Rep. Boucher Advocates Amending DMCA and Shifting Burden of
Proof on Fair Use
5/10. Rep. Rick Boucher (D-VA) gave
a speech
on copyright and fair use. He advocated legislation shifting the burden of proof
on fair use from the defendants to plaintiffs and prosecutors. He also said that
he will introduce a bill "within the next several weeks" to amend the
DMCA to provide that it is "not criminal conduct under any circumstance to
be active in furtherance of fair use rights".
Erosion of Fair Use Rights. Rep. Boucher stated that there has been
"a consistent erosion over the last few years of the very precious fair use
rights." He elaborated that "The fair use doctrine was in fact created
by the courts as a way to give substance to First Amendment freedom of speech
rights. Simply put, free speech does not mean very much if you have you to get
the permission of a copyright owner in order to use words in a series that
perhaps, coincidentally, are subject to a copyright. So the fair use doctrine
was essential in the view of the American courts in order to give vitality to
our precious First Amendment freedom of speech right."
"Today, however, that precious fair use right is under attack as it never
has been before in the history of our country. The balance that we have always
enjoyed in our law between the rights of the owners of the intellectual
property, and the rights of the users of intellectual property is now
fundamentally changed. That balance was changed by a number of steps."
He cited several changes, including enactment of the Digital Millennium
Copyright Act (DMCA) and the Copyright Term Extension Act (CTEA), the increased
use of copy protected CDs and DVDs, the introduction of S 2048 by Sen. Ernest
Hollings (D-SC), and the experiences of Professor Felton and the ElcomSoft
corporation.
CTEA. Rep. Boucher addressed the Copyright
Term Extension Act. He stated that "I am pleased that the U.S. Supreme
Court is now examining, to determine whether that latest copyright term is
extension is consistent with the limitations on the copyright interest that is
stated in the U.S. Constitution. And I am concerned that this shift in the
historical balance in favor of the owners of intellectual property will broadly
diminish what you are here to discuss today, and that is the public commons of
information that is so essential for progress in our society." See, TLJ
summary of Eldred
v. Ashcroft, a constitutional challenge to the CTEA, now pending before the
Supreme Court.
DMCA. Rep. Boucher also spoke at length about the DMCA. He stated that
the "Congress in passing the DMCA granted unprecedented rights to the
owners of intellectual property, which unless changed, will cede to the
intellectual property owner total control over the work. The new rights go well
beyond the what is necessary to ensure fair compensation to the intellectual
property owner. These new rights go well beyond what is necessary to thwart
piracy."
See, full text
of the Digital Millennium Copyright Act, a 94 pages PDF document, or 18 page summary by the
Library of Congress in PDF.
He continued that "These new rights forecast a time when what is available
for free on the library shelf today, and for limited copying for personal use
purposes, for free today, will be converted into material available only on a
pay per use basis in the future. Total control over the work in ceded through
this law to copyright owner. And, we see the copyright owners beginning to
exercise that greater degree of control at the present time."
"But the day will come, and granted by the power of this law, when what is
available for free today on a library shelf will be available only for pay for
use in the future. And that is, I think, one of the great tragedies and harms of
this law."
Hollings Bill. Rep. Boucher said, "let me suggest one other thing
that troubles me a great deal, and that is the introduction in the Senate of a
bill that would serve broadly to restrict fair use rights." See, S 2048,
the Consumer Broadband and Digital Television Promotion Act, introduced by Sen. Ernest Hollings (D-SC) and others on
on March 21, 2002.
Rep. Boucher added that the Hollings bill "would do a number of other
things. It would require that all digital receivers, recorders, and players come
equipped with a technology standard that would enable that device to respond to
content that contains this government technology standard. Only that content
could be played on the device. There is no assurance that even if the device
works, which is subject to question, you would be able to convey that content to
multiple devices around the home. There is nothing in the legislation to assure
that. You have to make individual copies whenever that happens, and this bill
basically allows one copy to be made. So, the device wouldn't allow the
portability of content to be lawfully acquired for devices within the
home."
Rep. Boucher concluded that "The legislation is unnecessary. And, let me
just say that it is not going anywhere. Senator
Leahy, who has jurisdiction over this matter in his Judiciary Committee, has already
said that the bill is not going to pass. And so, we can put our minds at ease
that this particular measure is not going to pass, at least for now. But it does
bespeak an intent on the part of those who suggested its introduction that
technology be saddled with measures that would broadly inhibit what we have all
come to understand as basic fair use rights."
Rep. Boucher's Two Legislative Proposals. He stated that "I think
that it is time that Congress re-examine the DMCA. And, within the next several
weeks, I am going to be introducing a bill that will achieve that purpose."
He elaborated that "This bill is going to take a fairly surgical approach.
It is going to say that it is not criminal conduct under any circumstance to be
active in furtherance of fair use rights."
Rep. Boucher stated that in the longer run he would like to see legislation that
shifts the burden of proof on fair use. He said this: "In order to
structure a somewhat broader measure, that would create an affirmative right of
fair use, and say that individuals have this basic right, extended by the virtue
of federal law. A lawyer would say that we are really doing is shifting the
burden of proof, one way or the other. But, that burden of proof is important.
It is better to have to make whoever is prosecuting or suing you, establish as a
part of the case in chief, that you are not exercising a fair use right, than
for you to have to offer fair use as a defense. Lawyers will appreciate the
difference." See, codification of the affirmative defense of fair use: 17 U.S.C. § 107.
Rep. Boucher was the keynote speaker at a conference titled "Protecting the
Information Commons: Asserting the Public Interest In Copyright Law and Digital
Infrastructure". It was co-hosted by the New America Foundation and Public Knowledge.
Trade Promotion Authority Moves Closer to Passage in Senate
5/10. Sen. Max Baucus (D-MT) stated in a
release [PDF]
that "we have reached a compromise on fast track, Trade Adjustment
Assistance, Andean trade, and the Generalized System of Preferences, or GSP."
He added that "Senator Grassley and I -- along with the Administration --
were able to reach and agreement that I believe will gain very broad bipartisan
support."
The House passed its version of the bill, HR 3005,
on December 6, 2001. Trade Promotion Authority (TPA), which is also know as fast
track, would give the President authority to negotiate trade agreements which
the Congress can then approve or reject, but not amend. Sen. Baucus is the
Chairman of the Senate Finance
Committee, which has jurisdiction over TPA legislation. This Committee
passed its version of the TPA bill in December by a vote of 18 to 3.
Sen. Baucus and Sen. Charles Grassley
(R-IA), the ranking Republican on the Committee, also released a joint statement [PDF]
summarizing the content of the agreement.
The agreement on Trade Adjustment Assistance (TAA) provides assistance on health
care insurance. It extends the time period for which TAA pays out income support
from 52 to 74 weeks. It expands eligibility to secondary workers. It extends TAA
benefits when a U.S. manufacturing plant moves offshore. And, it expands
benefits.
Sen. Judd Gregg (R-NH) commented on the
compromise in a speech in the Senate on May 10. He addressed the health
insurance provisions. "This is a huge, brand new entitlement being put
together in the middle of the night -- this one especially in the middle of the
night -- which has not been properly vetted and which has significant issues
surrounding it."
He concluded: "The trade adjustment language in this bill raises very
significant problems, and to hook it to the trade promotion authority raises the
question: Is it worth the price of getting trade promotion authority to put in
place these types of expansive public policy initiatives which involve huge
implications on the expenditure side of our Government?"
