|News from October 6-10, 2002|
Juster Addresses Export Controls
10/10. Kenneth Juster, Under Secretary of Commerce for Export Administration, gave a speech in Washington DC regarding export controls. Juster is head of the Commerce Department's (DOC) Bureau of Industry and Security (BIS), which was previously known as the Bureau of Export Administration (BXA).
First, he explained why the BXA changed its name to BIS. He stated that it is because it is now involved in far more than export controls. For example, he said that "We have worked with industry on the national strategies for cyber security and homeland security. And we lead the Federal government's outreach efforts to industry on critical infrastructure protection and cyber security."
Juster stated that there is "a vibrant private sector working in partnership with us to protect our security and promote our economic well being."
He stated both that the BIS is "the representative of industry in the export control process", and that it "is not simply a lobbyist for industry in the interagency process". He elaborated that "We routinely stand up for industry on issues where we believe that other agencies want to impose restrictions on exports without any corresponding national security benefit. A prime example of this is the interagency process for determining controls on the export of high performance computers. ... [and] We have worked together in the same constructive manner on efforts to lift controls on general purpose microprocessors ..."
He also stated that the BIS "played a major role in raising awareness of critical infrastructure protection issues in the private sector and with state and local governments, convening two widely publicized conferences on the subject. And we coordinated the private sector input -- including that from the high tech industry -- for the National Strategy to Secure Cyberspace, which the Administration released for public comment last month."
He also reminded his audience that "our Critical Infrastructure Assurance Office is slated for transfer to the new Department of Homeland Security."
Juster also advocated passage of S 149, the Export Administration Act of 2001, which is sponsored by Sen. Mike Enzi (R-WY).
He stated that "the statutory authority for our dual use export control system -- the Export Administration Act of 1979 -- has not been comprehensively revised or overhauled for 23 years. That is why an important priority remains the passage of a new Export Administration Act."
S 149 would ease restraints on the export of most dual use products, such as computers and software. However, it would raise penalties for violation of remaining prohibitions. It would also repeal provisions of the 1998 National Defense Authorization Act which require the President to use Million Theoretical Operations Per Second (MTOPS) to set restrictions on the export of high performance computers.
It passed the Senate Banking Committee on March 22, 2001 by a vote of 19-1. It passed the full Senate on September 6, 2001, by a vote of 85-14. On August 1, 2001, the House International Relations Committee approved HR 2581, which is also titled the "Export Administration Act of 2001", sponsored by Rep. Benjamin Gilman (R-NY), by a vote of 26-7. However, it is a much different bill.
While S 149 passed the Senate overwhelmingly, it passed before the terrorists attacks of September 11, 2001. It now faces new opposition. No action has been taken in either the House or Senate on this bill since September 11, 2001. On the other hand, Sen. Fred Thompson (R-TN), one of the leading opponents of S 149 in the Senate, is retiring. Rep. Gilman is also retiring.
Juster stated that "The legislation that currently is pending in Congress -- based on Senate bill 149 -- would update and refine the dual use export control system in a way that is good for industry. It would help exporters by providing transparency, predictability, and time limits in the export licensing process. It sets forth procedures for U.S. companies to seek to decontrol mass market items and items that are readily available from foreign sources. It thus enhances the ability of U.S. companies to compete for legitimate international sales on a fair and equal footing with their foreign competitors."
He also addressed end user visits, exports to the PR China, the transshipment countries export control initiative.
FBI Memo Lists Problems with FISA E-Mail and Cell Phone Surveillance
10/10. The Electronic Privacy Information Center (EPIC) published in its web site a copy of a Federal Bureau of Investigation (FBI) memorandum [3 pages in PDF] pertaining to problems with electronic surveillance pursuant to the Foreign Intelligence Surveillance Act (FISA). The EPIC obtained the April 21, 2000 memorandum of the FBI's Counterterrorism Division as a result of a Freedom of Information Act (FOIA) request, and a related lawsuit.
The memorandum states that "different field offices have encountered difficulties in their management of electronic surveillance and physical searches authorized under FISA." It lists as examples unauthorized interception of e-mail messages and cell phone conversations.
For example, the memorandum states that "a target's E-Mail was correctly intercepted under FISA order. When time came to renew the FISA, the field office decided to omit E-Mail coverage since the coverage was not productive. Thus, the FISA renewal order did not cover E-Mail. The field office then continued to cover the target's E-Mail even though there was not authorization for E-Mail coverage in the FISA renewal order."
As another example, the memorandum states that "a field office secured a FISA order which authorized the coverage of a target's cell phone. Unknown to the field office, some time after the FISA order, the target gave up his cell phone, and the target's cell phone number was assigned by the cell phone carrier to a new person. The new owner of the cell phone spoke a language other than the language spoken by the target of the FISA. When the language specialist listened to the FISA tape, and hear a new language, the specialist reported it to the agent working the case. Nothing was done for a substantial period of time, and timely reportedly was not made to FBIHQ. The new owner of the cell phone number was therefore the target of unauthorized electronic surveillance for a substantial period of time."
The memorandum states that "Other examples include unauthorized searches, incorrect addresses, incorrect interpretation of a FISA order and overruns of ELSUR."
Cox and Wyden Introduce Global Internet Freedom Act
10/10. On October 2, Rep. Chris Cox (R-CA) and Rep. Tom Lantos (D-CA) introduced HR 5524, the Global Internet Freedom Act, in the House. On October 10, Sen. Ron Wyden (D-OR) and Sen. Jon Kyl (R-AZ) introduced S 3093, the companion bill in the Senate. The bill creates, and authorizes funding for, a new Office of Global Internet Freedom to counter Internet jamming and blocking by repressive regimes. See, full story.
Reps. Upton and Tauzin Introduce Spectrum Reallocation Bill
10/10. Rep. Fred Upton (R-MI) and Rep. Billy Tauzin (R-LA) introduced HR 5638 [14 pages in PDF], the Commercial Spectrum Enhancement Act, a bill to facilitate the reallocation of spectrum from governmental to commercial users.
Rep. Tauzin stated in a release that "We all recognize the need to relocate federal government incumbents to comparable spectrum in order to make way for the commercial wireless industry ... But the road to relocating federal government incumbents to comparable spectrum is unpaved and filled with potholes. This legislation would pave that road, establishing procedures to ensure a timely, certain and privately -- yet fully funded -- relocation of federal incumbents to comparable spectrum."
