News from January 16-20, 2003

People and Appointments

1/20. Pete Yost of the Associated Press wrote a story about Nancy Victory (at right), head of the National Telecommunications and Information Administration (NTIA), which states that she "allowed wireless phone company lobbyists to help pay for a private reception at her home, and then 10 days later urged a policy change that benefited their industry". See, story in Newsday. The story has also been carried by the Wall Street Journal Online (but access to the story requires subscription).

1/20. David Barron was named Assistant VP Federal Relations / National Security in BellSouth's Washington DC, Governmental Affairs office.

Sen. Allen Introduces Bill to Create Technology Grant Program for MSIs

1/17. Sen. George Allen (R-VA) introduced S 196, the Digital & Wireless Network Technology Program Act of 2003, a bill to create a technology grant program for minority serving institutions (MSIs) at the National Science Foundation (NSF).

The bill would create a new office at the NSF named the Office of Digital and Wireless Network Technology (ODWNT). The bill would also authorize the appropriation of $250,000,000 for each of the fiscal years 2004 through 2008 for grants to be administered by this new office, to provide instruction in digital and wireless network technologies.

The institutions eligible for grants would include "a historically Black college or university", "a Hispanic-serving institution", and "a tribally controlled college or university".

Grants could be used "to acquire the equipment, instrumentation, networking capability, hardware and software, digital network technology, wireless technology, and infrastructure". It could also be used "to develop and provide educational services, including faculty development, to prepare students or faculty ...". It could also be used to provide teacher training, and to "implement joint projects and consortia to provide education regarding technology".

This bill is similar to S 414 (107th Congress). That bill was sponsored by former Sen. Max Cleland (D-GA), and cosponsored by Sen. Allen and others. It was approved by the Senate Commerce Committee on May 17, 2002. The Committee amended, approved and reported the bill, without debate or discussion, by unanimous consent motion. Its companion bill in the House was HR 1034 (107th).

S 414 (107th) differs from S 196 (108th) in several respects. In particular, S 414 would have given grant making authority to the National Telecommunications and Information Administration (NTIA).

Sen. George AllenSen. Allen (at right) stated that "Our legislation establishes a new grant program within the National Science Foundation, NSF, that provides up to $250 million to help Historically Black Colleges and Universities, Hispanic Serving Institutions, and Tribal Colleges bridge the digital divide." See, Cong. Record, Jan. 17, 2003, at S1151-2.

He elaborated that "The legislation allows eligible institutions the opportunity through grants, contracts or cooperative agreements to acquire equipment, instrumentation, networking capability, hardware and software, digital network technology and wireless technology/ infrastructure, such as wireless fidelity or WiFi, to develop and provide educational services. Additionally, the grants could be used for such activities as equipment upgrades, technology training and hardware/ software acquisition. A Minority Serving Institution also could use the funds to offer its students universal access to campus networks, dramatically increase their connectivity rates, or make necessary infrastructure improvements."

The bill's original cosponsors are Sen. John McCain (R-AZ), Sen. Ted Stevens (R-AK), Sen. Ernest Hollings (D-SC), and Sen. Zell Miller (D-GA).

Tech Crime Report

1/17. The Sedgwick County (Kansas) Sheriff's Department arrested Kenneth Fetterman for marijuana possession. Back on March 8, 2001, a grand jury of the U.S. District Court (EDCal) returned an indictment against Fetterman and two others alleging that they participated in a scheme to fraudulently bid in hundreds of art auctions on the Internet auction web site eBay. Fetterman was identified as a wanted fugitive through his fingerprints. See, USAO release [PDF].

People and Appointments

1/17. The Senate Governmental Affairs Committee held a hearing on the nomination of Tom Ridge to be Secretary of Homeland Security. The Committee approved the nomination. The full Senate could approve the nomination as early as Tuesday, January 21. See also, prepared statement of Ridge, and prepared statement of Sen. Joe Lieberman (D-CT), the ranking Democrat on the Committee.

