigation Uniform Standards Act (SLUSA) that limit private securities actions. The bill was referred to the House Financial Services Committee and the House Judiciary Committee.
2/28. Sen. Patrick Leahy (D-VT) and Sen. Charles Grassley (R-IA) introduced S 1974, the FBI Reform Act of 2002. It was referred to the Senate Judiciary Committee. See, Leahy and Grassley's summary.
People and Appointments
2/28. President Bush announced his intent to nominate Christopher Conner and John Jones to be U.S. District Court Judges for the Middle District of Pennsylvania. See, WH release.
2/28. Ronnie Chan will not seek re-election to the Board of Directors of Motorola at the May 6, 2002 annual shareholders meeting. See, Motorola release.
2/28. Kevin Donovan was named Assistant Director of the Federal Bureau of Investigation (FBI) in charge of the New York Office. He will replace Barry Mawn, who will retire in March, 2002. See, FBI release.
2/28. The U.S. Telecom Association (USTA), a group that represents the baby Bells, gave a "Lifetime Achievement Award" to Rep. John Dingell (D-MI) at a conference on February 28. On February 27, the House passed the Tauzin Dingell bill, which would provide regulatory relief for the baby Bells. See, USTA release.
2/28. Edward Reilly joined the New York office of the law firm of Morgan Lewis as a partner in its Business and Finance Practice. He will focus on advising private equity and venture capital fund investors and emerging growth companies. He was previously a partner at the law firm Brobeck Phleger & Harrison in New York. Before that, he was a partner at LeBoeuf Lamb Greene & MacRae. See, ML release.
More News
2/28. The Office of the U.S. Trade Representative (USTR) published a notice in the Federal Register stating that it will hold a public hearing concerning negotiation of a U.S. Singapore Free Trade Agreement on Monday, April 1, 2002. The USTR stated that the agreement is "expected to include provisions on trade in services, investment, trade related aspects of intellectual property rights, competition, government procurement, electronic commerce, trade related environmental and labor matters, and other issues." Parties wishing to testify orally at the hearings must provide written notification of their intention by 12:00 NOON, Monday, March 18, 2002. See, Federal Register, February 28, 2002, Vol. 67, No. 40, at pages 9349 - 9351.
2/28. The U.S. Court of Appeals (7thCir) issued its opinion US v. Kah Choon Chay, an appeal from the sentence in a case involving criminal copyright infringement by auctioning counterfeit computer games on eBay and other auction sites. Chay plead guilty in U.S. District Court (WDWisc) to one count of trafficking in counterfeit documents and packaging for computer programs in interstate commerce in violation of 18 U.S.C. § 2318(a). The District Court sentenced him to eight months of incarceration, three years of supervised release, and $49,941.02 in restitution to the owners of the copyrighted programs that he had pirated. The Appeals Court affirmed.
2/28. The U.S. Chamber of Commerce and the Privacy Leadership Initiative (PLI) released a document [57 pages in PDF] titled "Privacy Made Simple: A Do It Yourself Guide to Privacy Management". See also, Chamber release.
2/28. The Senate Judiciary Committee postponed its business meeting, which had been scheduled for Thursday morning, February 28.
2/28. The Commerce Department's National Telecommunications and Information Administration (NTIA) published a notice that it is seeking to fill the position of Associate Administrator for Spectrum Management. This is a Senior Executive Service position that pays $125,972 - $138,200. Applications are due by March 27. This position is the principal official of the executive branch of government responsible for the management of the federal government's use of the radio frequency spectrum.
House Passes Tauzin Dingell Bill
2/27. The House passed HR 1542, the Internet Freedom and Broadband Deployment Act, also known as the Tauzin Dingell bill, by a vote of 273 to 157. See, Roll Call No. 45.
The Tauzin Dingell bill provides regulatory relief to the Baby Bell phone companies. It provides that "Except to the extent that high speed data service, Internet backbone service, and Internet access service are expressly referred to in this Act, neither the Commission, nor any State, shall have authority to regulate the rates, charges, terms, or conditions for, or entry into the provision of, any high speed data service, Internet backbone service, or Internet access service, or to regulate any network element to the extent it is used in the provision of any such service; nor shall the Commission impose or require the collection of any fees, taxes, charges, or tariffs upon such service."
It would also amend Section 251 to provide that "neither the Commission nor any State shall require an incumbent local exchange carrier to provide unbundled access to any network element for the provision of any high speed data service."
The House approved an amendment in the nature of a substitute [PDF] offered by Rep. Billy Tauzin (R-LA) and Rep. James Sensenbrenner (R-WI), as amended by an amendment [PDF] offered by Rep. Fred Upton (R-MI) and Rep. Gene Green (D-TX) that increases the maximum penalties that may be imposed on phone companies for violations of telecommunications law, and an amendment [PDF] offered by Rep. Steve Buyer (R-IN) and Rep. Adolphus Towns (D-NY) that provides certain guarantees to competitive local exchange carriers.
