Administration Will Work With Congress on EAA

3/20. Connie Correll of the Department of Commerce's Technology Administration gave a speech titled "Promoting Economic Growth, Jobs and Innovation" at an event in Washington DC titled "Women's High Tech Coalition Luncheon". She wrote in the prepared text of her speech, among other things, that the "President continues to support a streamlined and strengthened export control system that promotes US security and economic interests. EAA passed Senate last year … didn't pass House. Will continue to work with Congress." ("..." in original.)

Sen. Mike Enzi (R-WY) sponsored S 149 (107th), the Export Administration Act (EAA) of 2001, in the 107th Congress. The Senate passed the bill by a vote of 85-14, just prior to the terrorist attacks of September 11, 2001. The bill was also supported by the Bush administration. S 149 would have modernized export control laws. It would have eased restraints on most dual use products, such as computers and software, but increased penalties for violations. It also would have eliminated the use of Million Theoretical Operations Per Second (MTOPS) based limits to control the export of high performance computers.

Rep. David Dreier (R-CA) introduced HR 2568 (107th), an administration backed bill, in the House, on July 19, 2001. However, it did not pass in the House. Instead, HR 2581 (107th), sponsored by former Rep. Benjamin Gilman (R-NY), which is a much different bill that is not supported by the administration, Rep. Dreier, or Sen. Enzi, passed the House International Relations Committee (HIRC) on August 1, 2001. The House then took no further action on any export control bill.

Rep. Dreier introduced HR 55 (108th) on January 7, 2003. It is essentially the Enzi proposal. HR 55 has been referred to the HIRC. The Committee has taken no action on the bill.

Sen. Enzi has not yet reintroduced his bill in the 108th Congress. A member of Sen. Enzi's staff e-mailed TLJ on January 24 that Sen. Enzi is still working on a revised version of his bill for the 108th Congress, and remains "optimistic".

The Department of Commerce, and its Bureau of Industry and Security (BIS), which is still often referred to as the Bureau of Export Administration (BXA), issues licenses for dual use items. These are things, including software, encryption products, and high performance computers, that might be used for either civilian or military or terrorist purposes.

The statutory authority of the BIS to operate this export control regime derives from the Export Administration Act (EAA). Congress first passed export control legislation in 1949. It has passed legislation revising the system several times since. However, the most recent statute, the Export Administration Act of 1979, lapsed in 1990. However, Presidents since then have exercised statutory authority to declare that an emergency exists, and, by executive order, extend the export control regime, absent a statute. This has enabled the BIS to continue to license the export of dual use items.

FTC/DOJ Oppose Restraints on E-Commerce Posed by Unlicensed Practice of Law Rules

3/20. The Federal Trade Commission (FTC) and the Department of Justice's (DOJ) Antitrust Division wrote a letter to the Georgia State Bar's Standing Committee on the Unlicensed Practice of Law in response to its inquiry regarding preparation of deeds and other real estate conveyance instruments. The FTC and DOJ focused on the impact that an overly broad restriction on the practice of law would have on Internet competition and electronic commerce. See also, DOJ release and FTC release.

The Georgia bar committee posed the following question: "Is the preparation and execution of a deed of conveyance (including, but not limited to, a warranty deed, limited warranty deed, quitclaim deed, security deed, and deed to secure debt) considered the unlicensed practice of law if someone other than a duly licensed Georgia attorney prepares or facilitates the execution of said deed(s) for the benefit of the seller, borrower and lender?" (Parentheses in original.)

The DOJ and the FTC (which has recently been examined state based barriers to e-commerce) wrote that "a ban on the preparation of deeds and the facilitation of their execution by anyone other than a licensed Georgia attorney could reduce competition from out-of-state service providers. In the real estate mortgage market, for example, lenders outside Georgia may compete by offering lower interest rates or more attractive loan packages than similar in-state institutions. These lenders may lack facilities in Georgia. They may hire out-of-state providers to prepare deeds and may contract with Georgia lay providers to facilitate the execution of those deeds. Some of these lenders may conduct their entire loan application and approval process via the Internet, simultaneously reducing costs and increasing customer convenience. A ban on competition from anyone other than a licensed Georgia attorney has the potential to impair this competition between lenders, and also to impair the ability of lenders and others to compete via the Internet."

The DOJ and FTC also argued that "these potential restrictions are likely to impede substantially the growth of e-commerce. The Internet is changing the way many goods and services are delivered, and consumers benefit from the increased choices and convenience and decreased costs that the Internet can deliver." They added that "when restrictions may foreclose potential new Internet competitors, one should proceed cautiously, mindful of the unintended consequences that may unduly limit the choices of consumers."

The DOJ and FTC concluded that they "urge the Standing Committee either to adopt an opinion concluding that it is not the practice of law to prepare deeds and facilitate their execution or to decline to issue any opinion at all."