Rep. Tauzin continued that "Earlier this year, we significantly changed spectrum auction policy by eliminating artificial deadlines that dictated when auctions had to occur. Now, with this bill, we are entering the second chapter in our spectrum management reform efforts. The bill will end the cumbersome, costly process through which government spectrum is made available for commercial use, and will replace that process with a system that is more efficient and less expensive."
The bill would amend the way the National Telecommunications and Information Administration (NTIA) reallocates spectrum from government users to commercial users, under the NTIA Organization Act.
It would provide that "Any Federal entity that operates a Federal Government station assigned to a band of frequencies specified in paragraph (2) and that incurs relocation costs because of the reallocation of frequencies from Federal use to non-Federal use is eligible for payment for such costs from the Spectrum Relocation Fund, in accordance with section 118 of this Act."
Paragraph (2) then provides that the following bands are covered: "the 216 - 220 megahertz band, 1432 - 1435 megahertz band, 1710 - 1755 megahertz band, and 2385 - 2390 megahertz band of frequencies; and ... any other band of frequencies reallocated from Federal use to non-Federal use after January 1, 2002."
The bill further provides that for an auction of reallocated spectrum to be valid, the net proceeds of the auction must recover at least "110 percent of the estimated relocation costs". The bill specifies the how the NTIA is to estimate costs.
The bill also provides that "There is established on the books of the Treasury a separate fund to be known as the ‘Spectrum Relocation Fund’ ... which shall be administered by the Office of Management and Budget ... in consultation with the NTIA."
Also, the bill requires that if an agency is required to relocate its spectrum operations, the agency must be able to achieve comparable telecommunications capability in the new band.
The bill was referred to the House Commerce Committee, which Rep. Tauzin chairs, and to the House Budget Committee. Rep. Upton, the bill's lead sponsor, is Chairman of the House Commerce Committee's Telecom Subcommittee.
The Cellular Telecommunications & Internet Association (CTIA) P/CEO Tom Wheeler praised the bill. He said in a release that "It brings certainty to federal incumbents, guaranteeing they will be fully reimbursed for their relocation expenses. It brings certainty to the wireless industry, answering critical questions: What does it cost bidders? How long will it take to access the spectrum? And, most importantly, it provides certainty to American taxpayers -- the certainty that they won't get stuck with relocation bills."
Rep. Terry Introduces Bill to Create Rural Issues Advisory Board at FCC
10/10. Rep. Lee Terry (R-NE) and others introduced HR 5602, a bill to create a Rural Issues Advisory Board within the Federal Communications Commission (FCC) to ensure that the FCC takes into account the size and resources of affected parties in rural areas.
Rep. Terry issued a release that stated that the "bill would create an unpaid five member board to issue advisory opinions on new rules proposed by the FCC, as well as regulations already in place. The four wireline and one wireless board members from rural companies would offer a small business perspective from underserved America."
Rep. Terry stated that "Telecommunications companies that serve rural America are at a competitive disadvantage because the FCC's decisions neglect or even ignore their unique needs ... This bill gives small businesses a voice within the FCC, as well as the legal recourse to get answers if their suggestions are ignored. These companies deserve that much."
The bill's initial cosponsors are Rep. Bill Luther (D-MN), Rep. John Shimkus (R-IL), and Rep. Bill Jenkins (R-TN). The bill was referred to the House Commerce Committee and the House Budget Committee.
Bills Introduced to Give Local Government More Control over Broadcast and Cellular Towers
10/10. Sen. Patrick Leahy (D-VT), Sen. James Jeffords (D-VT), and Sen. Patti Murray (D-WA) introduced S 3102, the Local Control of Broadcast Towers Act, and S 3103, the Local Control of Cellular Towers Act. Rep. Bernie Sanders (D-VT) and others introduced companion bills in the House, HR 5632 and HR 5631.
Sen. Leahy stated that "The 1996 Telecommunications Act, which I opposed, contained a provision that allowed the Federal Communications Commission to preempt the decisions of local authorities. Over the last five years, a small loophole in the 1996 Act has spurred David versus Goliath battles across the country. Small communities that pride themselves in deciding what their towns will look like, now have few options when they try to stop or even negotiate a different site for broadcast or cellular towers."
Sen. Leahy continued that "I do not want to wake up ten years from now and see my State turned into a pincushion of antennas and towers. That is why I am introducing these bills today. In a way, these bills are the culmination of a long battle with the Federal Communications Commission and in the courts to protect local authority."
"In 1997, the Federal Communications Commission seized on the legislative loophole and proposed an expansive new rule to prevent State and local zoning laws from regulating the placement of cell and broadcast towers on the basis of environmental considerations, aviation safety, or other locally-determined matters. I fought this proposed rule" said Sen. Leahy.
S 3102, which addresses broadcast towers, provides that "Notwithstanding any other provision of law, the Federal Communications Commission shall not adopt as a final rule or otherwise directly or indirectly implement any portion of the proposed rule set forth in ``Preemption of State and Local Zoning and Land Use Restrictions on Siting, Placement and Construction of Broadcast Station Transmission Facilities'', MM Docket No. 97-182, released August 19, 1997."
Moreover, the bill provides that "A State or local government may deny an application to place, construct, or modify broadcast transmission facilities on the basis that alternative technologies, delivery systems, or structures are capable of delivering broadcast signals comparable to that proposed to be delivered by such facilities in a manner that is less intrusive to the community concerned than such facilities."
Furthermore, it provides that "A State or local government may regulate the location, height, or modification of broadcast transmission facilities in order to address the effects of radio frequency interference caused by such facilities on local communities and the public."
S 3103, which addresses cell tower construction, provides that "Notwithstanding any other provision of law, the Federal Communications Commission shall not adopt as a final rule or otherwise directly or indirectly implement any portion of the proposed rule set forth in ``Procedures for Reviewing Requests for Relief From State and Local Regulation Pursuant to Section 332(c)(7)(B)(v) of the Communications Act of 1934´´, WT Docket No. 97-192, released August 25, 1997."
The bill also rewrites Section 332(c)(7) of the Communications Act of 1934. 47 U.S.C. § 332(c)(7)(B)(iv) would be removed. It provides that "No State or local government or instrumentality thereof may regulate the placement, construction, and modification of personal wireless service facilities on the basis of the environmental effects of radio frequency emissions to the extent that such facilities comply with the Commission's regulations concerning such emissions."