The House rejected a broader amendment [PDF] offered by Rep. Chris Cannon (R-UT) and Rep. John Conyers (D-MI) by a vote of 173 to 256. See, Roll Call No. 44.
After two years' of hearings, committee mark ups, speeches, and media advertising, the final passage was relatively brief. The House Rules Committee had limited the matters which the House could consider to one amendment in the nature of a substitute, and three further amendments. The Rules Committee also strictly limited time for the debate. Supporters argued that the bill would spur broadband deployment. Opponents argued that it would not. Supporters argued that it would increase competition. Opponents argued that it would not. Finally, much of the argument in the end focused on objections to the Rules Committee's restrictions, and last minute procedural maneuvers to get around them.
Sen. Hollings Criticizes Tauzin Dingell Bill
2/27. While the House was debating the Tauzin Dingell bill, Sen. Ernest Hollings (D-SC) held a press conference to criticize the bill. He called it "blasphemy, a total fraud." He said that "it has nothing to do with broadband; it has nothing to competition." Rather, he said it is an attempt by the Baby Bells to extend their monopolies to long distance.
He also commented on the lobbying and political contributions by the Bells. "It is a cash and carry government," said Sen. Hollings.
Sen. Hollings stated that one way to promote broadband would be to pass legislation giving tax credits for deployment of broadband facilities in rural areas.
"No one can point to a law that prevents broadband," added Hollings. He said that most people could purchase broadband service, if they wanted it. Rather, "it is a lack of demand" that is limiting broadband use. He said that people do not want to pay $50 per month just to get their e-mail more quickly.
Sen. Hollings suggested that dealing with demand issues would promote broadband use. He said that digital rights management must be addressed, so that content providers will make more material available online. The Senate Commerce Committee, which Sen. Hollings chairs, is holding a hearing on this topic on Thursday, February 28, at 9:30 AM.
Sen. Hollings also stated that the Congress must pass a privacy bill. He added that "we are getting close, very close. I think we can get one out this year." If the Senate were to pass a privacy bill, it would then have to pass the House Commerce Committee, which is chaired by Rep. Billy Tauzin (R-LA) -- the blasphemer.
FRB Chair Greenspan Testifies on Economy
2/27. The House Financial Services Committee held a hearing to receive the testimony of Alan Greenspan, Chairman of the Federal Reserve Board, on monetary policy. He stated in his prepared testimony that "increasing signs have emerged that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm. ... One key consideration in the assessment that the economy is close to a turning point is the behavior of inventories."
He added that "Inventories, especially among producers and purchasers of high-tech products, did run to excess over the past year, as sales forecasts went badly astray; alas, technology has not allowed us to see into the future any more clearly than we could previously. But technology did facilitate the quick recognition of the weakening in sales and backup of inventories. This enabled producers to respond forcefully, as evidenced by output adjustments that have resulted in the extraordinary rate of inventory liquidation we experienced late last year."
FRB Vice Chair Addresses High Tech and Productivity
2/27. Roger Ferguson, Vice Chairman of the Federal Reserve Board, gave a speech in Canton, Ohio, titled "A Review of Economic Developments in 2001 and the Economic Outlook". He stated that "signs of economic recovery are increasing". He also addressed the affect of information technology on productivity and economic growth.
He stated that "Perhaps the most notable feature of our economy in recent years, however, has been the acceleration in productivity." He continued that "Productivity growth continued over the four quarters of 2001. That it increased is impressive, given the historical tendency of productivity growth to turn negative when the economy enters recession. This performance provides additional evidence that the improvements in productivity growth that we have witnessed since the mid 1990s have been largely structural and will persist for a time."
"But the fundamental factor leading me to be cautiously optimistic that much of the improvement is likely to be sustained is my outlook for the state of technological advancement in the United States," said Ferguson. "Booming investment in the 1990s was due importantly to steep declines in prices of high tech equipment, which largely reflected rapid technical progress. About 1/2 percentage point of the increase in productivity growth in the 1995-99 period can be attributed to this so called capital deepening. Although the extraordinary pace of investment spending in those boom years was not sustainable, I believe that technological progress will continue to drive down the cost of information technology in the coming years, inducing still robust growth of the capital stock. Moreover, businesses have reaffirmed their intentions to improve productivity by substituting cost saving high tech capital for labor."
Senate Commerce Committee Holds Hearing on Digital Divide
2/27. The Senate Commerce Committee's Subcommittee on Science, Technology and Space, held a hearing on S 414, the NTIA Digital Network Technology Program Act, and a bill to remedy various "digital divides". This bill would authorize $250 Million per year for five years for a grant program for digital network technologies.
S 414 is sponsored by Sen. Max Cleland (D-GA), Sen. Ernest Hollings (D-SC), and ten other Senators. It would establish a grant program for educational institutions to be administered by the Department of Commerce's National Telecommunications and Information Administration (NTIA).