President Bush gave a speech
in Columbus, Ohio on May 10 at a Taft for Governor luncheon. He spoke about the
Senate trade compromise. He stated that "I'm pleased that the Senate looks
like they've got an agreement on a trade bill. This nation ought to be
confident. We ought to be opening up markets all around the world to trade.
It'll be good for our Ohio farmers to trade, it's good for Ohio small business
people to trade. I hope Congress finally gets a trade promotion authority bill
to my desk. Confident nations open up markets, they don't build walls around
themselves. I'm confident that we're the best producers and innovators in many
products, and therefore we ought to be selling our products around the
world."
The U.S. High Tech Coalition on Trade Promotion Authority, a coalition of
technology industry groups, stated in a release that it "is very pleased
with this news and supports this compromise package." Cynthia Johnson,
Chair of the Coalition, stated in the release that "This is a huge step
toward reaching the goal of passing of TPA and, thus, enabling U.S. negotiators
to pursue new agreements to open foreign markets critical to the U.S. high tech
industry ... We still have a long way to go and will face some tough battles on
amendments."
The Coalition added that it has several trade objectives, including "Tariff
elimination on high tech products; Strong intellectual property
protections; Reform in the regulatory practices of our trade partners; Improved
market access and non-discriminatory treatment for services; and Promotion of
e-commerce."
Tom Donohue, P/CEO of the U.S. Chamber of
Commerce, stated in a release
that "The compromise made by the Senate and the White House shows that both
sides know how important TPA is to our fragile economy. Although, we would
prefer this legislation to be a clean trade bill, we are pleased that we're one
step closer to giving the U.S. the tools it needs to compete in the global
marketplace. We will continue to work with the Senate to defeat any and all
killer amendments to this compromise."
NTIA Director Discusses Spectrum Management
5/10. National Telecommunications and
Information Administration (NTIA) Director Nancy Victory gave a speech
titled "Telecommunications Challenges: The Telecom Tsunami". She spoke
about "spectrum management".
She stated that "One pressing challenge for NTIA is ensuring that spectrum
is available to fuel future wireless growth and to provide the increasingly
indispensable infrastructure for our military, law enforcement and public safety
needs."
She added that "we need to make a concerted effort to eliminate unnecessary
government micromanaging of spectrum uses. This means taking a fresh look at
legacy rules and restrictions to assess their ability to accommodate emerging
technologies or spectrum needs."
She also identified the major spectrum issues. "First, there is the so
called allocation for Third Generation wireless services -- the Internet on and
off ramps for mobile communications -- better know as 3G. Second, there is the
huge cloud of uncertainty hanging over the spectrum that television broadcasters
will be surrendering as they migrate to the digital world of High Definition
Television -- better known as HDTV or more recently ATV. Third, there is the
spectrum currently shared between commercial SMR operators like Nextel, private
radio users such as utilities, airlines and other companies, and public safety
organizations."
She also told jokes, outlined the responsibilities of the NTIA, and advised her
audience that "If Wall Street wants to have an impact on Pennsylvania
Avenue, you better speak out and speak out loudly. Otherwise, you will have no
one else to blame for being ignored as key policy decisions are being
made." She spoke in New York City to the before the 16th Annual Global
Communications Conference sponsored by Goldman Sachs.
House Subcommittee Holds Hearing on IPR and Government R&D
5/10. The House Government Reform
Committee's Subcommittee on Technology and Procurement Policy held a hearing
titled "Intellectual Property and Government R&D for Homeland
Security".
Rep. Tom Davis (R-VA), who presided
at the hearing, stated that most leading information technology companies refuse
to do research for the government because of intellectual property and red tape
concerns.
He stated in his prepared testimony that "In an environment where private
sector R&D spending accounts for almost three fourths of the total spent in
the United States, the Government's role has changed to become a partner in
innovation, rather than the sole driving force. Because IP right are the most
valued assets of companies, the Government must ensure that its policies and
procedures reflect this partnership for innovation."
Richard Carroll, of the Small Business Technology Coalition, testified that the
prevailing attitude of the government is "We paid for it. We own it."
Carroll said that "for small high tech companies in particular, the
government culture of ``we pay for it, we own it´´ has a chilling effect on
their interest in innovating for the government. Understand, that these
companies are the most likely to bring forth the innovations needed to transform
our defense systems, and to meet the needs of homeland defense with rapid,
innovative, and affordable solutions. These new ideas represent the heart of
their company's assets, and their ability to offer strong competitive
alternatives to the status quo is clearly predicated on some level of
intellectual property protection. If they lose that intellectual property
because the government provides it to their competitors, the very survival of
the company is threatened."
See also, prepared testimony
[PDF] of Jack Brock of the General Accounting
Office titled "Intellectual Property: Industry and Agency Concerns over
Intellectual Property Rights".
DC Circuit Grants Rehearing En Banc in Ruggiero Case
5/10. The U.S. Court
of Appeals (DCCir) issued an order
in Ruggiero
v. FCC granting an en banc rehearing. On February 8, a three
judge panel of the Court of Appeals issued its split opinion
holding unconstitutional the ban on issuance of low power FM radio broadcast
licenses to anyone who has previously engaged in an unlicensed operation.
The set of people who have engaged in unlicensed broadcasting who may seek low
power FM (LPFM) licenses is a very small and insignificant group. However, this
case could have a broader impact. The en banc panel may provide an analysis of
the application of the First Amendment to broadcast speech that affects a wider
range of speakers.
The three judge panel previously held that the ban was unconstitutional under
the First Amendment, but did articulate its rationale with clarity. Notably, it
did not even identify the standard of review to apply.
The Federal Communications Commission (FCC)
filed a petition for rehearing en banc. The Court granted the petition, without
explanation. The Court issued an order that states that "Upon consideration
of the respondents' petition for rehearing en banc, the response thereto, and
the vote by a majority of the judges of the court in regular, active service in
favor of the petition, it is ORDERED that the petition be granted. This case
will be reheard by the court sitting en banc."
Background. The Radio Broadcasting
Preservation Act of 2000 (RBPA) permanently prohibits anyone who ever
"engaged in any manner in the unlicensed operation of any station in
violation of ... the Communications Act of 1934" from obtaining a LPFM
radio license from the FCC. Greg Ruggiero is a former pirate broadcaster who
sought a low power FM license from the FCC. He argues that the statute and the
FCC's implementing rules
violate his First and Fifth Amendment rights.
Holding. The three judge panel held that the ban was constitutionally
impermissible because of the relationship of the ban to the underlying purpose
of the statute and implementing regulations. It found that the class of
applicants banned from receiving low power FM licenses is under inclusive. It
wrote, citing News America, that "we find the character
qualification provision so poorly aimed at maximizing future compliance with
broadcast laws and regulations as to ``raise[ ] a suspicion´´ that perhaps
Congress's ``true´´ objective was not to increase regulatory compliance, but
to penalize micro broadcasters' ``message.´´ "
The Court concluded that "we cannot sanction an automatic and permanent
restriction on unlicensed broadcasters' future lawful speech without
understanding why their misdeeds warrant a penalty so much more severe than that
applied to any other misconduct. Yet neither the RBPA itself, nor the
legislative history, nor the record in this case provides a satisfactory
explanation. We thus have no choice but to declare the statute and the
Commission's implementing regulation unconstitutional."