Instead, the bill provides that "A State or local government may deny an application to place, construct, or modify personal wireless services facilities on the basis that alternative technologies, delivery systems, or structures are capable of delivering a personal wireless services signal comparable to that proposed to be delivered by such facilities in a manner that is less intrusive to the community concerned than such facilities."
The Senate bills were referred to the Senate Commerce Committee, and the House bills were referred to the House Commerce Committee.
Commerce Secretary Evans Writes Powell Re Auction 35
10/10. Secretary of Commerce Donald Evans wrote a letter to Federal Communications Commission (FCC) Chairman Michael Powell requesting that the FCC grant relief to the winning bidders in Auction 35. This is the FCC's re-auction of spectrum previously auctioned to NextWave, and now tied up by litigation.
He wrote that "On behalf of the Administration, I would like to commend the Commission for reexamining its position on providing relief to the winning bidders of Auction No. 35. The Commission's decision is a step in the right direction toward revitalizing the Nation's telecommunications industry. In light of the current condition of the industry and the extraordinary circumstances presented by Auction No. 35, I would urge the Commission to take the next important step by granting relief to the winning bidders as swiftly as possible."
He continued that "Over the last decade, the telecommunications industry, and particularly the explosive growth of the wireless sector, brought new services to consumers, increased productivity, and helped drive our economic prosperity. More recently, mounting debt loads and constricted capital markets have slowed the industry's progress."
Evans concluded that "Quick Commission action to grant relief from Auction No. 35, however, would bring much needed stability to the wireless sector and would allow the sector to focus its resources on meeting the needs of consumers. By restoring certainty, the Commission can lay the foundation for renewed investment, innovation, and job producing growth, both in the telecommunications industry and in the economy as a whole."
On October 8 the Cellular Telecommunications and Internet Association (CTIA) submitted a comment [10 pages in PDF] to the FCC in which it argued that "the wireless telecommunications industry, along with the rest of the telecommunications industry, is currently facing a capital crisis that threatens thousands of jobs and the ability of telecommunications carriers to continue investment in new infrastructure. By allowing Auction 35 winning bidders maximum flexibility to decide whether to request voluntary dismissal of pending applications, allowing a full refund of applicable deposits and granting a full release from contingent liabilities that encumber billions of dollars of wireless assets, the Commission can inject new liquidity into the wireless telecommunications industry that will foster capital development, job creation and better service for consumers."
USTR Seeks Comments Special 301 Identifications
10/10. The Office of the U.S. Trade Representative (USTR) published a notice in the Federal Register that requests written comments from the public concerning two matters. First, the USTR requests comments regarding the acts, policies, and practices of trading partners of the U.S. that are relevant to the decision as to whether they should be identified under Section 182 of the Trade Act of 1974 (19 U.S.C. § 2242).
Section 182, which is commonly referred to as the "Special 301" provisions in the Trade Act, requires the USTR to identify countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection.
Second, the USTR requests comments on the U.S. Government's 1998 Memorandum of Understanding with Paraguay on intellectual property matters, including enforcement.
The deadline to submit comments is 12:00 NOON on Wednesday, October 30, 2002. See, Federal Register, October 10, 2002, Vol. 67, No. 197, at Pages 63186 - 63187.
FCC Declines to Approve EchoStar DirectTV Merger
10/10. The Federal Communications Commission (FCC) announced at a press conference that it has "declined to approve the transfer of licenses from EchoStar Communications Corporation and Hughes Electronics Corporation, a subsidiary of General Motors Corporation, to a new entity". EchoStar and Hughes both provide direct broadcast satellite (DBS) service via their Dish Network and DirecTV. See, FCC release [MS Word]. See, full story.
FCC Adopts Technology for Digital AM/FM Broadcasting
10/10. The Federal Communications Commission (FCC) announced, but did not release, a First Report and Order regarding digital AM/FM broadcasting. The FCC issued a press release [MS Word] in which it stated that it "selected in-band, on-channel (IBOC) as the technology" to be used by AM and FM broadcasters for digital broadcastings. This is MM Docket No. 99-325.
FCC Commissioners Kathleen Abernathy and Kevin Martin said in a joint statement [MS Word] that "We commend the work of the industry for developing a model that will not require allocation of additional spectrum and will allow for an efficient transition to digital radio, during which time consumers will be able to receive their current services without disruption."
FCC Commissioner Michael Copps wrote in his separate statement [MS Word] that "Digital radio presents a tremendous opportunity for terrestrial radio broadcasters to compete with new technologies. It holds forth the promise of better quality sound -- CD quality for FM, and FM quality for AM -- which will enhance audio service generally and may well reanimate AM radio. But that’s just for starters. Going beyond sound quality there will be multiple broadcaster opportunities in the provision of new auxiliary services, such as multiple audio programming channels, audio on demand services, and interactive features, too. All these, and perhaps more, will, I believe, enhance audio broadcasting measurably and in the process advance the public interest."
SEC Files Complaint Against Lernout & Hauspie
10/10. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (DC) against Lernout & Hauspie Speech Products N.V. alleging that it "engaged in a variety of undisclosed and deceptive transactions to inflate L&H's reported income and, consequently, the price of its stock", in violation of federal securities laws.
The complaint alleges violation of § 17(a) of the Securities Act, § 10(b) of the Exchange Act, § 13(a) of the Exchange Act, and §§ 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act.
SEC Files Another WorldCom Complaint
10/10. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (SDNY) against Betty Vinson and Troy Normand, both former accountants for WorldCom, alleging that they participated in a fraud that inflated the company's earnings at the direction and with the knowledge of WorldCom's senior management, in violation of federal securities laws.
The complaint alleges violation of the antifraud, books and records, and internal controls provisions, § 17(a) of the Securities Act of 1933, §§ 10(b) and 13(b)(5) of the Securities Exchange Act of 1934, and Rules 10b-5 and 13b2-1 thereunder. The complaint also alleges aiding and abetting WorldCom's violations of the periodic reporting, books and records, and internal controls provisions, pursuant to §§ 13(a) and 13(b)(2)(A) & (B) of the Exchange Act, and Rules 12b-20, 13a-1 and 13a-13 thereunder.
The U.S. Attorneys Office (SDNY) had previously brought criminal charges against the two. On October 10, they plead guilty to criminal charges. See, SEC release.
Movie and Music Industry Write to Universities About P2P Piracy
10/10. Leaders of several entertainment content groups wrote letters [4 pages in PDF] on October 3 to 2,300 colleges and universities complaining about peer to peer based copyright infringement.