The entities that could receive grants under this bill include historically black colleges and universities, Hispanic serving institutions, tribally controlled colleges and universities, Alaska Native serving institutions, Native Hawaiian serving institutions, and other institutions that have "enrolled a substantial number of minority, low income students".
Sen. Ron Wyden (D-OR), the Chairman of the Subcommittee, stated that "the debate about the digital divide is whether this country is going to tolerate an information aristocracy or not." He added that this is not a partisan issue.
Sen. George Allen (R-VA) concurred that this should not be a partisan issue. He also used the hearing to promote S 488, the Education Opportunity Tax Credit Act. This bill would provide a $1000 per child tax credit for families purchasing "computer technology or equipment". Sen. Allen is the sponsor.
The Subcommittee heard from two panels of witnesses, all of whom represent groups that would receive grants provided by this bill. All expressed their support for the bill. The panel of witnesses did not include a representative of the NTIA. Sen. Byron Dorgan (D-ND) also participated in the hearing.
Senate Judiciary Committee Holds Hearing on Sovereign Immunity and IPR
2/27. The Senate Judiciary Committee held a hearing on sovereign immunity and the protection of intellectual property. Sen. Patrick Leahy (D-VT), the Chairman of the Committee, introduced S 1611, the Intellectual Property Protection Restoration Act of 2001, on November 1, 2001.
The bill states that one of its purposes is to "help eliminate the unfair commercial advantage that States and their instrumentalities now hold in the Federal intellectual property system because of their ability to obtain protection under the United States patent, copyright, and trademark laws while remaining exempt from liability for infringing the rights of others".
Sen. Leahy also sought unsuccessfully to pass similar legislation in the last Congress, while Sen. Orrin Hatch (R-UT) was Chairman of the Senate Judiciary Committee. In addition, Rep. Howard Coble (R-NC) and Rep. Howard Berman (D-CA) introduced HR 3204, the companion bill to S 1611 in the House. Reps. Coble and Berman are the Chairman and ranking Democrat on the House Judiciary Committee's Courts, Internet and Intellectual Property Subcommittee.
Waiver of Sovereign Immunity. The purpose of these bills is to prevent states from infringing patents, copyrights and trademarks. The bills would, among other things, prevent states from recovering damages for infringement of state owned intellectual property, unless they have first waive their 11th Amendment sovereign immunity from suits against them for their infringement of the intellectual property of others.
Abrogation under the 5th or 14th Amendments. The two bills would also provide that states that violate intellectual property rights "in a manner that deprives any person of property in violation of the fourteenth amendment of the United States Constitution, shall be liable to the party injured in a civil action in Federal court for compensation for the harm caused by such violation." The bills contain similar language for violations which constitute takings under the 5th Amendment.
Ex Parte Young Doctrine. Finally, these bills would codify the Ex parte Young doctrine, which permits injunctions against state officials. See, 209 U.S. 123 (1908).
Supreme Court Opinions. The problem addressed by these bills arose in 1996 when the Supreme Court of the U.S. ruled in Seminole Tribe of Florida v. Florida that the Congress lacks authority under Article I of the Constitution to abrogate the States' 11th Amendment immunity from suit in federal courts. See also, the 1999 opinions of the Supreme Court in Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank (invalidating the Patent and Plant Variety Protection Remedy Clarification Act) and College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board (invalidating the Trademark Remedy Clarification Act).
Eleventh Amendment. "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."
James Rogan, Director of the U.S. Patent and Trademark Office (USPTO) stated in his prepared testimony at the February 27 hearing that "Intellectual property owners view the current situation as inequitable. In their view, State institutions profit from federally protected intellectual property and are permitted to bring suit to protect their own intellectual property, but are shielded from monetary damages as defendants. This inequity skews our system of intellectual property protection, because the penalties in place to discourage infringement do not apply to State entities. The Administration shares some of these concerns."
Rogan added that "The Commerce Department supports the objective of ensuring that owners of intellectual property rights have a proper remedy when a State infringes upon those intellectual property rights. As such, we believe that a legislative answer to the questions raised by the Florida Prepaid cases is appropriate."
Rogan also pointed out that "Although a State would be required to waive its sovereign immunity in infringement suits involving all types of federally protected intellectual property in order to obtain patent, trademark, or copyright damages, it is not clear under the current draft bill that a State owner of a semiconductor chip design or plant variety would be required to waive immunity in order to obtain damages for infringement of this intellectual property." He suggesting adding appropriate language to address this matter.
Marybeth Peters, the Register of Copyrights, stated in her prepared testimony that S 1611 is a "carefully balanced bill. It provides copyright owners with effective tools to restore their ability to obtain appropriate remedies for infringement by States while remaining, I believe, within Congress' constitutional authority. The Copyright Office supports enactment of S 1611."
Michael Kirk, Executive Director of the American Intellectual Property Law Association, expressed support for S 1611 in his opening statement. He also stated that the recent Supreme Court decisions render the U.S. vulnerable to World Trade Organization (WTO) determinations that it is in violation of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).