Split. Judge Tatel wrote the opinion. Judge Rogers joined. Judge
Karen Henderson wrote a dissent. She wrote: "What could be more
reasonable or logical than to suspect that those who ignored the Commission's
LPFM broadcast regulations in the past are likely to do so in the future and
therefore to head them off. ... I see no reason the legislature cannot
permissibly tackle a single part of a perceived problem (including one touching
on the First Amendment) through a statute, such as the one here, which is
neither overinclusive nor underinclusive."
More News
5/10. The U.S.
Court of Appeals (9thCir) issued its opinion
[PDF] in Berkla
v. Corel, an appeal involving punitive damages, attorneys fees
and costs. The underlying case arises out of a dispute over electronic databases
of digital images, and involves claims of copyright infringement, breach of
contract, unfair business practices, and breach of confidence. Dennis Berkla
designs electronic databases. Corel is a Canadian software company that makes
CorelDraw and other applications. The jury awarded Berkla compensatory and
punitive damages. The Court then disallowed the jury's award of punitives, and
denied both parties' requests for attorneys fees and costs. The Court of Appeals
affirmed in part and reversed in part.
House Judiciary Committee Progress on Tech Related Bills
5/9. The House Judiciary Committee
dealt with several technology related bills this week. The following is a
summary of the action on each bill.
HR 3215,
the Combatting Illegal Gambling Reform and Modernization Act. This is Rep. Bob Goodlatte's (R-VA) Internet
gambling bill. On Wednesday, May 8, the Committee began mark up. However, it
proceeded only as far as opening statements. The Committee has not yet scheduled
a continuation of this mark up.
HR 3482,
the Cyber Security Enhancement Act of 2001. The Committee amended and
approved this bill on Wednesday, May 8.
HR 4623,
the Child Obscenity and Pormography Prevention Act of 2002. The Crime
Subcommittee held a hearing on the morning of Thursday, May 9, and then amended
and approved the bill later in the day. The full Committee is likely to mark up
the bill next week. The full House may approve the bill before the Memorial Day
recess.
HR 4640,
a bill to provide criminal penalties for providing false information in
registering a domain name on the Internet. The Crime Subcommittee had scheduled
this bill for its hearing and mark up meetings on Thursday, May 9. However, it
was removed from the agenda of both meetings.
HR 4658,
the Truth in Domain Names Act. The Crime Subcommittee had scheduled this
bill for its hearing and mark up meetings on Thursday, May 9. However, it was
removed from the agenda of both meetings.
House Crime Subcommittee Reschedules Hearing & Markup of
Domain Names Bills
5/9. The House Judiciary Committee's
Subcommittee on Crime has rescheduled for Friday, May 17, its meeting to hear
testimony, and then mark up, HR 4640 and HR 4658.
HR 4640
is an untitled bill to provide criminal penalties for providing false
information in registering a domain name on the Internet. HR 4658 is
titled the Truth in Domain Names Act. The Crime Subcommittee had scheduled these
bills for its hearing and mark up meetings on Thursday, May 9. However,
they were removed from the agenda of both meetings, pursuant to the 24 hour
notice rule.
House Research Subcommittee Approves Two Bills
5/9. The House Science Committee's
Subcommittee on Research held a hearing on HR 4664, the National Science
Foundation Reauthorization Act of 2002. The bill would authorize the doubling
the agency's budget in five years. The Subcommittee approved one amendment,
renaming the bill the Investing in America's Future Act. The bill, as amended,
was then approved by a unanimous voice vote.
The Subcommittee on Research also approved by voice vote at its May 9 meeting HR 3130,
the Undergraduate Science, Mathematics, Engineering, and Technology Education
Improvement Act, which was introduced under the title, Technology Talent Act of
2001.
This bill would authorize grants to be awarded on a competitive basis to
institutions of higher education to increase the number of students studying and
receiving associates or bachelor's degrees in science, mathematics, engineering,
and technology.
Both bills are likely to be approved by the full Science Committee before the
Memorial Day recess. There was no dispute within the Committee over these bills.
However, whether the full House will go along is altogether another question.
FRB Vice Chairman Addresses Communications, Information and
Terrorism
5/9. Federal Reserve Board
Vice Chairman Roger
Ferguson gave a speech
titled "Implications of 9/11 for the Financial Services Sector". He
recommended that financial institutions should seek greater redundancy of
telecommunications services through alternative technologies, including
Internet, satellite, and wireless services. He spoke at the Conference on Bank
Structure and Competition, in Chicago, Illinois.
He first reviewed the affect of the terrorist attack in New York City upon
communications. He stated that "The destruction of telecommunications
infrastructure supporting lower Manhattan disrupted the telephone connections
for several days between the whole nation and financial markets and
intermediaries located in the lower Manhattan financial district. This
disruption created bottlenecks in the processing of financial transactions and
caused a temporary -- but severe -- dislocation of liquidity for financial
institutions. The primary markets closed temporarily, to facilitate disaster
recovery efforts and to ensure fair and orderly markets, until
telecommunications could be restored."
He added that "Banks and other financial intermediaries stayed open. Key
wholesale and retail payments system remained operational, like other financial
activities, except to the extent that telecommunications disruptions had a
temporary or local effect."
He next offered his assessment of why the financial system performed so well
following the terrorist attacks. "First, the financial industry
incorporated information technology into its business processes many years ago
and since then has encouraged innovations in business process to achieve
efficiency and security. As a result, industry participants are extremely
knowledgeable about technology and the related operations risk."
"Second, financial institutions understand that it is in their best
business interest to make business continuity planning an executive management
issue, requiring top level involvement and not insignificant investment.
Preparations for the century date change gave us a much clearer understanding of
the financial system's dependence on technology and on the complexities of
managing operations risk", said Ferguson.
"Third, financial institutions have long understood the need for strong
internal controls and physical security. As banks increased reliance on
information technology, they naturally incorporated measures to ensure the
security of information. Moreover, financial institutions recognized immediately
that the increasing role of information system networks and the Internet in the
financial markets engendered new risks, and they became leaders in addressing
cyber protection issues." He then praised the financial industry
information sharing and analysis center (ISAC).
Ferguson also offered a few lessons to be learned from September 11. He said
that "institutions will need to develop internal business resumption
standards and define their recovery targets in a fairly consistent manner."
He also stated that "financial institutions should seek greater redundancy
of telecommunications services through alternative technologies (Internet,
satellite, and wireless) and eliminate potential single points of failure."
FCC Announces Agenda of May 16 Meeting
5/9. The Federal Communications Commission
(FCC) announced the agenda for its Thursday, May 16, meeting. See, agenda.
It includes approval of the following items.
A Notice of Proposed Rulemaking concerning section 272(f)(l), the sunset of the
BOC separate affiliate and related matters.
A Report and Order allowing private cable operators to use frequencies in the 12
GHz band of the Cable Television Relay Service (CARS). (CS Docket No. 99-250;
RM-9257).
An Order concerning extension of the October 5, 2001, digital television
construction deadline; and a Notice of Proposed Rulemaking on remedial steps for
failure to comply with the DTV construction schedule.
A Second Report and Order concerning regulations for spread spectrum systems.
(ET Docket No. 99-231).
A Report and Order concerning service rules for the 216-220 MHz, 1390-1395 MHz,
1427-1432 MHz, 1670-1675 MHz, 2385-2390 MHz and the paired 1392-1395 MHz and
1432-1435 MHz Bands. (WT Docket No. 02-8; RM-9267, RM-9692, RM-9797, RM-9854,
RM-9882).