Rep. Boehlert Addresses Math and Science Education

3/20. Rep. Sherwood Boehlert (R-NY), Chairman of the House Science Committee, gave a speech to Presidential Teacher Awardees in which he addressed the teaching of math and science.

He asked rhetorically, "what can we be doing to help attract more top students into teaching science and math? It seems to me that this is the most critical question of all ..."

"Years ago, I began proposing to give federal scholarships to top math and science majors who agree to teach for a set number of years in return for the tuition assistance. Senator Rockefeller and I got such a program enacted a decade or so ago, but it was never funded. Until now", said Rep. Boehlert. "With the enactment of the ``Math and Science Partnerships Act´´ and the renewed interest in education, we got Congress to put $7 million in this year's budget for the program, building on the $5 million that was included last year."

See also, HR 1858 (107th Congress) and S 1262 (107th). The language of these bills was included in HR 4664 (107th), National Science Foundation Authorization Act of 2002, which became Public Law No. 107-368 on December 19, 2002. See also, July 27, 2001 statement in the Senate by Sen. Jay Rockefeller (D-WV).

Copyright Office to Hold Hearings on DMCA Anti Circumvention Exemptions

3/20. The Copyright Office (CO) published a notice in the Federal Register announcing that it will hold a series of hearings on possible exemptions to the Digital Millennium Copyright Act's (DMCA) prohibition against circumvention of technological measures that control access to copyrighted works.

The CO just completed a round of written comments. March 10 was the extended deadline to submit reply comments to the Copyright Office (CO) in response to its current rulemaking proceeding concerning exemptions to the anti-circumvention provisions of the DMCA. The CO has published 50 original comments and 272 reply comments in its web site.

The CO hearings will be held in Washington DC on Friday, April 11, Tuesday, April 15, Wednesday, April 30, and Friday, May 2, beginning at 9:30 AM. The CO also announced that it will hold hearings in California in May, but it has not yet announced the dates, times and locations.

Persons wishing to testify must submit requests to the CO by April 1.

See, relevant statutory sections at 17 U.S.C. §§ 2101-2105. See also, Federal Register, March 20, 2003, Vol. 68, No. 54, at Pages 13652 - 13653.

FCC Releases Report on Telecommunications Industry Revenues

3/20. The Federal Communications Commission (FCC) released a report [huge PDF file] titled "Telecommunications Industry Revenues". The report states that total telecommunications services revenues increased by 3% from 2000 to 2001.

The revenues of the wireless industry grew by 20%. The revenues of competitive local telephone companies grew 36%. Toll service revenues declined 9%. Incumbent local exchange carrier (ILEC) revenues increased 1%.

This report contains data for 2001, and historical data from previous years. This annual report is based upon data filed by carriers on FCC Form 499-A (Telecommunications Reporting Worksheet), FCC Form 457 (Universal Service Worksheet), or FCC Form 431 (TRS Fund Worksheet).

This report also contains preliminary data on 2002, based upon FCC Form 499-Q, which is incomplete data. This data shows continued growth in the wireless industry, and for competitive local telephone companies. This data also shows declines for ILECs and toll service.

The report was written by Jim Lande and Kenneth Lynch of the Industry Analysis & Technology Division of the Wireline Competition Bureau.

5th Circuit Discusses Copyright and Divorce Jurisdiction

3/20. The U.S. Court of Appeals (5thCir) issued its opinion [12 pages in PDF] in Bridgmon v. Array Systems, a software copyright case in which the Appeals Court discussed, but did not rule upon, the issue of when a federal court has jurisdiction over a claim for a declaratory judgment of ownership of a copyright when the claimant is also a party to a pending divorce action involving property division.

George Bridgmon filed a complaint in U.S. District Court (NDTex) against Array Systems Corporation alleging copyright infringement and breach of contract, and against Kenna Bridgmon seeking declaratory judgment that he is the owner of the copyright in certain software. He was also involved in a divorce proceeding with Kenna Bridgmon. The District Court granted summary judgment to Array and Kenna. George brought this appeal.

The Appeals Court affirmed the grants of summary judgment, but vacated and remanded the award of attorneys fees to Array.

Judge Edith Jones, writing for the Appeals Court, also engaged in a sua sponte discussion of jurisdiction. That is, George sought jurisdiction over the declaratory judgment claim against his former wife, under the Copyright Act, when there was also a divorce action pending in state court in which division of the property of the marriage was at issue. After a lengthy discussion, the Appeals Court concluded that the issue was moot.