More News

1/17. The Federal Trade Commission (FTC) published a notice in the Federal Register in which it stated that "it intends to request public comments on the rule, guides, and statements of policy" on a number of topics, including the Fair Credit Reporting Act (FCRA). See, Notice of Intent To Request Public Comments in the Federal Register, January 17, 2003, Vol. 68, No. 12, at Page 2465.

Sen. Feingold Introduces Data Mining Moratorium Bill

1/16. Sen. Russ Feingold (D-WI) introduced S 188, the Data-Mining Moratorium Act of 2003, a bill that would require the Department of Defense and the Department of Homeland Security to suspend the development of data mining systems.

The bill states in its findings that "There has been no demonstration that data-mining by a government, including data-mining such as that which is to occur under the Total Information Awareness program, is an effective tool for preventing terrorism."

The bill provides that until "there is enacted a law specifically authorizing data-mining", "no officer or employee of the Department of Defense or the Department of Homeland Security may take any action to implement or carry out for data-mining purposes any part of (including any research or development under) (1) the Department of Defense component of the Total Information Awareness program or any other data-mining program of the Department of Defense; or (2) any data-mining program of the Department of Homeland Security that is similar or related to the Total Information Awareness program."

Sen. Feingold stated in the Senate that "Without Congressional review and oversight, data mining would allow the Department of Homeland Security, the Department of Defense and other government agencies to collect and analyze a combination of intelligence data and personal information like individuals' traffic violations, credit card purchases, travel records, medical records, communications records, and virtually any information collected on commercial or public databases. Through comprehensive data-mining, as envisioned with Total Information Awareness, everything from people's video rentals or drugstore purchases made with a credit card to their most private health concerns could be fed into a computer and monitored by the Federal Government." See, Cong. Record, Jan. 16, 2003, at S1079-80.

Sen Feingold added that "There is no evidence that data mining will, in fact, prevent terrorism. And when one considers the potential for errors in data, for example, credit agencies that have data about John R. Smith on John D. Smith's credit report, the prospect of ensnaring many innocents is real. This approach might also lead to the same kinds of so-called ``preventive´´ detentions that are unconstitutional and put more than 1,100 individuals in jail after September 11."

Sen. Feingold also stated that "The Administration's assurances that a data-mining system will not abuse our privacy rights ring hollow, particularly to those of us who questioned the breathtaking new Federal powers in the USA PATRIOT Act."

Sen. Ron Wyden (D-OR), a cosponsor of the bill, also spoke in support of the bill in the Senate. He said that "My concern is the program that has been developed by Mr. Poindexter is going forward without congressional oversight and without clear accountability and guidelines. That is why I think it is important for the Senate, as we reflect on the need to fight terrorism while balancing the need to protect the rights of our citizens, to emphasize how important it is a program such as this be subject to congressional oversight and that there be clear accountability." See, Cong. Record, Jan. 16, 2003, at S319-20.

Sen. Wyden said that "We need to make sure there are guidelines and rules so that there has to be, for example, evidence there is activity that could threaten the country before additional intrusive steps are taken and, second, that there are safeguards in place at a time when it is possible, because of modern technology and new databases, to share information very quickly."

Tom Ridge, President Bush's nominee to be Secretary of Homeland Security, testified before the Senate Governmental Affairs Committee on January 17. He said in his prepared statement that "Before any new homeland security technologies are deployed, we will ensure that we are upholding the laws of the land. Any new data mining techniques or programs to enhance information sharing and collecting must and will respect the civil rights and civil liberties guaranteed to the American people under the Constitution. Furthermore, as we go about developing new technologies and programs to strengthen our homeland, treating citizens differently on the basis of religion or ethnicity will not be tolerated."

Sen. Jon Corzine (D-NJ) and Sen. Bill Nelson (D-FL) are also original cosponsors of the bill. See also, Feingold release.

Sen. Corzine Introduces Bill to Prohibit Use of Cell Phones While Driving

1/16. Sen. Jon Corzine (D-NJ) introduced S 179, the Mobile Telephone Driving Safety Act of 2003, a bill to prohibit the use of mobile telephones while operating a motor vehicle.