The letters state that "We are concerned that an increasing and significant number of students are using university networks to engage in online piracy of copyrighted creative works. The educational purpose for which these networks were built is demeaned by such illegal behavior and is inconsistent with the ethical principles underlying the university community."
The letters continue that "The students and other users of your school's network who upload and download infringing copyrighted works without permission of the owners are violating Federal copyright law. ``Theft´´ is a harsh word, but that it is, pure and simple. As Deputy Assistant Attorney General John Malcolm recently stated, ``Stealing is stealing is stealing, whether it's done with sleight of hand by sticking something in a pocket or it’s done with the click of a mouse.´´ It is no different from walking into the campus bookstore and in a clandestine manner walking out with a textbook without paying for it." See, Malcolm speech of August 20, 2002.
The letters were signed by Hillary Rosen of the Recording Industry Association of America (RIAA), Jack Valenti of the Motion Picture Association of America (MPAA), Edward Murphy of the National Music Publishers' Association (NMPA), and Rick Carnes of the The Songwriters Guild of America.
See also, letters [3 pages in PDF] of October 8 to colleges and universities from David Ward of the American Council on Education, Nils Hasselmo of the Association of American Universities, David Warren of the National Association Independent Colleges and Universities, George Boggs of the American Association of Community Colleges, Constantine Curris of the American Association of State Colleges and Universities, and Peter Magrath of the National Association of State Universities and Land Grant Colleges. See also, RIAA release.
People and Appointments
10/10. President Bush announced his nomination of four persons to be judges of U.S. District Courts: Thomas Varlan (EDTenn), Cormac Carney (CDCal), Daniel Breen (WDTenn), and John Adams (NDOhio). See, White House release.
10/10. Christopher Padilla was named Assistant U.S. Trade Representative (USTR) for Intergovernmental Affairs and Public Liaison. He has previously worked for Eastman Kodak Company, Lucent Technologies, and AT&T. See, USTR release.
10/10. Margaret Greene, President of Regulatory & External Affairs at BellSouth, is the new Chair of the U.S. Telecom Association's (USTA) Board of Directors. See, BellSouth release.
10/10. The House Judiciary Committee's Subcommittee on Commercial and Administrative Law postponed its meeting to mark up HR 5429, the Satellite Services Act of 2002.
10/10. The Federal Communication Commission (FCC) published a notice in the Federal Register stating that it has postponed Auction No. 46, currently scheduled for October 30, 2002, to April 30, 2003. This is for one nationwide 5 megahertz license in the 1670 - 1675 MHz band. The FCC stated that "This postponement is necessary to provide additional time for bidder preparation and planning." See, Federal Register, October 10, 2002, Vol. 67, No. 197, at Pages 63095 - 63096. ArrayComm requested the postponement. The FCC previously announced this postponement by a public notice [PDF] on September 25, 2002.
10/10. The U.S. District Court (EDTex) held that Intel's Itanium chip infringe's patents held by Intergraph.
10/10. The House approved HJRes 114, which authorizes the use of force against Iraq, on a roll call vote of 296-133. See, Roll Call No. 455. The Senate has yet to pass the resolution. The House also passed the conference report on HR 5010, the defense appropriations bill, by a vote of 409-14. See, Roll Call No. 457. It also passed HR 5011, the military construction bill, by a vote of 419-0. See, Roll Call No. 458. However, the House and Senate have yet to pass most appropriation bills. The House passed HJRes 122, another continuing resolution to keep the government running, by a vote of 272-144. See, Roll Call No. 461. The Senate also passed it by unanimous consent.
10/10. Rep. Sander Levin (D-MI), Rep. Amo Houghton (R-NY), Rep. Earl Pomeroy (D-ND), and Rep. Karen Thurman (D-FL) introduced HR 5622, a bill to amend the Trade Act of 1974 and the Sherman Act to address foreign private and joint public private market access barriers that harm U.S. trade, and to amend the Trade Act of 1974 to address the failure of foreign governments to cooperate in the provision of information relating to certain investigations. The bill was referred to the House Ways and Means Committee and the House Judiciary Committee.
Supreme Court Hears Oral Argument Re Copyright Term Extension Act
10/9. The Supreme Court heard oral argument in Eldred v. Ashcroft (Case No. 01-618). This is a constitutional challenge to the Copyright Term Extension Act (CTEA).
The CTEA extended, retroactively, the maximum duration of copyrights from 75 to 95 years. The late Rep. Sonny Bono (R-CA) introduced HR 1621 for this purpose in 1997. However, it was the Senate version, S 505, which ultimately was passed by both the House and Senate. President Clinton signed this bill on October 21, 1998. (See, P.L. 105-298, 112 Stat. 2827. It amends 17 U.S.C. § 304(b).)
A group of law professors, representing Eric Eldred, filed a complaint in U.S. District Court (DC) alleging several grounds for overturning the CTEA. On October 27, 1999, the District Court upheld the CTEA. See, Memorandum of the Court and TLJ story. The professors and Eldred appealed. On February 16, 2001, the U.S. Court of Appeals (DCCir) issued its opinion affirming the District Court. Chief Judge Douglas Ginsburg wrote the opinion; Karen Henderson joined; and David Sentelle dissented. The Court of Appeals also denied plaintiffs' petition for rehearing en banc on July 13, 2001. Sentelle and David Tatel dissented. See, opinion.
While the plaintiffs raised many issues in the District Court, the issues before the Supreme Court are whether the Appeals Court erred in holding that Congress has the power under the Copyright Clause to extend retroactively the term of existing copyrights, and whether the CTEA is immune from challenge under the First Amendment.
See also, Berkman Center case summary and TLJ case summary.
SBC Fined $6 Million for Failing to Provide Shared Transport
10/9. The Federal Communications Commission (FCC) released a Forfeiture Order in which it fined SBC Communications (SBC) $6 Million for "violating a competition related condition that the FCC imposed when it approved the 1999 merger of SBC and Ameritech Corporation".
The order provides that "we find that [SBC] willfully and repeatedly violated one of the conditions that the Commission imposed in its order approving the merger application of [Ameritech] and SBC. Specifically, SBC failed to offer shared transport in the former Ameritech states under terms and conditions substantially similar to those that it offered in Texas as of August 27, 1999, in violation of the SBC/ Ameritech Merger Order." (Footnotes omitted.)
FCC Chairman Michael Powell stated that the order is "the highest in the history" of the FCC, and "a further demonstration of our commitment and resolve to ensure effective enforcement in this area."