The Court's discussion is merely dicta. Most of it is buried in footnote 4. The Court wrote, in part, "If the declaratory judgment claim arose under the Copyright Act the district court would have jurisdiction under 28 U.S.C. § 1338(a). If it arose out of the same case or controversy as the copyright infringement claim the court could properly exercise its discretion to exercise supplemental jurisdiction over the claim under 28 U.S.C. § 1367. In this case, however, it is not clear if either of these statutes provides a basis for the district court’s jurisdiction. George's declaratory judgment claim might have violated the well-pleaded complaint rule by raising his ownership under federal law as a defense to Kenna's state law claims. ... If George's declaratory judgment claim did arise under the Copyright Act, then the federal courts would have exclusive jurisdiction over such claims pursuant to 28 U.S.C. § 1338(a), and the state courts would be without jurisdiction to dispose of copyrights held by a party to a divorce action. ... It is also unclear whether the dispute between George and Kenna arose out of the same nucleus of operative facts as George's copyright infringement claim against Array. However, we need not address this complicated jurisdictional issue in light of the declaratory judgment claim's mootness."

Bush Picks Frank Libutti for Key Tech Position at DHS

3/20. President Bush announced his intent to nominate Frank Libutti to be Under Secretary for Information Analysis and Infrastructure Protection at the new Department of Homeland Security (DHS). Libutti is currently the New York City Police Department's Deputy Commissioner of Counter Terrorism. He was previously Special Assistant for Homeland Security at the Department of Defense (DOD). See, White House release.

Libutti (at right) recently retired from the U.S. Marine Corps, with the rank of Lieutenant General. His Marine Corps biography reflects a long and distinguished career of military service. It does not reflect a background in information or communications technology.

The Homeland Security Act of 2002, HR 5005 (107th) and Public Law No. 107-296, creates two directorates, both headed by an Under Secretary, that have science and technology responsibilities. First, there is the Title II Directorate for Information Analysis and Infrastructure Protection, which has primary responsibility for information sharing and cyber security matters. Title II also creates the positions of Assistant Secretary for Infrastructure Protection and Assistant Secretary for Information Analysis. Second, there is the Title III Directorate for Science and Technology, which has primarily responsibility for chemical, biological, radiological, and nuclear threats. However, the responsibilities of the Title III Directorate include supporting the Title II Directorate "by assessing and testing homeland security vulnerabilities and possible threats".

Libutti has been picked to head the Title II Directorate. Robert Liscouski and Paul Redmond were previously nominated for the two Title II Assistant Secretary positions. Charles McQueary was previously named to head the Title III directorate.

Section 201 of the Homeland Security Act provides that "the responsibilities of the Under Secretary for Information Analysis and Infrastructure Protection shall" include, in addition to information analysis and sharing responsibilities, the following:

"To develop a comprehensive national plan for securing the key resources and critical infrastructure of the United States, including power production, generation, and distribution systems, information technology and telecommunications systems (including satellites), electronic financial and property record storage and transmission systems, emergency preparedness communications systems, and the physical and technological assets that support such systems."

"To establish and utilize, in conjunction with the chief information officer of the Department, a secure communications and information technology infrastructure, including data-mining and other advanced analytical tools, in order to access, receive, and analyze data and information in furtherance of the responsibilities under this section, and to disseminate information acquired and analyzed by the Department, as appropriate."

"To ensure, in conjunction with the chief information officer of the Department, that any information databases and analytical tools developed or utilized by the Department -- (A) are compatible with one another and with relevant information databases of other agencies of the Federal Government; and (B) treat information in such databases in a manner that complies with applicable Federal law on privacy."

See also, story titled "Bush Fills More Tech Positions at DHS", TLJ Daily E-Mail Alert No. 623, March 14, 2003, and story titled "Bush To Nominate McQueary for Science and Technology Position at DHS",  TLJ Daily E-Mail Alert No. 581, January 13, 2003.

More People and Appointments

3/20. EDS announced that Michael H. Jordan is its new Ch/CEO, replacing Richard Brown, and Jeffrey Heller is its new P/COO, effective immediately. See, EDS release.

3/20. Uttam Dhillon was named Chief Counsel and Deputy Staff Director of the House Select Committee on Homeland Security. He was previously Policy Director of the House Republican Policy Committee. Before that, he was an attorney with the law firm of Milbank Tweed Hadley & McCloy. He was also an Assistant U.S. Attorney in Los Angeles. Bill Schulz was named Chief Counsel for the Policy Committee. He is a former Special Master for the U.S. Court of Federal Claims, and former hill staffer. Vincent Sollitto was named Communications Director of the Homeland Security Committee. He was previously VP for Corporate Communications and External Affairs at PayPal, which was acquired by eBay last year. Before that, he was Communications Director for Sen. Jon Kyl (R-AZ). Before that, he was Press Secretary for Rep. Chris Cox (R-CA), who is now the Chairman of the Homeland Security Committee.

3/20. The Securities and Exchange Commission (SEC) announced that William Tolbert, Associate Director of the Division of Corporation Finance, will leave the SEC. See, SEC release.

More News

3/20. Rep. Ed Markey (D-MA) and Rep. John Larson (D-CT) introduced HR 1396 [20 pages in PDF], the Spectrum Commons and Digital Dividends Act of 2003. Rep. Markey introduced a similar bill, HR 4641, the Wireless Technology Investment and Digital Dividends Act of 2002, in the 107th Congress.