William Thro, an attorney for the state of Virginia, opposed S 1611 in his prepared testimony. He said that it is bad policy, and unconstitutional. He asserted that "By forcing the States to choose between waiving sovereign immunity and being able to enforce their own intellectual property rights, it violates the doctrine of unconstitutional conditions." He also asserted that "States are not engaged in a widespread practice of abusing intellectual property rights".
Keith Shraad, of the National Information Consortium, testified regarding an egregious violation of intellectual property rights in software by the state of Georgia, and its abuse of sovereign immunity. See, prepared testimony. See also, prepared testimony of Paul Bender, a professor at the Arizona State University College of Law, in support of S 1611.
Ways & Means Committee Holds Hearing on WTO Tax Rulings
2/27. The House Ways and Means Committee held a hearing on the World Trade Organization's (WTO) extraterritorial income decision.
The WTO has ruled that the U.S. Extraterritorial Income Exclusion Act (ETI), and its predecessor, the Foreign Sales Corporation Act (FSC), constitute illegal export subsidies. These tax regimes greatly benefit U.S. companies that export their products, including high tech exporters such as Microsoft, Cisco and Motorola. The U.S. unsuccessfully argued to the WTO that the U.S. has a global tax system, while European nations have territorial tax systems, that this puts U.S. exporters at a competitive advantage, and that tax regimes such as ETI and FSC that exempt certain foreign source income from taxation merely level the playing field.
Rep. Bill Thomas (R-CA), the Chairman of the Committee, stated in his opening statement, that "Four times the WTO has sent the United States this same clear message -- our tax system as it is currently constituted violates international trade rules.  In the opinion of the Chairman of this committee, the time has come for us to listen. Our corporate tax structure is in need of major restructuring, not another attempt at a short term fix. More fundamental reform is required."
Rep. Jim Ramstad (D-MN) stated in his opening statement that "we must begin to examine whether the foundations of our worldwide tax system are sustainable if American businesses are to remain competitive in our global economy. We already have too many examples of former U.S. companies that now are headquartered overseas because of our burdensome international tax system. The WTO's most recent decision and the resulting sanctions facing our businesses is another wake-up call for reform."
Rep. Phil Crane (R-IL), Chairman of the Trade Subcommittee, once again stated that the solution is to abolish the corporate income tax altogether.
See, prepared testimony of witnesses: Peter Davidson (General Counsel, United States Trade Representative), Barbara Angus (Department of the Treasury), Gary Hufbauer (Institute of International Economics), Peter Merrill (Price Waterhouse), and Stephen Shay (Ropes & Gray).
FCC Reports on Local Phone Competition
2/27. The Federal Communications Commission (FCC) released a report [21 pages in PDF] titled "Local Telephone Competition: Status as of June 30, 2001". It states that "Competitive local exchange carriers (CLECs) reported 17.3 million (or 9.0%) of the approximately 192 million nationwide switched access lines in service at the end of June 2001, compared to 14.9 million (or 7.7% of nationwide lines) at the end of the preceding year. This represents a 16% growth in CLEC market size during the first six months of 2001." It also states that "The 72 providers of mobile wireless telephone services that reported data as of June 30, 2001 served about 114 million subscribers." See also, FCC release [2 pages in PDF].
EPIC Releases Report on Electronic Surveillance and the DOJ Budget
2/27. The Electronic Privacy Information Center (EPIC) released a report [PDF] titled "Paying for Big Brother: A Review of the Proposed FY2003 Budget for the Department of Justice." It states that "Included in the DOJ Budget are many new surveillance and electronic security programs."
The report warns that "the Budget documents released thus far lack adequate transparency and level of detail concerning the Department’s programs that would allow a fair public evaluation of their necessity, efficacy, and possible risks to civil liberties and Constitutional values."
For example, the report states that "The Department Justice plans a large scale Identification Systems Integration (ISI) that would greatly increase the sharing and compilation of personal information held by federal agencies. The FY2003 Budget requests a total increase in funding of $23.5 million. There is no information in the budget materials provided to the public that indicate privacy or security issues have been considered in the development of ISI."
Sen. Biden Addresses Digital Divides
2/27. Sen. Joe Biden (D-DE) spoke in the Senate regarding digital divides. He stated that "the widening gap between those Americans who use or have access to telecommunications technologies, like computers and the Internet, and those who do not. Surprisingly, there are those naysayers who suggest that the ``digital divide´´ does not exist, that it is a myth or fabrication of consumer and civil rights advocates. ... No matter the reason for these naysayers' doubt, the unequivocal answer to their question ``is there really a digital divide´´ is a resounding ``YES.´´ "
He also stated that "I am shocked by the Bush administration's apparent efforts to dismantle many programs designed to eliminate the inequality of access to technology. These programs, including the popular E-Rate Program, have a demonstrated record of success connecting roughly 1 million public school classrooms and 13,000 community libraries to modern telecommunications networks." See, Cong. Rec., Feb. 27, 2002, at page S1244.