House Committee to Hold Hearing and Mark Up of Tech Crime
Bills
5/9. The House Judiciary Committee's
Subcommittee on Crime is scheduled to hold a hearing, and then a mark up
session, for three technology related crime bills, on Thursday, May 9. See, HJC schedule.
HR 4640,
a bill to provide criminal penalties for providing false information in
registering a domain name on the internet, was introduced by Rep. Howard Coble (R-NC) and Rep. Howard Berman (D-CA) on May 2. It
would provide that "Whoever knowingly and with intent to defraud provides
material and misleading false contact information to a domain name registrar,
domain name registry, or other domain name registration authority in registering
a domain name shall be fined under this title or imprisoned not more than 5
years, or both."
HR 4658,
the Truth in Domain Names Act, was introduced by Rep. Mike Pence (R-IN), Rep. Sheila Lee (D-TX), and Rep. Robert Simmons (R-CT) on May 2. It
would provide that "Whoever knowingly uses a misleading domain name with
the intent to attract a minor into viewing a visual depiction of sexually
explicit conduct on the Internet shall be fined under this title or imprisoned
not more than 2 years, or both."
Finally, HR 4623,
the Child Obscenity and Pormography Prevention Act of 2002, pertains to computer
generated images.
People and Appointments
5/9. The Senate confirmed four U.S. District Court Judges: Leonard Davis
(Eastern District of Texas), Andrew Hanen (Southern District of Texas), Samuel
Mays (Western District of Tennessee), Thomas Rose (Southern District
of Ohio).
More News
5/9. President Bush urged Senate Democrats to stop delaying hearings and
confirmations of his judicial nominees. He stated that "We have a vacancy
crisis in America. There are too many seats that aren't filled with judges and,
therefore, America hurts, America is not getting the justice it needs. Ours is a
system that relies upon an independent court system, and when there is
vacancies, the American people suffer. And I call upon the Senate to approve --
at least give hearings to people we've sent up to the Senate." See, transcript
of press conference, and White House release.
5/9. A jury of the U.S.
District Court (NDCal) returned a guilty verdict against Keith Kim on one
count of making a material false statement to the Securities
and Exchange Commission (SEC), in violation of 18 U.S.C. § 1001.
The statement was made during the SEC's investigation into the trading in shares
of Meridian Data, Inc., based upon insider information that Meridian and Quantum
Corp. were in merger negotiations. See, USAO release.
5/9. The Software & Information Industry
Association (SIIA) announced that it acquired the New York New Media Association (NYNMA). See, SIIA release.
EU Investigates Deutsche Telekom for Antitrust Violations
5/8. The European Commission
(EC) announced that it sent Deutsche Telekom
(DT) "a statement of objections setting out the preliminary conclusion that
the German incumbent telecommunications operator has abused its dominant
position through unfair pricing regarding the provision of local access to its
fixed telecommunications network (local loop)." (Parentheses in original.)
The EC further stated that it "is concerned about DT's practice of charging
new entrants higher fees for wholesale access to the local loop than what DT's
subscribers pay for retail access. This discourages new companies from entering
the market and, therefore, creating new jobs, and reduces the choice of
suppliers of telecoms services as well as price competition for consumers."
Competition Commissioner Mario Monti
stated that "After four years of complete liberalisation of the
telecommunications markets in Europe, competition has come to a critical stage.
This is particularly acute in the local loop where many very promising new
entrants have already been forced to give up their business. I believe that much
can still be done to foster competition in this field and that is clearly one of
our priorities now. We have already acted in Italy and Spain to ensure a proper
balance between the monthly telephone subscription fees and the call charges,
allowing the new entrants in both countries to better compete with the incumbent
operators." See, EC
release.
House Judiciary Committee Approves Cyber Security Enhancement
Act
5/8. The House Judiciary Committee
amended and approved the Cyber Security Enhancement Act of 2001. See, HR 3482, as approved
by the Committee.
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 communications 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.
The Committee approved an amendment in the nature of a substitute offered by Rep. Lamar Smith (R-TX), the sponsor
of the bill. The amendment changed the language of Section 102, regarding
voluntary disclosures to law enforcement entities, which has been the most
controversial section of the bill.
This section 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 previous version of the bill, which was approved by the Crime Subcommittee
on February 26, would have allowed 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."
The version just approved by the Judiciary Committee would allow disclosure
"to a Federal, State, or local 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 without delay of
communications relating to the emergency."
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". The
change from the subcommittee version, to that just approved by the full
committee, is that the full committee version restricts the information
disclosed to "communications relating to the emergency".
The Committee also approved two amendments to the amendment in the nature of a
substitute. First, the Committee approved an amendment offered by Rep. Bobby Scott (D-VA) that adds to
Section 102 a requirement that "a government entity that receives a
disclosure under this section shall file, no later than 90 days after such
disclosure, a report to the Attorney General ..." It further provides that
the Attorney General shall publish all such reports once per year in a report to
the Congress.
The Committee also approved an amendment offered by Rep. Melissa Hart (R-PA) that would amend 18 U.S.C. § 3105 to
provide that "The presence of an officer is not required for service or
execution of a warrant under section 2703 when the provider of electronic
communications service or remote computing service produces the information
required in the warrant." That is, a law enforcement officer need not
personally serve a search warrant on an ISP when the ISP provides the
information that is sought in the warrant.
See also, "House Crime Subcommittee Approves Cyber Security Bill," in TLJ Daily E-Mail Alert
No. 377, Feb. 27, 2002, and "House Committee Holds Hearing on Cyber
Security Enhancement Act", in TLJ Daily E-Mail Alert
No. 367, Feb. 13, 2002.
Senate Committee Holds Hearing on Cyber Security Information
Sharing
5/8. The Senate Governmental
Affairs Committee held a hearing on S 1456,
the Critical Infrastructure Information Security Act of 2001, sponsored
by Sen. Bob Bennett (R-UT). The bill
contains a Freedom of Information Act (FOIA) exemption to encourage the sharing
of information regarding cyber security with the federal government, and an
antitrust exemption to encourage cooperative efforts.
Deputy Assistant Attorney General John Malcolm stated that "The Justice
Department believes that the sharing of private sector security information on
critical infrastructure between private sector entities and with the federal
government to avert acts that harm, or threaten to harm, our national security
is of the utmost importance."
Malcolm also reviewed existing FOIA law in his written testimony. He stated that
"Exemption 4 of FOIA protects ``trade secrets and commercial or financial
information obtained from a person [that is] privileged or confidential.´´ The
exemption affords protection to those business submitters who are required to
furnish commercial or financial information to the government, either directly
or indirectly, by safeguarding them from the competitive disadvantages that
could result from disclosure."
Malcolm added that "It is important to recognize that the courts have
regularly rejected any notion that either an information submitter's request for
confidentiality, or an agency's promise that submitted information would not be
released, by itself, suffices to insulate such information from disclosure under
FOIA."
He continued that the U.S. Court of
Appeals (DCCir) interpreted Exemption 4 in Critical Mass Energy Project
v. NRC, 975 F.2d 871 (1992) (en banc), cert. denied, 113 S. Ct. 1579 (1993).
He stated that this case held that "commercial information information that
is required to be furnished to the Government can be withheld primarily to the
extent that the Government can demonstrate that its disclosure would result in
``substantial competitive harm.´´ However, where information is ``voluntarily´´
submitted to the government, such information is protected to the extent that it
is not ``customarily´´ disclosed to the public by the submitter, a
considerably easier standard to satisfy. It is our expectation that most
information regarding critical infrastructure vulnerabilities will fall into the
``voluntarily´´ submitted category and will, therefore, readily qualify for
Exemption 4 protection under the DC Circuit’s Critical Mass
decision."