3/20. A trial jury of the U.S. District Court (EDTex) returned a verdict in favor of Microtune in its patent infringement lawsuit against Broadcom. The jury found that Microtune's U.S. Patent No. 5,737,035 titled "Highly integrated television tuner on a single microcircuit" is valid and that Broadcom infringed it. See, Microtune release.

3/20. Sen. Max Baucus (D-MT) and others introduced S 676, a bill to establish a WTO Dispute Settlement Review Commission. Sen. Baucus said in his floor statement [2 pages in PDF] that "The bill that we are introducing would create a Commission to review decisions of the World Trade Organization. Why is this legislation necessary? Simply put – we must ensure that the United States is getting the benefit of the agreements we negotiated. WTO panels have handed down several decisions recently that go well beyond the scope of their authority." He referenced the disputes over the Byrd Amendment and softwood lumber, but not the FSC/ETI tax regime. The bill was referred to the Senate Finance Committee.

3/20. The Senate Judiciary Committee released a list of subcommittee assignments for the 108th Congress.

FCC Approves Verizon Long Distance Applications for Maryland, WV & DC

3/19. The Federal Communications Commission (FCC) approved the Section 271 applications of Verizon to provide in region interLATA services in the states of Maryland and West Virginia and in the District of Columbia. This now provides Verizon authority to provide long distance service in all of its territory, and hence, nationwide.

The FCC concluded in its Order that "Verizon has taken the statutorily required steps to open its local exchange markets in Maryland, Washington, D.C., and West Virginia to competition." See, FCC release [2 pages in PDF] and Memorandum Opinion and Order [246 pages in PDF]. See also, Verizon release.

Commissioner Michael Copps wrote in a separate statement [1 page in PDF] that he concurred, but added that "the majority concludes that the statute permits Bell companies in all instances to demonstrate compliance with the checklist by aggregating the rates for non-loop elements. I disagree with the majority's analysis. I believe the better reading of the statute is that the rate for each network element must comport with Congress’ pricing directive."

He also wrote that "Our present data on whether competition is taking hold is sketchy and non-integrated. We need better data to evaluate whether and how approved carriers are complying with their obligations after grant of the application, as Congress required."

Commissioner Kevin Martin wrote in a separate statement [3 pages in PDF] that he concurred, but disagreed with the FCC's statutory analysis regarding the standard for reviewing the pricing of individual unbundled network elements. He wrote that "the Commission finds that the statute does not require it to evaluate individually the checklist compliance of UNE TELRIC rates on an element-by-element basis. The Commission concludes that because the statute uses the plural term ``elements,´´ it has the discretion to ignore subsequent reference to prices for a particular ``element´´ in the singular." Martin wrote, "I disagree".

Commissioner Jonathan Adelstein responded. He wrote in a separate statement [2 pages in PDF] that "Today the Commission is following established precedent in finding that the statute does not require it to evaluate individually the checklist compliance of UNE TELRIC rates on an element by element basis. Although some have raised concerns regarding this sort of analysis, I believe that the Commission has correctly interpreted the statute regarding this determination."

This is Docket No. 02-384. For more information, contact Gail Cohen at 202 418-1580.

Verizon Says It Has Broadband Deployment Plans

3/19. Verizon announced in a release that it "is adding more than 10 million new lines to the 36 million now equipped with digital subscriber line (DSL) service from Verizon. By year's end Verizon Online broadband service will be available to millions of homes not now served, primarily in suburban and rural communities, making broadband available on 80 percent of all Verizon lines."

Verizon also stated that "New technology being deployed by Verizon will expand the market coverage of its digital subscriber line broadband service by pushing its reach beyond the current limit of three miles of copper wire. The company will put DSL equipment in more than 3,000 neighborhood terminals that are connected to the Verizon network with fiber-optic cables, and it will put DSL equipment in approximately 1,000 additional neighborhood switching centers."

It also stated that "DSL is a first-generation broadband technology used with copper lines. However, Verizon already is serving most larger businesses on fiber links, and the company expects that fiber-optic technology ultimately will become the preferred communications medium to reach homes as well as businesses."

Federal Communications Commission (FCC) Commissioner Kevin Martin issued a statement in which he praised Verizon's announcement.

On February 20, the FCC issued a press release [2 pages in PDF] and an attachment [4 pages in PDF] in which it briefly described what its Triennial Review order will some day provide. This order pertains to the Section 251 unbundling obligations of incumbent local exchange carriers (ILECs), such as Verizon.

The FCC's releases contain several statements relevant to broadband deployment. For example, the FCC stated that "Incumbent LECs are not required to unbundle packet switching, including routers and DSLAMs, as a stand alone network element. The order eliminates the current limited requirement for unbundling of packet switching."

The FCC also stated: "Fiber to the Home (FTTH) Loops -- There is no unbundling requirement for new build/greenfield FTTH loops for both broadband and narrowband services. There is no unbundling requirement for overbuild/brownfield FTTH loops for broadband services. Incumbent LECs must continue to provide access to a transmission path suitable for providing narrowband service if the copper loop is retired."