Powell elaborated that "After reviewing the merger of SBC and Ameritech, the Commission adopted a set of conditions and incorporated them in its order approving the license transfers. The conditions became the law. SBC then went out and broke the law in five different states by failing to provide shared transport to its competitors. Such unlawful, anti- competitive behavior is unacceptable. Instead of sharing, as the law requires, SBC withheld and litigated, forcing competitors to expend valuable time and resources to exercise their rights under the FCC's order." See, Powell statement.
This is EB-01-IH-0030. See also, FCC release.
FCC and AT&T Enter Into E911 Consent Decree
10/9. The Federal Communications Commission (FCC) released an Order which adopts a consent decree which resolves possible violations of the E911 Phase II rules by AT&T Wireless Services on its GSM network.
The FCC stated that AT&T "has committed to a timeline for deployment of its network based location technology within its Global System for Mobile Communications/ General Packet Radio Service network (GSM network)." The decree sets forth a timetable for deployment of cell sites on AT&T's GSM network. The decree also provides a schedule under which AT&T will provide Phase II service for Public Safety Answering Points (PSAPs) that have filed valid requests for Phase II service. In addition, the decree provides that AT&T "agrees to make a voluntary contribution to the United States Treasury in the amount of Two Million Dollars ($2,000,000)".
FCC Chairman Michael Powell stated that "In addition to a very specific deployment plan for its network, AT&T has agreed to make a voluntary $2 million contribution to the Treasury -- the highest E911 related payment ever. Phase II E-911 deployment has vexed equipment vendors and carriers alike. Nonetheless, national GSM carriers committed to very specific compliance plans -- plans they have been unable to achieve. Consistent with our rules, the Commission is committed to achieving E-911 Phase II as rapidly as possible. This enforcement action takes a critical step by imposing a substantial cost for the delay and putting in place the first comprehensive deployment plan for a national GSM carrier." See, Powell statement.
This is EB-02-TS-018. See also, FCC release.
People and Appointments
10/9. Paul Nagle joined the Federal Communications Commission's (FCC) Office of Legislative Affairs (OLA) as an Attorney Advisor. The FCC stated in a release [PDF] that "he will focus primarily on broadband network infrastructure and related peripherals issues". He previously worked for the law firm of Wilkinson Barker & Knauer.
10/9. The Federal Communications Commission's (FCC) Media Bureau released two research papers which pertain to its cable ownership rulemaking proceeding, and to its AT&T Comcast merger review. The papers are titled "Asymmetric Bargaining Power and Pivotal Buyers" [PDF] and "Most Favored Customers in the Cable Industry" [PDF]. Both were written by Nodir Adilov of Cornell University and Peter Alexander of the FCC's Media Bureau. The FCC stated in a release [PDF] that these two papers "are not part of the Media Ownership Working Group studies that were recently released and incorporated into the third Biennial Regulatory Review of Broadcast Ownership Rules proceeding." It also stated that the papers "represent the individual views of their authors and do not necessarily reflect the views of the FCC, any FCC Commissioners, or other staff." The FCC released 12 studies of the current media marketplace on October 1.
10/9. The Federal Trade Commission (FTC) is holding a three day public workshop to "explore how certain state regulations and private business practices may be having significantly anticompetitive effects on e-commerce". The series began on Tuesday, October 8, and finishes on Thursday, October 10. See, list of speakers, with links to prepared statements.
10/9. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection held a hearing titled "Telecommunications and Trade Promotion Authority: Meaningful Market Access Goals for Telecommunications Services in International Trade Agreements". See, opening statement of Rep. Cliff Stearns (R-FL), Chairman of the Subcommittee. See also, prepared testimony of Leonard Waverman (London Business School), prepared testimony of Larry Darby (Darby Associates), prepared testimony of Scott Harris (Harris Wiltshire & Grannis), prepared testimony of Gregory Sidak (American Enterprise Institute), and prepared testimony of Florizell Liser (Assistant USTR for Industry and Telecommunications).
10/8. Yesterday's issue of the TLJ Daily E-Mail Alert (No. 525, October 7, 2002) included a story titled "House Votes to Delay Webcasting Rule for Six Months". The story stated that the House passed HR 5469, the Small Webcaster Amendments Act of 2002, by a voice vote. The story also incorrectly stated that the House passed the bill as introduced on September 26. In fact, the House passed a manager's amendment to the bill that is significantly different from the original version. The original bill simply provided for a six month extension of the effective date of the Librarian of Congress's webcasting rule. The bill as passed, among other things, establishes royalty rates for small webcasters.
House Passes Small Webcaster Amendments Act of 2002
10/8. The House approved a manager's amendment to HR 5469, the Small Webcaster Amendments Act of 2002, by a voice vote, on October 7.
Rep. James Sensenbrenner (R-WI), the Chairman of the House Judiciary Committee, spoke in the House during the debate on the bill. He is also the sponsor of the bill. The version of the bill that passed the house was his "manager's amendment".
Rep. Sensenbrenner explained the developments that led up to his manager's amendment. He stated that "the 1995 Digital Performance Right and Sound Recording Act that created a performance right in sound recordings for digital transmissions did not specifically address the issue of webcasting or Internet radio broadcasts. As a result, the 1998 Digital Millennium Copyright Act contains provisions that authorize eligible webcasters to accept a compulsory license, thereby enabling them to operate over the Internet without negotiating licenses in the marketplace. A compulsory license essential allows an individual or entity to use copyrighted works like music and movies at an industry negotiated or government mandated rate."
Rep. Sensenbrenner said that "Because webcasters and members of the recording industry could not agree to a rate, a statutorily authorized arbitration panel, called a CARP, was convened at the U.S. Copyright Office to determine what the rate would be. The arbitrators issued a decision on February 20, 2002. The copyright holders in the recording industry thought that the rate was too low, and the webcasters thought that the rate was too high."
He continued that "the Librarian of Congress, based upon a recommendation by the Register of Copyrights, decided on June 8 to reject the suggestions of the webcasting CARP. On June 20, he issued a final decision which lowered the rate further. Some webcasters believe that the rate is still excessive. The copyright holders maintain that this lower rate is even less reflective of a fair market standard. That decision is now on appeal" to the U.S. Court of Appeals (DCCir).
On June 20, 2002, the Librarian of Congress issued his final rule providing the terms for the statutory license for eligible nonsubscription services to perform sound recordings publicly by means of digital audio transmissions, also known as webcasting, pursuant to 17 U.S.C. § 114, and to make ephemeral recordings of sound recordings for use of sound recordings under the statutory license set forth in 17 U.S.C. § 112.