FTC Releases Documents Pertaining to FTC-ATR Agreement on Clearance Procedures
2/27. The Federal Trade Commission (FTC) published in its web site a collection of documents that pertain to the controversial, and as yet, unimplemented, Memorandum of Agreement [2.3 MB PDF file] negotiated by Timothy Muris, FTC Chairman, and Charles James, Assistant Attorney General in the Department of Justice in charge of the Antitrust Division (ATR). See, FTC release.
See, ABA Antitrust Section Letter [PDF 128KB], Letter from the Business Roundtable, the National Association of Manufacturers and the U.S. Chamber of Commerce [PDF 128KB], Number of Enforcement Actions and Substantial Investigations by DOJ and FTC, by Industry FY1997 - Present [HTML], Clearance Delays [HTML], Initial Recommendations [HTML], and Letters from former antitrust enforcement officials [PDF 774KB].
People and Appointments
2/27. The Securities and Exchange Commission (SEC) named Carol Stacey Chief Accountant of the SEC's Division of Corporation Finance. See, SEC release.
More News
2/27. Rep. Greg Meeks (D-NY) introduced HR 3809, the Economic Development and Technology Workforce Enhancement Act of 2002. This bill would amend the Internal Revenue Code with respect to small issue bonds. It was referred to the House Ways and Means Committee.
2/27. David Marchick joined the law firm of Covington & Burling as a Special Counsel in the firm's Washington DC office. He will focus on international trade and transportation issues. He previously worked at Bid4Assets. Before that, he worked in several positions in the Clinton administration. He was Deputy Assistant Secretary for Trade Policy at the State Department, and Principal Deputy Assistant Secretary of Commerce for Trade Development. He also held international trade policy positions at the White House and the Office of the U.S. Trade Representative (USTR). See, CB release.
House Crime Subcommittee Approves Cyber Security Bill
2/26. The House Judiciary Committee's Subcommittee on Crime amended and approved HR 3482, the "Cyber Security Enhancement Act of 2001", by a unanimous voice vote.
Rep. Lamar Smith (R-TX), the sponsor of the bill, and Chairman of the Subcommittee, offered an amendment in the nature of a substitute. (This is a revised version of his amendment in the nature of a substitute released on February 14.) Rep. Sheila Lee (D-TX) offered an amendment to Rep. Smith's amendment in the nature of a substitute. It pertains to sentencing guidelines. It was adopted by a unanimous voice vote. Then, Rep. Smith's amendment, as amended, was adopted.
The bill contains provisions relating to sentencing guidelines for computer hacking crimes, authority of Internet service providers (ISPs) and others to voluntarily disclosure the content of information to law enforcement and other government entities, appropriations for the National Infrastructure Protection Center (NIPC), the Creation of an Office of Science and Technology at the Department of Justice (DOJ), and other topics. The bill further amends several sections of the criminal code that were just recently amended by the USA PATRIOT Act, which is also known as the anti terrorism bill.
Rep. Smith stated at the hearing that "America must protect our national security, critical infrastructure, and economy from cyber attacks. Penalties and law enforcement capabilities must be enhanced to prevent and deter such criminal behavior. Until we secure our cyber infrastructure, a few keystrokes and an Internet connection is all one needs to disable the economy or endanger lives. A mouse can be just as dangerous as a bullet or a bomb."
The bill is supported by the DOJ and industry groups, such as the Business Software Alliance (BSA) and Information Technology Association of America (ITAA). The Center for Democracy and Technology (CDT) has taken the lead in raising concerns about the bill, particularly its Section 102.
The two Democrats present for the mark up, Rep. Bobby Scott (D-VA) and Rep. Sheila Lee (D-TX), expressed their support for the bill, but also voiced concerns which they hope to have addressed before the bill is marked up by the full committee. Both addressed the "good faith" versus "reasonably believes" standard in Section 102 of the bill. That is the bill, as adopted, would permit an ISP (or others) to voluntarily disclose to government entities the contents of communications if it "in good faith, believes that an emergency involving danger of death or serious physical injury to any person requires disclosure of the information without delay". This expands the voluntary disclosure provision.
Rep. Scott also discussed, but did not offer, three different amendments. He stated that he would like to work with other members to address the matters contained in the amendments prior to the full committee mark up. Two of these draft amendments pertain to voluntary disclosure. A third would amend 18 U.S.C. § 2515 regarding the prohibition of the use as evidence of intercepted communications.
Rep. Bob Goodlatte (R-VA) did not offer as an amendment a bill which he is sponsoring, HR 3716, the Online Criminal Liability Standardization Act of 2002. It provides that "no interactive computer service provider, or corporate officer of such provider, shall be liable for an offense against the United States arising from such provider’s transmitting, storing, distributing, or otherwise making available, in the ordinary course of its business activities as an interactive computer service provider, material provided by another person." The bill further provides that "The liability limitation created by this section does not apply if the defendant intended that the service be used in the commission of the offense." However, afterwards he stated that he is still working towards having a version of his bill included when the full committee marks up HR 3482.