The FCC also stated: "Hybrid Loops -- There are no unbundling requirements for the packet-switching features, functions, and capabilities of incumbent LEC loops. Thus, incumbent LECs will not have to provide unbundled access to a transmission path over hybrid loops utilizing the packet-switching capabilities of their DLC systems in remote terminals. Incumbent LECs must provide, however, unbundled access to a voice-grade equivalent channel and high capacity loops utilizing TDM technology, such as DS1s and DS3s."

Finally, the FCC stated that "the Commission will no longer require that line-sharing be available as an unbundled element".

Verizon Vice Chairman Lawrence Babbio stated that "if the FCC's final order as it relates to broadband is written the way it's been advertised that will encourage us to speed our deployment of all broadband technologies."

Deputy Assistant USTR Testifies Re Lack of Transparency and IPR Enforcement in China

3/19. The Senate Foreign Relations Committee's Subcommittee on East Asian and Pacific Affairs held a hearing titled the "Effects and Consequences of an Emerging China". Charles Freeman, a Deputy Assistant U.S. Trade Representative (USTR), wrote in his prepared testimony about the progress and shortcomings in PR China's efforts to comply with its World Trade Organization (WTO) commitments. He addresses lack of transparency and lack of enforcement of intellectual property rights.

He stated that "One area of cross-cutting concern involved transparency. In particular, China implemented its commitment to greater transparency in the adoption and operation of new laws and regulations unevenly at best. While some ministries and agencies did take steps to improve opportunities for public comment on draft laws and regulations, and to provide appropriate WTO enquiry points, the Administration found China's overall effort to be plagued by uncertainty and a lack of uniformity. The Administration is committed to seeking improvements in China's efforts in this area."

He continued that "Apart from this systemic concern, three other areas generated significant problems and warrant continued U.S. scrutiny -- agriculture, intellectual property rights and services. ... In the area of intellectual property rights (IPR), China did make significant improvements to its framework of laws and regulations. However, the lack of effective IPR enforcement remained a major challenge. If significant improvements are to be achieved on this front, China will have to devote considerable resources and political will to this problem, and there will continue to be a need for sustained efforts from the United States and other WTO members."

More Trade News

3/19. The Trade Policy Staff Committee (TPSC) of the Office of the U.S. Trade Representative (USTR) and the Department of Labor published a notice in the Federal Register requesting public comment regarding the proposed U.S. Central America free trade agreement (CAFTA). This FTA includes provisions pertaining to electronic commerce, telecommunications services, and the protection of intellectual property rights. Comments are due by April 25, 2003. See, Federal Register, March 19, 2003, Vol. 68, No. 53, at Pages 13358 - 13359. See also, the USTR's web page for the CAFTA.

3/19. The U.S. International Trade Commission (USITC) published a notice in the Federal Register stating that it has instituted an investigation regarding the proposed U.S. Chile free trade agreement (FTA). The USITC stated that it will assess the effect of this FTA on "United States economy as a whole and on specific industry sectors and the interests of U.S. consumers". See, Federal Register, March 19, 2003, Vol. 68, No. 53, at Pages 13324. See also, the USTR's December 2002 summary [PDF] of the Chile FTA, and President Bush's January 30, 2003 notice to Congress. This FTA includes provisions pertaining to electronic commerce, telecommunications services, and the protection of intellectual property rights.

3/19. The Office of the U.S. Trade Representative (USTR) submitted two papers to the World Trade Organization (WTO). The first paper [6 pages in PDF] is titled "Identification of Certain Major Issues Under the Antidumping and Subsidies Agreements". The second paper [7 pages in PDF] is titled "Subsidies Disciplines Requiring Clarification and Improvement". The USTR stated in a release. that these papers "make the case for strengthening global trade rules against unfair trade practices, such as providing government subsidies to industries, and dumping -- selling goods at unfairly low prices."

Adelstein Names Assistants

3/19. Federal Communications Commission (FCC) Commissioner Jonathan Adelstein announced that Barry Ohlson will be his permanent Wireless Legal Advisor and that Johanna Mikes will be his permanent Media Advisor, effective March 31. See, release.

Mikes is currently a legislative assistant to Rep. Rick Boucher (D-VA), where she has worked on intellectual property issues associated with new media. Rep. Boucher is the sponsor of HR 107, the "Digital Media Consumers' Rights Act of 2003", a bill that would provide a fair use exception to the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA). He is also a cosponsor of HR 1066, the "Benefit Authors without Limiting Advancement or Net Consumer Expectations (BALANCE) Act of 2003". He also sponsored, in the 107th Congress, HR 2724, the "Music Online Competition Act", which is also known as MOCA. Rep. Boucher has been one of the most active and effective opponents in the House of the entertainment industries on intellectual property issues.