However, Malcolm added that "business submitters are aware that this D.C.
Circuit Court precedent might not come to be accepted in all other judicial
circuits, which gives rise to reasonable concerns. ... Were the decision in Critical
Mass a definitive legal principle decided by the United States Supreme
Court, concerns regarding protection of this information would be greatly
reduced. Since that is not the case, the Department recognizes that the
broad protection afforded such information by the District of Columbia appellate
court does not provide the complete assurances to the submitters of private
sector infrastructure that they seek."
Harris Miller of the Information Technology
Association of America (ITAA) endorsed S 1456. He stated that
"corporate counsels advise their clients not to share voluntarily the
details of computer attacks with government agencies because the risk that such
data could ultimately be divulged through the Freedom of Information Act (FOIA)
-- even over the agency's objections -- is unacceptably high."
David Sobel of the Electronic Privacy Information
Center (EPIC) testified in opposition to creating a new cyber security
information FOIA exemption. He said in his prepared testimony that "this
exemption approach is fundamentally inconsistent with the basic premise of the
FOIA ... the Freedom of Information Act has worked extremely well over the last
25 years, ensuring public access to important information while protecting
against specific harms that could result from certain disclosures. After
monitoring the development of critical infrastructure protection policy for the
last several years, I have heard no scenario put forth that would result in the
detrimental disclosure of information under the current provisions of the FOIA."
See, prepared testimony of witnesses: Ronald Dick
(Director, FBI's National Infrastructure Protection Center), John Malcolm
(Deputy Assistant Attorney General, Criminal Division, U.S. Department of
Justice), John
Tritak (Director, Critical Infrastructure Assurance Office), Michehl Gent
(P/CEO, North American Electric Reliability Council), Harris Miller
(President, ITAA), Alan
Paller (Director of Research, The SANS Institute), Ty Sagalow
(Board Member, Financial Services ISAC), David Sobel
(General Counsel, EPIC), Rena Steinzor
(Professor, University of Maryland School of Law).
Rep. Stearns Introduces Information Privacy Bill
5/8. Rep. Cliff Stearns (R-FL),
Chairman of the House Commerce
Committee's Subcommittee on Commerce, Trade & Consumer Protection, and
others, introduced HR 4678,
the Consumer Privacy Protection Act of 2002.
The bill, which is 33 pages long on paper, would require both online and offline
"data collection organizations" to provide a clear notice of what
information about consumers is collected, and how that information will be used.
The bill also contains opt out language. It would also mandate information
security policies. Enforcement would be handled by self regulatory programs,
backed up by the Federal Trade Commission
(FTC). The bill creates no private right of action, or state right of action.
The bill would also preempt state laws. The bill exempts government entities and
certain non profits and small businesses.
A bipartisan group of Representatives held a joint press conference in the
Capitol Building to announce the introduction of the bill. The participants
included, in addition to Rep. Stearns, Rep.
Billy Tauzin (R-LA), Rep. Rick
Boucher (D-VA), Rep. Anna Eshoo
(D-CA), Rep. Lee Terry (R-NE), and Rep. Jim Moran (D-VA). Rep. Tauzin is the
Chairman of the House Commerce
Committee, which has jurisdiction over the bill.
Rep. Stearns said that the "underlying principal that anchors this bill is
DO NO HARM. Our economy is a consumer based economy, where some two thirds of
all economic activity is driven by consumer spending. Historically, consumer
information has played an important role in our economic growth. The free flow
of consumer information has served all of us, as American consumers, well
throughout our modern economic history. Any federal law or regulation that
unduly burdens such information sharing activity, may bring about a substantial
and negative impact upon our economy."
Rep. Eshoo said that "privacy is a right that the American people really
cherish. ... We don't want anyone -- either big browser, or big government --
coming after it." Rep. Moran said that "this is responsible balanced
legislation that goes a long way towards protecting people's privacy" while
also protecting technology companies.
Rep. Boucher said that "many companies will offer higher level of
protection than the statute provides". He added that "this measure
serves as a floor, not a ceiling."
The bill's backers touted its chances for passage. Rep. Eshoo stated that
"I think that because this is so bipartisan that we have a good shot at
it." Rep. Moran said that "it stands a good chance of enactment."
Rep. Tauzin and Rep. Stearns both stated that the next step is for the House
Commerce Committee's Subcommittee on Commerce, Trade & Consumer Protection
to hold hearings on the bill. Rep. Tauzin added that the bill is "a good
statement of the consensus" on privacy, but it is still a work in progress.
Notice. The bill requires that a "data collection organization shall
establish a privacy policy with respect to the collection, sale, disclosure for
consideration, or use of the personally identifiable information of
consumers". This privacy policy must be "clear and conspicuous and
written in plain language" and "accessible". It must disclose,
among other things, "The identity of each data collection organization, or
a description of each class or type of data collection organization, that may
collect or use the information", "The types of information that may be
collected, sold, disclosed for consideration, or used", "How the
information may be used", and "Whether the consumer is required to
provide the information in order to do business with the data collection
organization". See, Section
102.
Moreover, the data collection organization must provide notice to consumers,
which, in the case of a website, may be a hyperlink to another page. See, Section
101.
Opt Out Provision. The bill provides that "A data collection
organization shall provide to the consumer, without charge, the opportunity to
preclude any sale or disclosure for consideration of the consumer’s personally
identifiable information, that may be used for a purpose unrelated to a
transaction with the consumer, to any data collection organization that is not
an information- sharing partner of the data collection organization providing
such opportunity." See, Section
103.
Information Security Policy. The bill also requires data collection
organizations to maintain security policies. It states that "A data
collection organization shall prepare, revise as necessary, and implement an
information security policy that is applicable to the information security
practices and treatment of personally identifiable information maintained by the
data collection organization, in order to prevent the unauthorized disclosure or
release of such information." See, Section
105.
FTC Civil Enforcement. The bill provides that violation of the provisions
of the bill would constitute an unfair or deceptive act or practice in violation
of Section 5 of the FTC Act, 15 U.S.C. § 45(a)(1).
Civil penalties under the FTC Act would be limited to $500,000 for all related
violations by a single violator. See, Section
107.
Self Regulatory Programs. The bill also contemplates that the much of the
enforcement would be conducted by private self regulatory programs that are
approved by the FTC. To give companies an incentive to join such programs, the
bill provides that "A data collection organization that participates in a
self-regulatory program ... shall not be liable for a civil penalty arising out
of a violation ... unless such violation results from willful noncompliance with
the guidelines, procedures, requirements, or restrictions of the program."
See, Section
106.
Existing Federal Privacy Laws. The provides that "To the extent that
personally identifiable information protected under this title is also protected
under a provision of Federal privacy law", such as the Gramm Leach Bliley
act, a "data collection organization that complies with the relevant
provision of such other Federal privacy law shall be deemed to have complied
with the corresponding provision of this title." See, Section
109.
Preemption of State Laws. The bill provides that it "preempts any
statutory law, common law, rule, or regulation of a State, or a political
subdivision of a State, to the extent such law, rule, or regulation relates to
or affects the collection, use, sale, disclosure, or dissemination of personally
identifiable information in commerce. " See, Section
109.