The bill would withhold a proportion of federal funds appropriated for the states from any state that does not enact legislation "that prohibits an individual from using a mobile telephone ... while operating a motor vehicle, except in the case of an emergency or other exceptional circumstance ..."

Sen. Corzine stated in the Senate that "I am introducing this legislation because of the significant threat posed by people who use cell phones while driving. According to a study by the Harvard Center for Risk Analysis released in December of 2002, ``the use of cell phones by drivers may result in approximately 2,600 deaths, 330,000 moderate to critical injuries and 1.5 million instances of property damage in America per year´´." See, Cong. Record, Jan. 16, 2003, at S1072-3.

Sen. Edwards Introduces Federal Cyber Security Bill

1/16. Sen. John Edwards (D-NC) introduced S 187, the National Cyber Security Leadership Act of 2003, a bill pertaining to federal government cyber security.

Sen. John EdwardsSen. Edwards (at right) stated that this bill would "establish higher standards for Federal Government computer safety. The National Institute of Standards and Technology would establish the standards after individual agencies conduct comprehensive tests of their network systems and report on their weaknesses. These procedures will strengthen our government's resistance to cyber attacks and will demonstrate to the business community the tremendous value in conducting comprehensive security tests and monitoring new developments." See, Cong. Record, Jan. 16, 2003, at S1079.

He also elaborated on the need for the bill. He said that "I introduce this bill because our Nation's computers and networks are increasingly vulnerable to cyber attacks." He then discussed the Nimda and Code Red attacks.

He then added that "According to cyber security experts, Federal computers have already been used as weapons in large scale cyber attack. There aren't just amateur teenage hackers. Terrorists, including al Qaeda operatives, have browsed Internet sites offering software that would help them take down power, water, transport and communications grids."

Finally, he stated that "One of the principal reasons that companies do not act to secure their systems is that the Federal Government does not act to secure its own systems. Unfortunately, Federal agencies continue to be among the worst offenders failing to protect themselves against cyber attack."

The bill was referred to the Senate Governmental Affairs Committee.

WTO Appellate Body Holds Byrd Amendment Inconsistent With WTO Agreements

1/16. The World Trade Organization (WTO) Appellate Body released its report upholding a WTO Panel's finding that the US Continued Dumping and Subsidy Offset Act of 2000, which is also known as the CDSOA or the Byrd Amendment, is inconsistent with certain provisions of the WTO agreements on anti-dumping and on subsidies because it is a specific action against dumping or a subsidy. See, 119 page report in MS Word (442 KB) or PDF (289 KB).

The Appellate Body reversed the Panel's finding that the Byrd Amendment is inconsistent with other WTO provisions relating to the support required for initiating an investigation.

Pascal LamyEU Commissioner for Trade Pascal Lamy (at right) stated in a release that "The EU and 10 other countries had maintained that this measure clearly flies in the face of the letter and the spirit of WTO law. This was our conviction from the outset and I am glad that the Appellate Body has now clearly and definitively condemned this measure. We now expect the US to act quickly in order to repeal the Byrd amendment."

The Office of the U.S. Trade Representative (USTR) stated in a release [PDF] that "We welcome the findings in today's report that the Act is consistent with the WTO requirements for the initiation of anti-dumping or countervailing duty investigations. We are still reviewing that report, but we note that since the dispute did not involve the underlying U.S. anti-dumping and countervailing duty laws, the United States will continue to vigorously enforce those laws to ensure that U.S. industries, farmers, and workers are not forced to compete with unfairly traded imports. We are however disappointed with the Appellate Body's findings concerning the funds disbursed under the Act."

The USTR added that "The United States has been a leader in supporting rules-based dispute settlement in the WTO. Therefore, in this case as in others, the United States will seek to comply with its WTO obligations. We are reviewing the report to assess the best compliance options, and will discuss these with the Ways and Means and Finance Committees, and all other interested members of Congress."