Mikes will replace Sarah Whitesell, who has been interim Media Advisor since Adelstein joined the FCC in December 2002. Mikes worked at the FCC as Attorney Advisor in the Policy and Program Planning Division of the Common Carrier Bureau before working for Rep. Boucher. Before that, she was an attorney in the Washington DC office of the law firm of Latham & Watkins.

Ohlson has been Adelstein's interim wireless legal advisor since Adelstein joined the FCC. Previously, Ohlson was Chief of the Policy Division in the FCC's Wireless Telecommunications Bureau. He also worked as a Legal Advisor to the Wireless Bureau Chief and as acting Chief of the Public Safety and Private Wireless Division. Before that, he worked for Winstar Communications. And before that, he worked as an attorney in the law firms of McDermott Will & Emery and Keller and Heckman.

More People and Appointments

3/19. Paul Twomey was named P/CEO of the Internet Corporation for Assigned Names and Numbers (ICANN), replacing Stuart Lynn. See, release.

3/19. Former Vice President Al Gore joined the Board of Directors of Apple. See, Apple release.

More News

3/19. The House Science Committee (HSC) held a hearing on HR 766, the Nanotechnology Research and Development Act of 2003. It would authorize the appropriation of $2.1 Billion over three years for nanotechnology research and development programs at the National Science Foundation (NSF), Department of Energy (DOE), Department of Commerce's (DOC) National Institute of Standards and Technology (NIST), National Aeronautics and Space Administration (NASA), and Environmental Protection Agency (EPA). The majority of the funding would go to the NSF. HSC Chairman Sherwood Boehlert (R-NY) said in his opening statement that "nanotechnology can be a key to future economic prosperity and might improve our lives and that the federal government needs to play a role in making that so." He also announced that the HSC will hold another hearing on April 9 on the societal consequences of nanotechnology. See, prepared testimony of witnesses: Richard Russell (Associate Director for Technology at the Office of Science and Technology Policy), Thomas Theis (IBM Research Division), James Roberto (Oak Ridge National Laboratory), Carl Batt (Nanobiotechnology Center at Cornell University), and Alan Marty (JP Morgan Partners). See also, HSC release and story titled "Representatives Introduce Bill To Authorize Nanotech R&D Funding", TLJ Daily E-Mail Alert No. 606, February 18, 2003.

3/19. The Department of Justice's (DOJ) Antitrust Division filed a Competitive Impact Statement (CIS) with the U.S. District Court (DC) in U.S. v. Gemstar-TV Guide. On February 6, 2003, the DOJ filed a complaint in U.S. District Court against Gemstar-TV Guide and its subsidiary, TV Guide, alleging that they entered into agreements to fix prices and allocate markets and customers, and that they began jointly conducting their interactive program guide business, eliminating competition between them in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The complaint also alleged that they executed a merger agreement that required the filing of the Notification and Report Forms under Section 7A of the Clayton Act. The DOJ and these defendants have also reached a proposed settlement. The DOJ now files this CIS, pursuant to the requirements of the Antitrust Process and Penalties Act, 15 U.S.C. § 16, to set forth information necessary to enable the District Court and the public to evaluate the proposed final judgment.

3/19. Commerce Secretary Don Evans announced a "Standards Initiative". He stated in a release that "The Bush Administration remains committed to promoting competition and opening new markets for U.S. goods ... Standards and testing are key to our international competitiveness. But more and more we are hearing that foreign standards and testing requirements are keeping our products out of foreign markets. This is the wrong approach that reduces efficiencies, limits competition and increases prices for the consumer goods. This eight-point initiative is an effort to create a more level playing field around the world."

3/19. F5 Networks filed a complaint in U.S. District Court (WDWash) against Radware, NetScaler and Array Networks alleging infringement of its U.S. Patent No. 6,473,802, titled "Method and System for Storing Load Balancing Information with an HTTP Cookie". See, F5 release.

3/19. Sen. Orrin Hatch (R-UT) and others introduced S 664, the Investment in America Act of 2003, a bill to make permanent the research and development tax credit. It was referred to the Senate Finance Committee. Sen. Hatch has introduced similar bills in prior Congresses. See also, release and statement in the Senate.

3/19. The passed HR 975, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2003, by a vote of 315-113. See, Roll Call No. 74. See also, statement in the House made by Rep. James Sensenbrenner (R-WI), the sponsor of the bill. Sections 231 and 232 of the bill pertain to protection of personally identifiable information in bankruptcy proceedings. The bill has not yet been passed in the Senate.

3/19. The U.S. Court of Appeals (6thCir) issued its opinion in Amway v. Northfield Insurance, a breach of contract claim brought by an insured against its excess liability carrier alleging wrongful refusal to indemnify under an advertising injury clause for losses associated with the settlement of two copyright infringement lawsuits. The District Court granted summary judgment to the insurer. The Appeals Court reversed and remanded.

3/19. The Center for Democracy and Technology (CDT) released a report titled "Why Am I Getting All This Spam?
Unsolicited Commercial E-mail Research Six Month Report".