The Crime Subcommittee held a hearing on this bill on February 12. It met to mark up the bill on February 14, but lacked a quorum do to the beginning of the Presidents' Day recess. The full Judiciary Committee may mark up the bill within several weeks.
Summary of the Cyber Security Bill As Adopted by the Crime Subcommittee
2/26. The following is a cursory summary of the HR 3482, as adopted by the House Crime Subcommittee on February 26. See, amendment in the nature of a substitute, as amended by the Lee amendment.
Section 101 of the bill would require the U.S. Sentencing Commission to amend the federal sentencing guidelines with respect to violations of 18 U.S.C. § 1030, which pertains to crimes involving intentionally accessing a computer without authorization, or in excess of authorized access. Rep. Lee offered an amendment to Rep. Smith's amendment in the nature of a substitute, which replaces the entirety of Section 101. It was adopted by a unanimous voice vote.
Section 102 of the bill, which is the most controversial item, would amend 18 U.S.C. § 2702(b), regarding voluntary disclosure of the contents of communications. Currently, the statute provides that "A person or entity may divulge the contents of a communication ... (6) to a law enforcement agency ... (C) if the provider reasonably believes that an emergency involving immediate danger of death or serious physical injury to any person requires disclosure of the information without delay." The bill would allow the disclosure "to a governmental entity, if the provider, in good faith, believes that an emergency involving danger of death or serious physical injury to any person requires disclosure of the information without delay."
Hence, the bill would lower the standard that ISPs and others must meet before they voluntarily release information -- from "reasonably believes" to "good faith". It also removes the immediacy requirement. It also expands the set of entities to which information can be released -- from "law enforcement agency" to "governmental entity".
Section 103 provides, in full, that "Section 2520(d)(3) of title 18, United States Code, is amended by inserting ‘‘or 2511(2)(i)’’ after ‘‘2511(3)’’." This amends the computer tresspasser provision of the recently enacted USA PATRIOT Act to allow providers to rely on the good faith defense.
Section 104 of the bill would authorize the appropriation of $125,000,000 for the FBI's National Infrastructure Protection Center (NIPC) for fiscal year 2003. This is up from $57,500,000 in the original version of the bill.
Section 105 of the bill would amend 18 U.S.C. § 2512, which pertains to the advertising of certain illegal devices. The statute prohibits the advertising of "any electronic, mechanical, or other device, knowing or having reason to know that the design of such device renders it primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications." Section 105 of the bill would specifically include advertising on the Internet.
Section 106 of the bill would amend 18 U.S.C. § 1030(c), which pertains to punishment of crimes involving intentionally accessing a computer without authorization or in excess of authorized access. For example, the bill would increase the maximum penalty to life imprisonment for crimes where the "offender knowingly or recklessly causes or attempts to cause death".
Section 107 of the bill would ensure that providers of communications remain covered under 18 U.S.C. § 2703(e), a "no cause of action provision," which protects providers from law suits when they legally assist law enforcement with an investigation under the new emergency disclosure exception created in the USA PATRIOT Act.
Section 108 of the bill would amend 18 U.S.C. § 3125, regarding emergency use of pen registers and trap and trace (PRTT) devices. Currently, under 18 U.S.C. § 3125, law enforcement authorities may use PRTT devices for 48 hours in certain emergency situations, while court authority is being sought. Section 108 would expand the list of situations to include "an immediate threat to a national security interest" and "an ongoing attack on a protected computer that constitutes a crime punishable by a term of imprisonment greater than one year".
Section 109 of the bill would raise penalties for illegally intercepting cell phone conversations, and increase penalties for unlawful access to stored communications.
Sections 201 through 206 of the bill pertain to the creation of an Office of Science and Technology at the Department of Justice.
House Rules Committee Defines Terms of Debate on Tauzin Dingell Bill
2/26. The House Rules Committee adopted a rule for consideration of  HR 1542, the Tauzin Dingell bill. The House is scheduled to debate and vote on the bill on Wednesday and Thursday, February 27-28.
The Rules Committee determined that the House will not consider either the version of the bill reported by the House Commerce Committee, or that reported unfavorably by the House Judiciary Committee. Instead, the House will consider an amendment in the nature of a substitute [PDF] offered by Rep. Billy Tauzin (R-LA) and Rep. James Sensenbrenner (R-WI). They are the Chairmen of the Commerce Committee and Judiciary Committee, respectively.
The Rules Committee also determined that only three amendments may be offered. Moreover, they must be offered in the order specified by the Rules Committee; and, they cannot be further amended.