No State Right of Action. States could not bring actions to enforce this
bill. It states that "No State, or political subdivision of a State, may
take any action to enforce this title." See, Section
109.
No Private Right of Action. The bill does not provide any private right
of action. "No private civil action relating to any act or practice
governed under this title may be commenced or maintained in any State court or
under State law (including a pendent State claim to an action under Federal
law)." (Parentheses in original.) See, Section
108.
Entities Not Covered by the Bill. The bill would exempt government
entities, non-profit entities ("to the extent that personally identifiable
information is not used for a commercial purpose"), and certain small
businesses (a business which has fewer than 25 employees, which has annual gross
revenue less than $1,000,000, which "collects or uses personally
identifiable information from fewer than 1,000 consumers for a purpose unrelated
to a transaction with the consumer", which "does not process
personally identifiable information of consumers", and which "does not
sell or disclose for consideration such information to another person").
See, Section
401.
Identity Theft. The bill also addresses identity theft, such as through
requiring the FTC "to take such action as necessary to solicit the
acceptance and acknowledgement of standardized Identity Theft Affidavit
..." (See, Title
II.)
Bruce Josten of the U.S. Chamber of Commerce
stated in a release
that "Business has heard the call from consumers that security and privacy
are high priorities, and they have responded", and business "has taken
the lead in developing transparent ways to empower and protect consumers."
Hence, said Bruce Josten, "The Chamber strongly cautions Congress to think
twice before enacting unnecessary laws that could stifle the emerging Internet
economy."
Jonathan Zuck, President of the Association
for Competitive Technology (ACT) stated in a release that "While this
is great step forward from previous proposals, it just isn't 'there' yet. ... On
privacy policies, the bill only seems to codify existing business practices.
This could prevent ebusinesses from changing their privacy policies to meet
consumer demands while imposing costs on those businesses as they try to meet
the letter of the law from the new regulations."
Local Radio Ownership Rules and the Internet
5/8. The Minority Media and Telecommunications Council (MMTC) submitted a reply
comment [61 pages in PDF] to the Federal
Communications Commission (FCC) in its proceeding titled "In the Matter
of Rules and Policies Concerning Multiple Ownership of Radio Broadcast Stations
in Local Markets" (MM Docket No. 01-317). The MMTC argued that "Some
commenters urged that the Internet has already obviated the need for multiple
radio ownership. Perhaps that will happen someday, but Internet radio has hardly
become a substitute for the real thing. ... At some level, the Internet is a
substitute for radio. But it is a poor substitute."
In contrast, Viacom submitted a reply
comment [PDF] in which it stated that the FCC "has maintained a local
radio ownership rule in one form or another for over 60 years based on the
hypothesis that the rule is necessary to promote public access to diverse
viewpoints. ... The average American suffers not from a lack of access to media
outlets, but from news and information overload."
People and Appointments
5/8. President Bush announced his intent to nominate Ben Bernanke to be a
Member of the Board of Governors of the Federal
Reserve System. He is Chairman of the Department of Economics at Princeton
University. He has been picked for a seat which has only two years remaining in
its term. See, WH
release.
5/8. President Bush announced his intent to nominate Donald Kohn to be a
Member of the Board of Governors of the Federal
Reserve System. Kohn is a long time advisor to Alan Greenspan. He will serve
the remainder of a fourteen year term expiring on January 31, 2016. See, WH
release.
5/8. Lisa Nelson was named Co-Chair of CapNet.
She is VP of External Relations for AOL Time Warner. She replaces George
Vradenburg, who is an advisor to AOL Time Warner. The other Co-Chair remains
former Congressman Vic Fazio of Clark
& Weinstock. See, CapNet release.
5/8. Michael Willner, P/CEO of Insight Communications, was re-elected for
a second term as Chairman of the Board of Directors of the National Cable & Telecommunications Association
(NCTA). See, NCTA
release.
5/8. Marc Signorino was named Counsel for Technology Policy at the American Electronics Association. See, release.
More News
5/8. The Securities and Exchange Commission
(SEC) announced that it "approved proposed changes to the rules of the
National Association of Securities Dealers and the New York Stock Exchange to
address conflicts of interest that are raised when research analysts recommend
securities in public communications. These conflicts can arise when analysts
work for firms that have investment banking relationships with the issuers of
the recommended securities, or when the analyst or firm owns securities of the
recommended issuer." See, SEC release.
5/8. The Federal Election Commission (FEC)
fined the Friends of Jane Harman $12,000 for failure to file 48 hour reports. Rep. Jane Harman (D-CA) is a member of
the House Commerce Committee and
its Telecom and Internet Subcommittee. See, FEC release.
5/8. Lori Richards, Director of the Securities and
Exchange Commission's (SEC) Office of Compliance Inspections and
Examinations, gave a speech
titled "Analysts Conflicts of Interest: Taking Steps to Remove Bias".
She spoke to the Financial Women's Association
in New York, New York.
Rep. Levin Addresses TPA
5/7. Rep. Sander Levin (D-MI), the
ranking Democrat on the House Ways and
Means Committee's Subcommittee on Trade, gave a speech
regarding trade promotion authority (TPA) at the Center
for Strategic and International Studies (CSIS). He stated that "U.S.
trade policy is following no coherent course at all." He also criticized
the administration and Republicans for adopting a "whatever its takes"
approach to passing TPA legislation that "results in a minimization of the
substantive issues of trade policy and does not offer sound guiding principles
for the future."
Levin also addressed the current nature of trade negotiations. "We have now
moved beyond even the challenges of many basic non-tariff barriers and have
entered an era in which ``trade policy´´ includes the full range of policy,
laws and regulations that used to be considered exclusively or primarily
``domestic policy´´ -- including domestic agriculture programs, antitrust law,
food safety, telecommunications, natural resources conservation, labor
standards, insurance regulation, and the intersection of effective protection of
intellectual property rights with health policy. Trade policy has become
domestic policy and vice versa in ways that have far reaching implications for
how we negotiate trade agreements and legislate domestic rules."
The House passed its TPA bill, HR 3005,
in December of 2001. The Senate
Finance Committee passed its version of the bill later in December. The full
Senate has yet to vote on the bill.
NSF Authorization Bill Introduced
5/7. Rep. Sherwood Boehlert (R-NY)
and others introduced HR 4664, the National Science Foundation
Authorization Act of 2002. The bill would authorize 15% increases in
appropriations for each of fiscal years 2003, 2004 and 2005 for the National Science Foundation (NSF). The bill
includes increases in funding for networking and information technology
research, nanoscale science and engineering, mathematical sciences, and major
research instrumentation.
Rep. Boehlert, the Chairman of the House
Science Committee, stated that "NSF funds research that is of critical
importance to the future of the nation's economy -- including such areas as
Information Technology and Nanotechnology, which the Administration has
emphasized in its budget proposal. NSF funds research that is of critical
importance to the nation's security -- including work on such vital areas as
cybersecurity. NSF funds research that is of critical importance to the nation's
health and well-being -- including genomics research and climate change
research. And last, but far from least, NSF funds research and educational
activities that are of critical importance to the nation's students; from the
kindergarten classroom to the post doctoral laboratory, NSF is the agency that
ensures that we are improving math, science and engineering education."
The House Science Committee has scheduled a hearing on this bill for Thursday,
May 9.
FCC Reports on Consumer Complaints
5/7. The Federal Communications Commission's
(FCC) Consumer and Governmental Affairs Bureau
(CGB) released a report
[PDF] titled "Quarterly Report on Informal Consumer Complaints and
Inquiries Received." The report covers the first quarter of 2002. The vast
majority of the complaints were about wireline telecommunications services.