Senate Committee Holds Hearing on Internet Gambling Bill

3/18. The Senate Banking Committee held a hearing on proposals to regulate illegal internet gambling. The hearing focused on HR 21 and S 627, both of which would attempt to bar internet gambling operations access to the U.S. financial services system by banning the use of credit cards, wire transfers, or any other bank instrument to fund gambling transactions. The two bills are not identical. Senators expressed support for the legislation.

Rep. Upton Introduces Spectrum Relocation Bill

3/18. Rep. Fred Upton (R-MI) introduced HR 1320, the Commercial Spectrum Enhancement Act, a bill to facilitate the relocation of spectrum from federal users, such as the military, to commercial users, such as Third Generation (3G) wireless service providers. The bill would, among other things, create a "Spectrum Relocation Fund", to funded out of auction proceeds, to pay for relocation costs of federal entities whose spectrum is reallocated.

Rep. Upton (at right) stated in a release that "We must relocate federal government incumbents to comparable spectrum in order to make way for the commercial wireless industry, but the road to relocating government entities 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."

The bill would provide that any federal entity that uses a frequency band covered by the bill "that incurs relocation costs because of the reallocation of frequencies from Federal use to non-Federal use shall receive payment for such costs from the Spectrum Relocation Fund ..."

The bill would apply to the 1710-1755 MHz band, and "any other band of frequencies reallocated from Federal use to non-Federal use after January 1, 1995, that is assigned by competitive bidding pursuant to section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j))."

Rep. Upton introduced a very similar bill late in the 107th Congress. See, HR 5638, also titled the Commercial Spectrum Enhancement Act

The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing on HR 1320 on Tuesday, March 25 at 2:00 PM. Rep. Upton is the Chairman of this Subcommittee. The witnesses will include Nancy Victory, Director of the National Telecommunications and Information Administration (NTIA). The NTIA has spectrum management responsibilities for spectrum allocated for federal users.

The original cosponsors of the bill are Rep. Edolphus Towns (D-NY), Rep. Billy Tauzin (R-LA), Rep. Rick Boucher (D-VA), Rep. Lee Terry (R-IA), Rep. Gene Green (D-TX), and Rep. Cliff Stearns (R-FL).

Senate Finance Committee Addresses IT Modernization at IRS

3/18. The Senate Finance Committee held a hearing on the nomination of Mark Everson to be Commissioner of the Internal Revenue Service (IRS). If confirmed, he will replace Charles Rossotti. One of the issues addressed at the hearing was information technology.

Sen. Max Baucus (D-MT), the ranking Democrat on the Committee, said in his prepared statement [3 pages in PDF] that "the IRS is still in the technological dark ages". He added that "I realize that Commissioner Rossotti said it would take 10 years to complete the modernization projects, but Congress expected that more would be accomplished on the technology front during his tenure. I would like to know whether the modernization effort will be complete during your five-year tenure. I would also like to hear how you intend to keep systems modernization on track and make it a reality." Sen. Baucus concluded that "We want IRS representatives to have timely computer access to tax information so taxpayer assistance is quick and accurate. We want to reduce the paperwork and have more taxpayers filing electronically."

Sen. Charles Grassley (R-IA), the Chairman of the Committee, stated in his prepared statement [PDF] that "the Finance Committee expects progress in modernization".

Everson stated in his prepared testimony [PDF] that "If confirmed, I will work to support the information technology modernization efforts which have been underway for some years. Their success is badly needed in order to establish a more efficient and effective IRS. I would add that the information technology modernization program must be supplemented with other business process improvements which will allow the IRS to redirect scarce resources to operational priorities."

People and Appointments

3/18. John Gannon was named Republican staff director for the new House Select Committee on Homeland Security. Gannon headed the Bush administration's transition team for the new Department of Homeland Security's Intelligence and Infrastructure Protection Directorate. Prior to that, he was Vice Chairman of Intellibridge. Before that, he was Chairman of the National Intelligence Council, which produces intelligence estimates for the President on national security issues and  coordinates the work of the intelligence community. From 1998 through 2001, he was the Assistant Director of the Central Intelligence Agency (CIA) for Analysis and Production. From 1995 through 1997 he was Deputy Director of the CIA for Intelligence. And prior to that, he was an officer in the U.S. Navy.

3/18. Steven Cash was named Democratic staff director for the new House Select Committee on Homeland Security. He worked for the Senate Select Committee on Intelligence from 2001 through 2003. Before that, he worked for the Central Intelligence Agency (CIA) as Assistant General Counsel in the Litigation Division, and then as an Intelligence Officer in the Directorate of Operations. Before that, he worked in the New York County District Attorney's Office in New York City as an Assistant District Attorney in the Investigations Division, Rackets Bureau and the Trial Division from 1988 through 1992.

3/18. Lawrence West was named Associate Director of the Securities and Exchange Commission's (SEC) Division of Enforcement. He has worked for the SEC since 1994. He replaces William Baker III, who left in November of 2002. See, SEC release.