Sen. Charles Grassley (R-IA), Chairman of the Senate Finance Committee, which has jurisdiction over most trade issues, also reacted. He said in a release that "the Byrd amendment was slipped into an appropriations conference report without full debate in the Senate. The Finance Committee, as the committee of jurisdiction, never had a chance to review the amendment. I'm not surprised that a bill that was never considered by the committee of expertise or even the full Senate is found to violate our international commitments. That's why we have committees -- to make sure things like this don’t happen."

District Court Issues Ruling in Total Information Awareness FOIA Suit

1/16. The U.S. District Court (DC) issued an opinion [18 pages in PDF] in EPIC v. Department of Defense, a Freedom of Information Act (FOIA) case involving a request for records about the Defense Advanced Research Projects Agency's (DARPA) Information Awareness Office (IAO), and its program called Total Information Awareness (TIA). The Court held that the Electronic Privacy Information Center (EPIC) qualifies as a representative of the news media for the purposes of the FOIA, and thus is entitled to preferential fee status.

The EPIC submitted a FOIA request to the Department of Defense (DOD) requesting records of the DARPA. The DOD sought to charge EPIC fees for complying with this FOIA request. Charging fees -- sometimes excessive fees -- for searching for and copying records is a tactic employed by some federal agencies to deter persons from exercising their rights under the FOIA.

EPIC filed a complaint in U.S. District Court (DC). The FOIA allows agencies to charge fees. However, it also provides an exception for representatives of the news media. Courts have interpreted this exception broadly. See for example, National Security Archive v. DOD, 880 F.2d 1381 (D.C. Cir. 1989).

The EPIC filed a motion for preliminary injunction in which it argued that it qualifies for the "representative of the news media" exception. The Court held that "EPIC satisfies the definition of ``representative of the news media´´ ... EPIC's regular publication and dissemination of its biweekly electronic newsletter, as well as the publication of seven books, qualify it for preferred fee status."

IRS Launches Free File

1/16. The Department of Treasury (DOT), Office of Management and Budget (OMB), and Internal Revenue Service (IRS) announced details of IRS Free File, which pertains to preparing and filing federal tax forms online.

Acting Treasury Secretary Kenneth Dam stated in a speech that "In our technologically advanced economy, electronic transactions are nearly ubiquitous. With Free File, the federal government is finally catching up to the nation we strive to support."

On October 30, 2002 the Internal Revenue Service (IRS) and Free File Alliance (FFA) signed a document [7 pages in PDF] titled "Free On-Line Electronic Tax Filing Agreement". The FFA is a consortium of companies in the electronic tax preparation and filing industry, organized as a non-profit corporation to facilitate participation in this agreement. The agreement provides that "The Consortium will offer Free Services to taxpayers. The IRS will provide taxpayers with links to the Free Services offered by the Consortium Participants through a web page ... which will be hosted at accessible through During the term of this Agreement, the IRS will not compete with the Consortium in providing free, online tax return preparation and filing services to taxpayers."

The Treasury Department and OMB stated on January 16, 2003 that "Each Free File Alliance member company sets taxpayer eligibility requirements for its own program. These requirements will differ from company to company. Generally, eligibility will be based on factors such as age, adjusted gross income, state residency, military status or eligibility to file a Form 1040EZ or for the Earned Income Tax Credit. The agreement requires the Alliance, as a whole, to provide free services for at least 60 percent or 78 million of the nation’s taxpayers during each filing season. As of January 16, 2003, the industry has exceeded that requirement. The number may fluctuate throughout the filing season as Alliance membership and offers change. The primary candidates for Free File are those taxpayers who prepare their own taxes and still file paper returns. Last filing season, the IRS received nearly 85 million paper returns and nearly 47 million e-filed returns." See, Treasury release and OMB release [PDF]

Sen. Charles Grassley (R-IA), Chairman of the Senate Finance Committee, which oversees the IRS, stated in a release that "I’m glad to see the IRS has seen the light on one of the most common criticisms of electronic filing -- that it’s too expensive -- and is advancing an effort that should provide free electronic filing to tens of millions of Americans. This is good news. A successful electronic filing program is something I've wanted for years. It should free up IRS staff and make it easier for the IRS to deliver the high quality customer service that taxpayers expect and deserve. It's also important that paper filing continues to be an option indefinitely for taxpayers who don't have to access to computers."