The Librarian also released a summary stating that he "accepted the recommendation of the Register of Copyrights and rejected the rates and terms recommended by a Copyright Arbitration Royalty Panel (CARP) ... The most significant difference between the CARP's determination and the Librarian's decision is that the Librarian has abandoned the CARP's two tiered rate structure of 0.14¢ per performance for ``Internet only´´ transmissions and 0.07¢ for each retransmission of a performance in an AM/FM radio broadcast, and has decided that the rate of 0.07¢ will apply to both types of transmission."
Rep. Sensenbrenner also stated that "Although a resolution to this dispute is legally in play, implementation of the decision by the Librarian takes effect on October 20 and is retroactive to 1998. Unless Congress acts, some webcasters will shut down. This explains the point of H.R. 5469 as originally drafted: to suspend the implementation of the Librarian's decision for 6 months, effective October 20. This delay would ensure that all parties would receive all of the judicial process to which they are entitled under the law before the rate took effect."
He also explained his legislative strategy: "I am happy to report that introduction of this bill placed a burr under the saddle of both the copyright holders and the small webcasters to conclude negotiations on these matters that began last summer. Since last week, the parties have negotiated around the clock. They have now arrived at a deal that sets new rates and payment terms that will obviate the need for further legal and administrative intervention. The manager's amendment simply codifies the terms of that deal." Rep. Sensenbrenner's statement is at Congressional Record, October 7, 2002, pages H7046-7.
Rep. Howard Berman (D-CA), the ranking Democrat on the House Courts, Internet and Intellectual Property Subcommittee, spoke in favor of the manager's amendment. He explained that "The terms of the deal are somewhat complicated, but the basic provisions are this. Small webcasters pay webcasting royalties that equal 8 percent of their gross revenues for the years 1998 through 2002, or a statutory minimum, whichever is greater. In 2003 and 2004, small webcasters will pay the greater of 10 percent of their gross revenues under $250,000 and 12 percent of their gross revenues over $250,000, or 7 percent of expenses."
Rep. Berman added that "The criteria for eligibility as a small webcaster are reasonable and allow such webcasters to grow and yet still obtain the royalty discount provided by the legislation. A webcaster will be eligible for the discounted royalty rate for the past 4 years if it had less than $1 million in gross revenues over those four years. A webcaster will be eligible in the year 2003 if it has gross revenues under $500,000 for that calendar year and in 2004 if it has gross revenues under $1.25 million." His statement is at Congressional Record, October 7, 2002, page H7047.
He concluded that "this legislation provides small webcasters with much better terms than the webcasting rates set by the Librarian of Congress. As such, it addresses the concerns that the Librarian's rate might drive many small webcasters out of business."
The manager's amendment also provides for the direct payment to artists of royalties for digital performance of sound recordings. It also requires the Register of Copyrights and the Comptroller General to prepare a report for the Congress on small webcasters by June 1, 2004.
Rep. John Conyers (D-MI), the ranking Democrat on the Judiciary Committee, and Rep. Karen McCarthy (D-MO), also spoke in favor of the bill. It then passed by a voice vote.
Deputy Treasury Secretary Addresses FSC/ETI and WTO Rulings
10/8. Kenneth Dam, Deputy Secretary of the Treasury, gave a speech titled "Current WTO Induced Issues in U.S. Taxation of International Business" at a Washington DC luncheon. He said the American international tax rules no longer serve the national interest, and cited as an example the problems created for American businesses by the World Trade Organization's (WTO) recent rulings that both the Foreign Sales Corporation (FSC) and Extraterritorial Income Exclusion (ETI) tax regimes are illegal.
He offered a gloomy short term outlook for American exporters. He said that "The chances of going back to a FSC look alike law are nil." Moreover, he said that "it will not be possible to replicate for each and every American company the tax relief they obtained under FSC or ETI. Nor can we assure each and every American company that it will receive any tax relief at all from the tax legislation now being considered in Congress."
He said that instead "We need to focus on making the U.S. economy -- and that means U.S. enterprises as a whole -- better off as a result of the legislative changes." However, he did not say what such a future tax regime should be, or when it might be enacted.
The WTO has held that both of the FSC and ETI tax regimes constitute illegal trade subsidies. On August 30 the WTO released a Decision of the Arbitrator [46 pages in PDF] that authorizes the EU to impose $4 Billion in countermeasures, or retaliatory tariffs. On September 13 the European Union published a document [14 pages in PDF] that lists thousands of product category numbers that identify products that may be subject to retaliatory tariffs. It includes many tech products. Moreover, tech companies that export software and equipment have been leading beneficiaries of the FSC and ETI tax regimes.
Dam (at right) stated that "The sad truth is that our international tax rules no longer serve our national interest. In this age of globalization, international transactions generate a large and growing share of our national income. Yet changes to the international provisions of the U.S. corporate tax code in recent decades have ignored this trend, and have oftentimes more impaired than improved American companies' ability to compete abroad. More often, changes to the tax code have focused on increasing tax revenues rather than assuring the competitiveness of U.S. business operations, and thus, assuring the health of our economy."
Dam said that the WTO rulings "say that any attempt to replicate the benefits of FSC or ETI is legally doomed. To make such an attempt would simply lead to fruitless WTO litigation and could well bring on a trade war with the European Union, which would almost certainly insist on retaliating against U.S. exports." He also reiterated that "President Bush decided several months ago that the United States would comply with the WTO ruling".
Dam said that "we need to revisit the U.S. tax rules for foreign earned income. These rules have not kept pace with the rules of our major trading partners." He added that "with today's global economy, the bottom line is clear. If we want U.S. businesses, and thus the U.S. economy, to be competitive in international transactions, then we have to reconsider our international tax rules."
Commerce Department Official Addresses Regional Technology Development
10/8. Chris Israel, Deputy Assistant Secretary for Technology Policy at the Commerce Department, gave a speech to the Rural Telecommunications Congress in Des Moines, Iowa in which he addressed the benefits of technology, the role of technology in regional competitiveness, policies that can promote regional technology development, and broadband demand.
Technology, which Israel said includes everything from "information technology to biotechnology to nanotechnology", is "critical to our nation for many reasons".
He said that it provides "sustainable economic expansion -- creating high wage jobs, world class exports and productivity growth so critical to our long term global competitiveness." It provides innovations that "improve our quality of life". It is also "protect[s] our homeland, hardening our infrastructure, detecting dangers and empowering our defenders."