167 complaints pertained to cable services. And of these 167 complaints, only 11
were broadband related.
270 complaints pertained to radio and television broadcasting. Most of these
complaints -- 242 -- pertained to indecent or obscene programming.
2,978 complaints pertained to wireless telecommunications, with 1,850 of these
pertaining to billing and rates.
7,204 complaints pertained to wireline telecommunications. 3,350 of these
pertained to billing and rates. The FCC did not report statistics on the number
of complaints that pertained to DSL service. See also, FCC
release.
House Passes Bill to Delay Spectrum Auctions
5/7. The House passed HR 4560,
the Auction Reform Act of 2002, by a voice vote. The bill states that the FCC
"shall not commence or conduct auctions 31 and 44 on June 19, 2002, as
specified in the public notices of March 19, 2002, and March 20, 2002 (DA 02-659
and DA 02-563)."
The bill was introduced on April 24 by Rep.
Billy Tauzin (R-LA) and Rep. John
Dingell (D-MI), the Chairman and ranking Democrat on the House Commerce Committee, and by most
of the membership of the Committee. It was approved by the Committee on May 2.
Rep. Tauzin explained the bill on the House floor. He stated that "There
are clearly two conflicting mandates in statute. The Balanced Budget Act of 1997
and the Consolidated Appropriations Act for FY 2000 mandate that the 700 MHz
band, both the upper and lower parts of that band, must be auctioned by dates
certain."
"However, Section
309(j)(3)(E)(ii) of the Communications Act requires the Commission to
include safeguards in auctions that, among other things, 'ensure that, in
scheduling of any competitive bidding under this subsection, an adequate period
is allowed ... to ensure that interested parties have a sufficient time to
develop business plans, assess market conditions, and evaluate the availability
of equipment for the relevant services.'"
Tauzin continued that "When there is such a clear conflict in statute, the
Commission has considerable discretion to determine whether to move forward with
the auction. In 2000, when the Commission originally delayed the 700 MHz
auction, the agency concluded that '[i]n complying with conflicting statutes,
and resolving those directives as we proceed toward an auction, we believe the
Commission's primary goal should be to conduct an auction that is fair,
efficient, puts the spectrum to the best use, and thereby best serves the public
interest.' The Commission also concluded that a delay was appropriate so that
bidders would have an adequate time to develop business plans and assess market
conditions."
"The reasons that existed in 2000 for the Commission's delay of the auction
still exist today. Potential bidders cannot develop business plans when there is
no certainty concerning when the 700 MHz band will be vacated by broadcasters
occupying Channels 52-69. It is also impossible to assess market conditions
before it is clear when the band will be available for new services and whether
other spectrum will be made available for third-generation services. And it is
impossible to evaluate if and when mobile communications equipment will be
available for use in the 700 MHz band when manufacturers have no idea when the
band will be vacated by the broadcasters," said Rep. Tauzin.
Sen. John Ensign (R-NV) introduced S 2454,
the companion bill in the Senate, on May 2. No action has yet been taken on that
bill. Secretary of Commerce Donald Evans
has announced his support for a postponement of the auctions.
FCC Files Brief with Supreme Court in Nextwave Case
5/7. The Federal Communications Commission
(FCC) filed its brief [71
pages in PDF] with the Supreme Court of
the U.S. in FCC v. NextWave.
NextWave obtained spectrum licenses at
FCC auctions in 1996. The FCC permitted NextWave to obtain the licenses, and
make payments under an installment plan, thus creating a debtor creditor
relationship between NextWave and the FCC. NextWave did not make payments
required by the plan, and filed a Chapter 11 bankruptcy petition. The FCC
cancelled the licenses. It then proceeding to re-auction the disputed spectrum.
The U.S. Court of Appeals (DCCir)
ruled in its June 22, 2001, opinion
that the FCC is prevented from canceling the spectrum licenses by § 525 of the
Bankruptcy Code. The FCC petitioned the Supreme Court for writ of certiorari.
The Court granted certiorari.
The FCC argues in its brief that § 525 of the Bankruptcy Code "does not
displace the FCC's exclusive regulatory authority over spectrum licensing and
the license allocation mechanism established in 47 U.S.C. § 309(j)."
The FCC's brief relies on cases dating back to the first half of the 20th
Century.
The FCC's brief quotes the Communications Act of 1934, at 47 U.S.C. § 301,
which provides "for the use of such channels, but not the ownership
thereof, by persons for limited periods of time, under licenses granted by
Federal authority". It also quotes 47 U.S.C. § 309(a), which gives the FCC
authority to issue licenses in the "public interest, convenience, and
necessity." The FCC brief then argues that "Because of that delegation
of authority, ``it is the Commission, not the courts, which must be satisfied
that the public interest will be served´´ by authorizing an applicant to use
scarce radio spectrum. FCC v. WOKO, Inc., 329 U.S. 223, 229 (1946).
Consequently, ``no court can grant an applicant an authorization which the
Commission has refused,´´ Scripps- Howard Radio, Inc. v. FCC, 316 U.S. 4, 14
(1942) ..."
People and Appointments
5/7. Rep. Tom Sawyer
(D-OH) was defeated in the Democratic primary election in his newly drawn Ohio
congressional district. He is a member of the House Commerce Committee and its
Telecom and Internet Subcommittee and Trade and Consumer Protection
Subcommittee. These committees handle much of the technology related issues in
the House.
5/7. Rep. Steve Buyer (R-IN)
won his Republican primary election in his newly drawn Indiana congressional
district. He is a member of the House
Commerce Committee.
More News
5/7. The U.S. Patent and Trademark Office (USPTO)
published a notice
in the Federal Register regarding a proposed rule that would adjust fees. See,
Federal Register, May 7, 2002, Vol. 67, No. 88, at Pages 30634 - 30637.
5/7. The Department of Justice filed a brief
in EPIC v. Office of Homeland Security, a Freedom of Information Act (FOIA)
suit, in which it argues that the Office
of Homeland Security is not an agency within the meaning of the FOIA, 5 U.S.C. § 552, and
therefore, not subject to its requirements. The Electronic
Privacy Information Center (EPIC) filed its complaint [PDF]
on April 2, 2002.
5/7. The Electronic Privacy Information Center
(EPIC) and Junkbusters filed an objection
[PDF] to the proposed
settlement in the case In re Doubleclick Privacy Litigation. They
argue that "The proposed settlement does not provide any significant
benefit to class members that was not previously agreed to by Doubleclick as part of its earlier
agreement with the Federal Trade Commission
under the terms of the Network
Advertising Initiative". Moreover, they argue that "the monetary
reward will be provided only to the attorneys for the private litigants; no
funds from the settlement will be distributed to any members of the class
..." This is D.C. No. 00-CIV-0641 (NRB) pending in the U.S. District Court (SNDY).
5/7. Bruce Mehlman, Assistant Secretary for Technology Policy at the Commerce
Department, gave a speech
titled "Innovation in America 2002: What's the Role for Our Federal
Labs?". He spoke to the Federal Lab
Consortium in Little Rock, Arkansas. He said that "Knowledge
development and technology commercialization are the new drivers of economic
growth, both in the U.S. and around the world. Our ability to create new
innovations and harness their power will directly impact our national
prosperity, security and global influence."