See also, story titled "IRS Enters Into Agreement with Electronic Tax Preparation Consortium" in TLJ Daily E-Mail Alert No. 539, October 31, 2002.

Commissioners Address Media Ownership

1/16. Federal Communications Commission (FCC) Chairman Michael Powell gave a speech [MS Word] at a Columbia Law School event titled "Forum on Media Ownership". Powell stated that "We will have broadcast ownership rules at the end of this proceeding." But, he did not say what those rules will be.

Powell stated that "We will use this record to build a solid, legally defensible broadcast ownership framework. No longer will our ownership rules be based on personal bias or anecdotes about the media market. Our rules will preserve and enhance diversity, localism, and competition. And they will do so based on the media environment Americans experience every day -- digital, vibrant, and evolving."

Powell also stated that "Every two years, the Commission is required by law to review these limits on ownership. And the statute requires the FCC to presume each rule is no longer needed unless we prove otherwise. Unless we can re-justify each broadcast ownership rule under current market conditions, the rule goes away."

He added that "In the last two years, four of our ownership rules were challenged in court, and each time the rule was overturned. The court told us, in no uncertain terms, that the legal standard for reviewing the broadcast ownership rules is a rigorous one. Either we produce evidence that a rule is still necessary, or it must be eliminated."

The statute requires that the FCC "shall determine whether any of such rules are necessary in the public interest" and repeal those section that are no longer in the public interest. Recently, the U.S. Court of Appeals (DCCir) has been remanding or vacating the FCC's ownership rules.

For example, on April 2, 2002, the Appeals Court issued its opinion in Sinclair Broadcast Group v. FCC, remanding the FCC's local television ownership rule for further consideration. See, story titled "DC Circuit Remands Local TV Ownership Rule to FCC" in TLJ Daily E-Mail Alert No. 402, April 3, 2002.

Similarly, on February 19, 2002, the Appeals Court issued its opinion in Fox v. FCC. The Court held that the FCC's national TV station ownership rule (NTSO) and its cable broadcast cross ownership rule (CBCO) both violate the Administrative Procedure Act (APA) as arbitrary and capricious, and Section 202(h) of the Telecom Act. See, stories titled "DC Circuit Vacates Cable Broadcast Cross Ownership Rule", TLJ Daily E-Mail Alert No. 372, February 20, 2002, and "FCC Files Petition for Review of Appeals Court Opinion in Fox v. FCC" in TLJ Daily E-Mail Alert No. 415, April 22, 2002.

FCC Commissioner Kevin Martin gave also gave a speech at the Columbia Law School event. He stated that "The existing media ownership rules were crafted to promote three principles: competition, diversity, and localism. While the media marketplace may have changed since those rules were first adopted, our need to promote these core values has not."

He added that "the courts have insisted that we recognize that the media landscape has changed dramatically since most of the broadcast ownership rules were first enacted." He also noted that "the advent of the Internet has dramatically changed how people send and receive information. It now represents a significant outlet for diverse views, as well as an important source of news and information to consumers."

See also, the FCC's Media Ownership Policy Reexamination web site.

4th Circuit Rules First Amendment Includes Right to Receive Information

1/16. The U.S. Court of Appeals (4thCir) issued its opinion [16 pages in PDF] in Rossignol v. Voorhaar, a Section 1983 case involving interpretation of the First Amendment. It held that the Constitution protects "the intended recipients' right to receive that information and those ideas".

Rossignol publishes a small weekly newspaper in a small rural county in southern Maryland. Off duty, plain clothes sheriff's deputies traveled around the county the night before an election and systematically bought up every copy of the newspaper they could find. Rossignol was a long time critic of the incumbent Sheriff and others. The purpose of the purchases was to keep the voters from reading the election day issue.

Rossignol filed a complaint in U.S. District Court (DMd) against the Sheriff, Richard Voorhaar, and others, alleging violation of 42 U.S.C. § 1983, which provides a civil cause of action for violation of civil rights. The District Court found that the defendants did not act under color of state law, as required by the statute, and dismissed. See, 199 F. Supp. 2d 279. Rossignol appealed.