Israel next stated that technology "is also essential to improving the quality of life and standard of living at the state and local level." Moreover, "State and regional public policies directly impact the pace of economic growth, high wage job creation, and global investment. Decisions made at the local level play a critical role in establishing the environment needed to let innovators innovate and entrepreneurs create jobs, companies, and community wealth."
He listed many things that state and local governments can do, including "Supporting research excellence, at universities, federal labs and industry; protecting intellectual property rights and encouraging technology transfer; providing a certain and navigable regulatory framework that prioritizes innovation; and encouraging linkages and consortia between knowledge creators and commercializers". He also listed "pursuing tax policies that encourage investment and risk capital; supporting trade inside and outside the cluster, encouraging entrepreneurship education at all levels". In addition, he listed improving infrastructure, "such as community transportation systems, energy generation and transmission infrastructure, and zoning and real estate laws".
Finally, Israel stated that "the telecommunications infrastructure is particularly critical in the information age, with broadband networks holding a key to enterprise efficiency and cross cluster productivity". He then offered a range of state and local policy decisions that can impact broadband deployment.
These recommendations were treated in more detail in a report [25 pages in PDF] written by the Office of Technology Policy, titled "Understanding Broadband Demand: A Review of Critical Issues". It was released last month.
Israel emphasized that state and local governments should "Prioritize bandwidth when considering issues such as rights of way, taxes and application fees, tower siting, zoning, building and construction codes, building access, franchise agreements, historic preservation and environmental protections". They also "should consider ways to aggregate demand to create incentives for carrier deployment".
Finally, Israel touted some of the actions that the Bush administration has taken to promote technology.
ATP Announces Awards for 2002
10/8. The National Institute of Standards and Technology's (NIST) Advanced Technology Program (ATP) announced over $100 Million in awards, many of which pertain to computing and communications. The ATP is funding projects pertaining to photovoltaic silicon wafers, fuel cells on a chip for handheld devices, printed organic transistors on plastic for electronic displays and circuits, optical switches for routing data traffic, image compression, nanophotonic circuits integrated on semiconductor wafers, XML encryption, and other storage and nano technologies. See, ATP release.
10/8. The Federal Communications Commission (FCC) published a notice in the Federal Register regarding whether it should revise, clarify or adopt any additional rules in order to more effectively carry out Congress's directives in the Telephone Consumer Protection Act of 1991 (TCPA). The notice states that "New technologies have emerged that allow telemarketers to better target potential customers and make it more cost effective to market using telephones and facsimile machines. These new telemarketing techniques have also increased public concern about the effect on consumer privacy. Therefore, we seek comment on whether to revise or clarify our rules governing unwanted telephone solicitations and the use of automatic dialing systems, prerecorded or artificial voice messages, and telephone facsimile machines." It adds that "Such calls may also be disruptive to the increasing number of individuals who now work from home by tying up telephone lines or disconnecting telecommuters from the Internet." Comments are due November 22, 2002. Reply comments are due December 9, 2002. See, Federal Register, October 8, 2002, Vol. 67, No. 195, at Pages 62667 - 62681.
10/8. The Senate Judiciary Committee held over consideration of S 2541, the Identity Theft Penalty Enhancement Act of 2002, sponsored Sen. Dianne Feinstein (D-CA). It had been on the agenda for the Committee's October 8 business meeting. All bills on the agenda were held over. This was likely the Committee's last business meeting to the 107th Congress.
10/8. The Supreme Court heard oral argument in FCC v. Nextwave, Case No. 01-653, and Arctic Slope Corp. v. Nextwave, Case No. 01-657.
Markle Report Offers Recommendations on Homeland Security Information Issues
10/7. The Markle Foundation released a report titled "Protecting America's Freedom in the Information Age". It makes recommendations regarding the collection, analyzing and use of intelligence and information for homeland security purposes.
It recommends that the soon to be created Department of Homeland Security (DHS), rather than the existing Federal Bureau of Investigation (FBI), should be tasked with taking "the lead in collecting information that is publicly available or voluntarily obtained and in analyzing domestic information and intelligence from all sources and setting overall priorities for new collection efforts". The report recommends leaving the FBI with responsibility for "managing clandestine collection operations, like FISA wiretaps or the recruitment of undercover agents".
The report elaborates that the Department of Justice (DOJ) and the FBI "should be the lead agencies for law enforcement, exercising the power to investigate crimes, charge people with crimes, perhaps take away their liberty, and prepare cases for trial and appeal. The DHS should be the lead agency for shaping domestic intelligence products to inform policymakers, especially on the analytical side, so that there is some separation between the attitudes and priorities of intelligence analysis and the different, more concentrated, focus of law enforcement personnel authorized to use force on the street to make arrests and pursue or detain citizens."
The report further makes detailed recommendations regarding the structure of the information system. It should not be a centralized, Washington DC based, mainframe system. Rather, it should be a decentralized network with no central hub.
The report states that "America will make a mistake, however, if we create a centralized, ``mainframe´´ information architecture in Washington, D.C., rather than the networked, decentralized system that is needed to defeat the challenge of decentralized, sometimes networked adversaries. The problem is not just information sharing among federal agencies in Washington, D.C. Most of the people, information, and action will be in the field -- in regional or local federal offices, in state, regional, and local governments, and in private firms. The federal approach and guidelines can inform and support these local efforts, but information needs to be available widely and should not be required to flow through a central hub."
The report elaborates that "Local participants must be empowered to contribute, access, use, and analyze data."
The report also identifies several technologies. It states that "appropriate data sharing technologies such as XML must be identified and evaluated for applicability; decentralized and comprehensive directories will be required to ensure that individual participants can identify and access information; querying systems must be developed and maintained; network traffic and usage must be tracked and analyzed".
Also, "the federal government must build an operating system".
The report further states that while the federal government is spending much money to improve the information technology of individual agencies, "almost none of this money is being spent to solve the problem of how to share this information and intelligence among those federal agencies."
See, Part I [46 pages in PDF], which contains the table of content, overview, and report. See also, Part II [PDF], which contains working group analyses, and Part III [PDF], which contains background papers. See also, full report [1MB in PDF].
Who wrote the report? It states that it is "A Project of The Markle Foundation ... In Alliance with" the Miller Center for Public Affairs, the Brookings Institution, and the Center for Strategic and International Studies. The Markle Foundation is co-chaired by Zoe Baird and James Barksdale.