5/7. Alltel announced that its audit
committee appointed Price Waterhouse Coopers
as the company's independent auditors to replace Arthur Andersen. See,
release.
CDT Files Amicus Brief in Yahoo v. LICRA Internet Speech Case
5/6. The Center for Democracy and Technology
(CDT) filed an amicus
curiae brief [45 pages in PDF] with the U.S. Court of Appeals
(9thCir) in Yahoo
v. LICRA, a case involving a French court order that Yahoo
"render impossible" access by persons in France to certain content on
servers located in the United States.
The CDT argues that "The French judgment that prompted this appeal places
our tradition of free expression in jeopardy. It represents a direct attempt by
a foreign nation to apply its law extraterritorially to restrict the freedom of
expression of U.S. based online speakers who are protected by the First
Amendment."
In 2000 two French groups, LICRA and UEJF,
obtained a judgment from a French court ordering Yahoo to "render
impossible" access by persons in France to Nazi related content on servers
located in the United States. The French court issued the following order:
"We order the Company YAHOO! Inc. to take all necessary measures to
dissuade and render impossible any access via Yahoo.com to the Nazi artifact
auction service and to any other site or service that may be construed as
constituting an apology for Nazism or a contesting of Nazi crimes."
Yahoo, which is a Delaware corporation based in San Jose, California, then filed
a complaint in U.S.
District Court (NDCal) seeking a declaratory judgment that the judgment of
the French court is unenforceable in the U.S. as contrary to the U.S.
Constitution, and in particular, the First Amendment.
The French parties have sought to evade an adverse ruling by the U.S. Courts by
raising a wide range of procedural issues, while at the same time down playing
the First Amendment issue. They filed a Rule 12(b)(2) motion to dismiss the
complaint for lack of personal jurisdiction. The District Court issued its Order Denying Motion to
Dismiss [PDF] on June 7, 2001. On November 7, 2001, the District Court
issued its Order
Granting Motion for Summary Judgment [PDF] in favor of Yahoo. The District
Court rejected the French parties' arguments regarding substantial controversy,
actual controversy, comity, forum shopping, substantial compliance with the
French order, and pre-trial discovery.
The District Court held that "What is at issue here is whether it is
consistent with the Constitution and law of the United States for another nation
to regulate speech by a United States resident within the United States on the
basis that such speech can be accessed by Internet users in that nation."
Then, with little further explanation, the District Court held that the First
Amendment precludes enforcement within the United States of a foreign court
order intended to regulate the content of speech over the Internet. The French
parties appealed to the Court of Appeals, again, focusing on precedural issues.
The CDT, along with many other speech related groups, filed the present amicus
brief in support of Yahoo. They seek to focus the Appeals Court's attention on
the First Amendment. Amici argue that "The French judgment that prompted
this appeal places our tradition of free expression in jeopardy. It represents a
direct attempt by a foreign nation to apply its law extraterritorially to
restrict the freedom of expression of U.S. based online speakers who are
protected by the First Amendment. It does so because the Plaintiff, Yahoo! ...,
has chosen the Internet as its means of communication.
Amici continue that "The French court's order is but one example of the
sort of judgment that this and other American courts can expect to see with
increasing frequency as Internet use expands throughout the world. It is a
predictable consequence of the global character of the Internet and the
conflicts that inevitably will arise concerning speech protected by the U.S.
Constitution but forbidden by repressive laws elsewhere."
Trademarks, Gripe Sites, and Free Speech
5/6. The American Civil Liberties Union
(ACLU) filed an amicus
curiae brief [33 pages PDF] with the U.S. Court of Appeals
(6thCir) in Taubman
Company v. Mishkoff. The case involves trademark, anti
cybersquatting, and First Amendment law in the context of registering domain
names that include trademarks, for the purpose of criticizing the trademarks'
holders.
The plaintiff, Taubman Company, owns shopping malls. It holds trademarks. The
defendant, Henry Mishkoff, registered domain names containing trademarks
registered by Taubman. He then published criticism of Taubman in web sites
located at these URLs. See, for example, www.taubmansucks.com.
Taubman filed a complaint in U.S. District Court (EDMich) against
Mishkoff alleging Eastern District of Michigan for trademark infringement,
unfair competition, and violation of the Anti Cybersquatting Protection Act (ACPA),
15 U.S.C. § 1125(d).
The District Court issued a preliminary injunction against Mishkoff.
On appeal, the ACLU sides with Mishkoff. It asks that the preliminary injunction
be vacated on the grounds that it constitutes a prior restraint of protected
speech in violation of the First Amendment. The ACLU argues that "there are
a growing number of cases in which trademark owners have tried to use these
remedies to stifle legitimate criticism and speech protected by the First
Amendment." The ACLU also argues that Mishkoff's actions do not constitute
infringement or a violation of the ACPA.
EU to Impose Tax on Downloaded Products
5/6. The European Commission
issued a release
in which it stated that the EU's Council of Economics and Finance Ministers will
meet on Tuesday, May 7, to impose a new tax on products that are downloaded
electronically. The rule will require U.S. companies to charge a value added tax
(VAT) on sales into the European Union (EU).
The release states that "The Council is due to adopt definitively, without
discussion, a Directive and a Regulation to modify the rules for applying value
added tax (VAT) to certain services supplied by electronic means as well as
subscription- based and pay- per- view radio and television broadcasting. The
new rules, based on Commission proposals of 7 June 2000 (see IP/00/583
and MEMO/00/31),
will create a level playing field for the taxation of digital e-commerce in
accordance with the principles on the taxation of e-commerce agreed at a 1998
OECD Ministerial Conference. The rules will ensure that when these services are
supplied for consumption within the European Union, they will be subject to EU
VAT, and that when they are supplied for consumption outside the EU, they will
be exempt from VAT. The changes modernise the existing VAT rules to accommodate
the emerging electronic business environment and to provide a clear and certain
regulatory environment for all suppliers, located within or outside the EU. The
rules also contain a number of facilitation and simplification measures aimed at
easing the compliance burden for business. Member States must implement the new
measures by 1 July 2003." (Hyperlinks added.)
People and Appointments
5/6. Lawrence Harris was named
Chief Economist of the Securities and Exchange
Commission (SEC), effective July 1. He is currently a professor at the Marshall School of Business at the University of Southern California. He will
replace Acting Chief Economist William Atkinson, who is retiring in July.
See, SEC release.
More News
5/6. The U.S.
Court of Appeals (7thCir) issued its opinion
in In
re Brand Name Prescription Drugs Litigation, a Sherman Act price
fixing case involving prescription drugs. Plaintiffs are retail sellers of
prescription drugs. The defendants/ appellees are their suppliers. The District
Court granted summary judgment to defendants. The Appeals Court affirmed.
5/6. The U.S. Court of Appeals
(9thCir) issued its opinion
[PDF] in Barcamerica
v. Tyfield Importers, a trademark case involving abandonment by
naked licensing. This is a dispute over who may use the "Leonardo Da
Vinci" trademark for wines. Barcamerica registered the mark with the USPTO.
It later sued Tyfield and others for trademark infringement. However,
Barcamerica had engaged in naked licensing of the mark. That is, it failed to
exercise adequate quality control over the licensees, with the trademark ceasing
to function as a symbol of quality and controlled source. The District Court
thus ruled that the mark had been abandoned. The Appeals Court affirmed.
5/6. Openwave and IBM announced "a 10-year alliance". See, IBM release.
Go to News Briefs from May 1-5, 2002.