The Court of Appeals reversed. It found that the defendants did act under color of state law. However, more importantly, it found that there is can be a First Amendment violation where newspapers are purchased, and no effort is made to stop publication.

The Court wrote that "the fact that defendants paid for the newspapers in no way affects the conclusion that the seizure violated plaintiffs' right to disseminate core political speech. ... The First Amendment is about more than a publisher's right to cover his costs. Indeed, it protects both a speaker's right to communicate information and ideas to a broad audience and the intended recipients' right to receive that information and those ideas. Bd. of Educ., Island Trees Union Free Sch. Dist. No. 26 v. PICO, 457 U.S. 853, 867 (1982). Liberty of circulation is as important to freedom of the press ``as liberty of publishing; indeed, without the circulation, the publication would be of little value.´´ Lovell v. City of Griffin, 303 U.S. 444, 452 (1938) (quoting Ex parte Jackson, 96 U.S. 727, 733 (1877))." (Emphasis and parentheses in original.)

The Court did not cite that other old and famous case involving the right to hear, Red Lion v. FCC, 395 U.S. 367 (1969). The Supreme Court wrote in that case that "It is the right of the viewers and listeners, not the right of the broadcasters, which is paramount."

The Rossignol case is a 21st Century reaffirmation of the principle that freedom of speech encompasses a right in the recipient to receive information. Moreover, this case stands for the proposition that otherwise lawful commercial transactions (i.e., buying things) can implicate First Amendment rights.

This may have some importance to technology, because historically, the principle of the right to receive information has been at the heart of efforts by the Congress and the Federal Communications Commission (FCC) to regulate or mandate certain speech, and to impose media ownership rules. The latter topic is currently being reviewed by the FCC. That is, buying things (i.e., other media outlets) may decrease the diversity of voices, and hence, implicate the public's right to receive diverse viewpoints and types of information.

Chief Judge Harvie Wilkinson wrote the opinion. Born in 1944, and appointed to the 4th Circuit in 1984, Wilkinson has long been considered by Court watchers to be a possible nominee to the Supreme Court in any Republican administration.

Tech Crime Report

1/16. A grand jury of the U.S. District Court (CDCal) returned an indictment of Igor Serebryany charging three counts of theft of trade secrets. The indictment alleges that Serebryany stole information from the law office of Jones Day Reavis & Pogue about one of its clients, DirecTV. It further alleges that he worked for a document imaging company that Jones Day had retained in connection with litigation to which DirecTV is a party. The indictment alleges that Serebryany stole and distributed information about DirecTV's latest and most sophisticated conditional access card. See, USAO release.

People and Appointments

1/16. Dick Parsons was named Chairman and CEO of AOL Time Warner. See, release.

More News

1/16. The U.S. Court of Appeals (7thCir) issued its split opinion [19 pages in PDF] in Baxter v. Abbott Labs, a patent licensing case.

1/16. The Federal Trade Commission (FTC) announced that it filed six civil complaints in U.S. District Courts against defendants who used web sites and spam e-mail to market and sell fake "international driving licenses". The FTC seeks injunctive relief, restitution, disgorgement, and other relief. The FTC also announced that it has obtained temporary restraining orders in five cases. See, FTC release. See also, for example, complaint [10 pages in PDF] against Carlton Press, Inc, et al., and Temporary Restraining Order [19 page PDF scan].

1/16. Qwest filed Section 271 applications with the Federal Communications Commission (FCC) to provide in region interLATA services in the states of Michigan and Nevada. See, Michigan release and Nevada release.

1/16. The Association for Competitive Technology (ACT) announced its agenda for 2003. It includes six issues: "1. the protection of intellectual property  2. increased deployment of broadband  3. the removal of barriers to e-commerce 4. 21st Century competition policy  5. effective trade policy and fair  6. growth-oriented fiscal policy". See, release.

Go to News from January 11-15, 2003.