The first amendment [PDF] is offered by Rep. Fred Upton (R-MI) and Rep. Gene Green (D-TX). It would increase the maximum penalties that may be imposed on phone companies for violations of telecommunications law.
The second amendment [PDF] is offered by Rep. Chris Cannon (R-UT) and Rep. John Conyers (D-MI). It provides numerous line by line changes. It provides that nothing in the Tauzin Dingell bill "shall restrict or affect in any way the application and enforcement of the Federal and State rules in effect on the date of enactment of such Act relating to the rates, charges, terms, and conditions for the purchasing or leasing of telecommunications services and network elements by competitive telecommunications carriers." It also provides that the bill "shall not restrict or affect in any way -- the authority of the Commission to adopt regulations to prohibit unsolicited commercial e-mail messages", or to adopt regulations regarding customer proprietary network information (CPNI), pormography, or access by persons with disabilities.
The third amendment [PDF] is offered by Rep. Steve Buyer (R-IN) and Rep. Adolphus Towns (D-NY). It is a substitute amendment to the Cannon Conyers amendment. Reps. Buyer and Towns describe it as follows: "Guarantees that CLECs have access to customers served by Bell company high speed networks under FCC -- regulated rates, terms, and conditions. Preserves rules governing CLECs access to Bell facilities, including a rule that permits CLECs to "line share" on Bell copper facilities exclusively for the purpose of providing high speed Internet service. Requires Bell companies to allow CLECs to connect their own high speed Internet facilities to Bell services and equipment."
Tauzin Sensenbrenner Amendment
2/26. The amendment in the nature of a substitute offered by Rep. Billy Tauzin (R-LA) and Rep. James Sensenbrenner (R-WI) would provide regulatory relief to the Baby Bell phone companies with respect to high speed data services.
It provides that "Except to the extent that high speed data service, Internet backbone service, and Internet access service are expressly referred to in this Act, neither the Commission, nor any State, shall have authority to regulate the rates, charges, terms, or conditions for, or entry into the provision of, any high speed data service, Internet backbone service, or Internet access service, or to regulate any network element to the extent it is used in the provision of any such service; nor shall the Commission impose or require the collection of any fees, taxes, charges, or tariffs upon such service."
It would also amend Section 251 to provide that "neither the Commission nor any State shall require an incumbent local exchange carrier to provide unbundled access to any network element for the provision of any high speed data service."
Section 9 of the amendment pertains to antitrust law. It provides that "Section 601(b) of the Telecommunications Act of 1996 (Public Law 104-104; 110 Stat. 143) is amended by adding at the end the following new paragraph: ``(4) CONTINUING OPERATION OF THE ANTITRUST LAWS.—Paragraph (1) shall be interpreted to mean that the antitrust laws are -- (A) not repealed by, (B) not precluded by, (C) not diminished by, and (D) not incompatible with, the Communications Act of 1934, this Act, or any law amended by either such Act.´´ "
Sen. Hollings Denounces Tauzin Dingell Bill
2/26. If the Tauzin Dingell bill were to pass the House, it would still face strong opposition in the Senate. For example, Sen. Ernest Hollings (D-SC), the Chairman of the Senate Commerce Committee, which has jurisdiction over the bill, gave a speech in the Senate on Monday, February 25, in which he called the bill "blasphemy".
Sen. Hollings stated that "the communications bill by Congressmen Tauzin and Dingell that the House will vote on this week is blasphemy. Hailed as a way to enhance competition, it eliminates it. Touted as a way to enhance broadband communications, it merely allows the Bell companies to extend their local monopoly into broadband."
Senators Kohl & DeWine to Hold Hearings on Cable and Satellite Competition
2/26. The Senate Judiciary Committee's Subcommittee on Antitrust, Competition, and Business and Consumer Rights announced that it will hold a pair of hearings on communications related mergers. The first hearing, scheduled for March 6, is titled "Dominance in the Sky: Cable Competition and the Echostar Direct TV Merger". The second hearing, scheduled for April 10, is titled "Dominance on the Ground: Cable Competition and the ATT Comcast Merger". Sen. Herb Kohl (D-WI) will preside. Sen. Mike DeWine (R-OH) is the ranking Republican on the Subcommittee.
AG Ashcroft Testifies on DOJ Budget
2/26. The Senate Appropriations Subcommittee's Subcommittee on Commerce, Justice, State, and the Judiciary held a hearing regarding the Department of Justice (DOJ) budget request for Fiscal Year 2003. Attorney General John Ashcroft testified.
Ashcroft said in his prepared statement that "For information technology critical to the FBI's efforts to combat the threat of terrorism, our total budget request for the FBI includes an increase of $109.4 million to support several new and ongoing projects. These resources will support projects such as the FBI's efforts to scan and digitally store 5 million documents related to terrorist groups and organizations, data management and warehousing, collaborative capabilities, information technology support for Legal Attaches, continuity of operations for FBI Headquarters and offsite facilities, state of the art video teleconferencing capabilities and increased staffing and funding to support FBI mainframe data center upgrades. Funding is also sought to perform necessary maintenance on enterprise wide legacy systems, applications and the Trilogy network."