House Passes Federal Agency Privacy Bill
10/7. The House passed HR 4561, the Federal Agency Protection of Privacy Act, by a voice vote. The bill, which is sponsored by Rep. Bob Barr (R-GA), would require that rules noticed for public comment by federal agencies must be accompanied by an initial assessment of the rule's impact on personal privacy interests.
Sen. Max Cleland (D-GA) introduced S 2492, the companion bill in the Senate, on May 9, 2002. However, the Senate has taken no action on the bill.
Greenspan Addresses Importance of Computing, Databases and Data Mining to Banking System
10/7. Federal Reserve Board Chairman Alan Greenspan gave a speech via satellite to the annual convention of the American Bankers Association in Phoenix, Arizona. He stated that one of the reasons for the relative health of the U.S. banking system despite the recent recession is that new computing and communications technologies have facilitated the creation of new and complex financial instruments that made it easier for banks to hedge risks. He also advised that banks should now take advantage of decreased costs of storage and computing to collect, data mine, and analyze default and loss data from the recent and previous recessions in order to further improve risk management practices.
He spoke about "the apparent incongruity between the recent substantial losses on corporate credits and the continued strength of the U.S. banking system." He said that "the U.S. financial system has suffered a sharp run-up in corporate bond defaults, business failures, and investor losses. At commercial banks, troubled loans -- including charge offs, classified loans, and delinquent credits -- have also climbed to quite high levels. At the same time, banks in this country remain quite healthy ..."
"Why is this?", he asked. He answered by pointing out that the recent recession was "less severe" than prior recessions, that consumers have "maintained their expenditures", and that "Consumer and mortgage loans have not suffered the sharp run-up in delinquencies that loans in the business sector have". He also said that it is significant that "banks had impressive earnings and balance sheets going into the current period of stress".
However, he also pointed out that computer and telecommunications technologies played a role. He said that the resiliency of the U.S. banking system resulted in part from "the new techniques in risk management that have been applied in banking during the past few years". This includes the use of new financial instruments, such as "credit default swaps and collateralized debt obligations".
He said that "Conceptual advances in pricing options and other complex financial products, along with improvements in computer and telecommunications technologies, have significantly lowered the costs of, and expanded the opportunities for, hedging risks that were not readily deflected in earlier decades. Moreover, the counterparty credit risk associated with the use of derivative instruments has been mitigated by legally enforceable netting and through the growing use of collateral agreements. These increasingly complex financial instruments have been especial contributors, particularly over the past couple of stressful years, to the development of a far more flexible, efficient, and resilient financial system than existed just a quarter century ago."
Finally, Greenspan said that "Large losses have been taken, and more are yet to be recognized." Yet, this also provides an opportunity. He said that the "most recent credit cycle has created an abundant supply of exactly the kind of critical information that banks will need to improve their risk management".
So, he advised that "Now is the time to collect and maintain these default and loss data in a disciplined and uniform fashion. Most banks missed that opportunity in the early 1990s, and some are going back at great cost to mine these data today. A decade ago, one might have been excused from undertaking such data collection efforts because of the technology then existing and the cost of data storage. These reasons are no longer justified. Further, the collection of data on defaulting credits, both from past cycles and on a continuing basis, is required to link internal default and loss estimates with the minimum regulatory requirements under the new Basel Capital Accord now being developed for the large internationally active banks."
He specifically addressed the importance of improving credit scoring models, and "continually updating the database on which the model operates", such as through "longer and larger database[s]".
SEC Files Complaint Against Ex WorldCom Accountant
10/7. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (SDNY) against Buford Yates alleging violation of federal securities laws in connection with fraudulent financial statements by WorldCom. See, SEC release.
Until August 2002, Yates was Director of General Accounting at WorldCom, which has already stated that it overstated the income it reported in its financial statements by over $7 Billion. The complaint alleges that "Defendant YATES knew, or was reckless in not knowing, that these accounting entries were made without supporting documentation, were not in conformity with GAAP, were not disclosed to the investing public."
The complaint alleges fraud, books and records and internal controls violations, and reporting violations. Specifically, the complaint contains four counts alleging violation of § 10(b) of the Exchange Act and Rule 10b-5 thereunder, § 17(a) of the Securities Act, § 13(b)(5) of Exchange Act and Rule 13b2-1 thereunder, §§ 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and § 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder.
Also on October 7, Yates plead guilty in U.S. District Court (SDNY) to related criminal charges.
SEC Brings Insider Trading Case Against Software Exec
10/7. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (NDIll) against Terry Kirch alleging insider trading.
The complaint states that Kirch was the CEO of a private software company that belonged to an executive roundtable. The executives met with the understanding that information exchanged was confidential. At one conference the CEO of another member, ShowCase Corporation, stated that his company would not meet analysts' projections for the second quarter. Kirch then sold shares of ShowCase, thereby avoiding a loss of about $45,688. The complaint alleges violations of § 10(b) of the Exchange Act and § 17(a) of the Securities Act.
The SEC seeks an injunction, disgorgement, interest, and a civil penalty. See, SEC release.
10/7. The Department of Justice (DOJ) stated in a release that Charles James, Assistant Attorney General for the Antitrust Division, wrote a letter to a consortium proposing to offer free electronic tax services. The release stated that the consortium "should pose no threat to competition in the market for providing tax services to individuals".
10/7. The Supreme Court is back from its summer recess, which it began on June 28, 2002.
10/7. Rep. Chris Cox (R-CA) introduced HJRes 116, a joint resolution to recognize the rights of consumers to use copyright protected works. It was referred to the House Judiciary Committee and the House Commerce Committee.
10/7. Sen. Bill Nelson (D-FL) introduced S 3064, the Health Records Confidentiality Act of 2002. It was referred to the Senate Health, Education, Labor, and Pensions Committee. Sen. Nelson stated that "Under my legislation, pharmacies, insurance companies and other health entities would be prohibited from using private, personally identifiable health information to provide marketing services to any entity without providing notice to the consumer about its disclosure practices and obtaining the consumer's express written consent. The legislation makes an exception for treatment communications unless the covered entity receives direct or indirect remuneration from a third party for making the communication. The free flow of information is important when sought by the consumer, but treatment communications tarnished by the marketing dollars of third parties create an inherent conflict of interest by encouraging patients, who don't know their pharmacist has been paid, to purchase high cost alternative drugs that are not necessarily more effective than those prescribed by their doctor." See, Cong. Record, October 7, 2002, at S10046.
Go to News from October 1-5, 2002.