Electronic Surveillance. He stated that the budget requests "$61.8 million in additional funding to enhance the FBI's surveillance capability to collect evidence and intelligence. These resources will enhance both physical and electronic surveillance capabilities and enable automated sharing of information collected as electronic surveillance intelligence and/or evidentiary material."
USAO IP Telephony. "Our budget requests an additional $11 million to complete the third and final phase of the overall telecommunications convergence initiative in United States Attorneys Offices throughout the Nation: implementing Internet Protocol telephony. This convergence will enable the U.S. Attorneys to encrypt all transmissions, share resources and use telecommunications bandwidth more effectively, and reduce overall operating and maintenance by establishing a common, standardized telecommunications infrastructure."
Internet Crimes Against Children. Ashcroft also stated that "Our budget also seeks an increase of $6.1 million to expand the Internet Crimes Against Children Task Force Program by establishing a regional task force in at least 40 states and expanding capacity building activities through research, training and technical assistance."
Senate Banking Committee Holds Hearing on Financial Reporting
2/26. The Senate Banking Committee held a hearing to examine accounting and investor protection issues, focusing on proposals for change relating to financial reporting by public companies, accounting standards, and oversight of the accounting profession. See, prepared statements of witnesses: Walter Schuetze (SEC Chief Accountant, 1992-95), Michael Sutton (SEC Chief Accountant, 1995-98), Lynn Turner (SEC Chief Accountant, 1998-2001), and Dennis Beresford (Chairman, Financial Accounting Standards Board, 1987-97).
Lynn Turner stated that "The SEC also needs to be provided with the resources to acquire technology that can aid in the electronic screening of filings for potential issues and unusual trends in financial performance. SEC Chairman has indicated he wishes to hire a highly qualified Chief Information Officer. This is long overdue and will require additional funds. But new and enhanced technologies can be a powerful, efficient and effective tool in identifying problems at an earlier date."
WIPO Reports on Cybersquatting and Dispute Resolution
2/26. The World Intellectual Property Organization (WIPO) reported that the total number of cybersquatting cases received by the WIPO grew by "100% in the last quarter of the year. Moreover, it is anticipated that the internationalization of domain names will also create new opportunities for cybersquatters as it becomes possible to register domain names in non-ASCII characters such as Chinese."
The WIPO also reported that "In 2001, the total number of cases filed with WIPO under the Uniform Dispute Respolution Policy (UDRP), the dispute policy for the .com, .net and .org categories, reached 1,506 compared with 1,841 in 2000. This suggests that an expedited on-line dispute resolution service has been effective in dissuading Internet pirates from hijacking names." See, WIPO release.
People and Appointments
2/26. The Federal Communications Commission's (FCC) Common Carrier Bureau (CCB) named three counsel to the Bureau Chief, Dorothy Attwood: Scott Bermann, Jessica Rosenworcel, and Christopher Libertelli. Bergmann will be a Legal Counsel for local competition, broadband deployment and numbering issues. He has been an attorney advisor in the Industry Analysis Division of the CCB since 1996. Rosenworcel will be a Legal Counsel for universal service and broadband issues. She has been an Attorney Advisor in the Policy Division of the CCB since 1999. Before that, she was an associate with the law firm of Drinker Biddle & Reath. Libertelli will be a Special Counsel to the Bureau Chief for Competition Policy; he will coordinate and advance competition policy proceedings. He has been a Legal Counsel to the Bureau Chief since last summer. He previously worked as an associate in the Washington DC office of the law firm of Dow Lohnes & Albertson. See, FCC release [PDF].
2/26. Rex Heinke joined the Los Angeles office of the law firm of Akin Gump as a litigation partner. He focuses on intellectual property, First Amendment, and entertainment and media law. He was the lead attorney for the Los Angeles Times and Washington Post in the case LA Times v. Free Republic, a case involving copyright infringement by a political discussion web site.
2/26. Novell named Christopher Stone to the newly created position of Vice Chairman. See, Novell release.
2/26. The Senate confirmed Robert Blackburn to be a U.S. District Court Judge for the District of Colorado, and Cindy Jorgenson to be a U.S. District Court Judge for the District of Arizona.
More News
2/26. World Trade Organization (WTO) Director General Mike Moore gave a speech titled "Globalisation: the Impact of the Doha Development Agenda on the Free Market Process" to a U.S. Chamber of Commerce meeting in Florida.
2/26. The California Court of Appeal (1/1) issued its opinion [PDF] in HIH Marine Insurance Services v. Gateway Freight Services, a subrogation action involving air carrier liability. This case arises out of the loss of a shipment of hard disk drives from Malaysia to San Francisco via China Airlines. The Court of Appeal affirmed the Superior Court's dismissal of the action.

Go to News Briefs from Febuary 21-25, 2002.