3/18. The Senate confirmed Ellen Weintraub and Michael Toner to be Commissioners of the Federal Election Commission. See, FEC release.

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3/18. The House Rules Committee adopted a rule for consideration of HR 975, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2003. Sections 231 and 232 of the bill pertain to protection of personally identifiable information in bankruptcy proceedings. The House will likely take up the bill on March 19 or 20.

3/18. The House Judiciary Committee approved HR 1104, the Child Abduction Prevention Act, by a vote of 18-2. This wide ranging bill includes the "Amber Alert" bill. Section 201 would amend 18 U.S.C. § 2516 to expand the list of predicate offenses that may serve as the basis for the issuance of a wiretap order. Each new predicate relates to sexual exploitation crimes against children. Section 201 is similar to HR 1877 (107th Congress) which passed the House on May 21, 2002 by a vote of 396-11. See, Roll Call No. 175. The Senate did not pass the bill.

3/18. The General Accounting Office (GAO) released its February 14, 2003 letter [PDF] to Rep. Tom Davis (R-VA), the Chairman of the House Government Reform Committee, regarding federal contracting for information technology services. The letter concludes that "Federal spending on IT services almost doubled from fiscal years 1997 to 2001, increasing from $9 billion to more than $17 billion. While the Department of Defense (DOD) remained the single largest purchaser of IT services throughout the period, spending on IT services through the General Services Administration (GSA) greatly increased, mostly the result of spending by GSA’s Federal Technology Service on behalf of other agencies. Spending on IT services through GSA’s federal supply schedule program grew from about $405 million to $4.3 billion. The distribution of IT services spending in fiscal year 2001 was 14 percent to small businesses, 21 percent to medium-size businesses, and 62 percent to large businesses."

Rosen Addresses Enforcement of Music Copyrights

3/17. Outgoing Recording Industry Association of America (RIAA) Ch/CEO Hilary Rosen gave a speech to the National Association of Recording Merchandisers in Orlando, Florida in which she addressed the RIAA's efforts to enforce music copyrights.

She began by stating that "The challenges we have faced as an industry with Napster and its clones are in many ways unprecedented in American commercial history. There we were rockin’ along, producing and selling great music and producing enough revenue to not just support everyone, but also to grow the opportunities around the world for a bigger and bigger business. Then suddenly we wake up one day and everything we have worked so hard to build is being offered to consumers for free or for a scant dollar on the street corner. Not 10 percent off. Not reduced interest rates. Not negotiated payment schedules. Our product is suddenly being offered to consumers for absolutely nothing."

She added that "I am tired of those who suggest that because sometimes someone is a music fan or a technology innovator or even, god forbid, a teenager or a student that they have a right to steal. They don't. ... Copyright are the rules of the road that encourage and ensure that creators bring forward new art every day. The right to decide how and when to reproduce, perform and distribute your works."

Rosen said that the RIAA must act through business strategies, public education and, targeted enforcement. She addressed enforcement at length.

She reviewed recent litigation against street piracy, including stores that sell infringing CDs, flea markets, and those producing pirated CDs. She also discussed cooperative efforts with law enforcement agencies.

Finally, she addressed RIAA's efforts to fight illegal downloading occurring on peer-to-peer networks.

First, she said that record companies are engaging in two self help remedies, spoofing and CD protection technologies.

She elaborated that "Spoofing is the practice of flooding the peer-to-peer network with bogus files titled the same as the hits. The goal is to encourage the user to give up in frustration and go to a legitimate site to get the real thing. While individual companies and not the RIAA do this, we know that it is having a positive benefit on new releases."

She then said that "While the technology is apparently not quite ready, there is promise for some protective technologies, which would offer consumers use of their music on the computer and still prevent uploading onto the Internet. While there are no specific plans to release such products into the marketplace at this time, if they are produced, record companies will need to work closely with retailers to assure that the proper consumer education and labeling takes place."

Second, she reviewed two pending court cases. "The first is one we have jointly filed with the Motion Picture Association of America (MPAA) against Kazaa, Grokster and MusicCity. We are expecting a ruling from the judge soon about whether we win in summary judgment or whether we have to go to trial to prove that the provider of these services are contributing to copyright infringement similar to Napster."

The U.S. District Court (CDCal) issued an order and opinion on January 9 in MGM v. Grokster in which it denied Sharman Network's motion to dismiss for lack of personal jurisdiction. Sharman, which now owns the key assets of Kazaa, is organized in the offshore jurisdiction of Vanuatu, apparently for the purpose of evading the reach of U.S. courts. Sharman provides free software, known as the Kazaa Media Desktop (KMD), that can be downloaded and used to search for and exchange digital music, movies, and other mostly copyrighted works, using FastTrack file sharing technology. See, TLJ story titled "District Court Squeezes Sharman on Internet Based Personal Jurisdiction", January 9, 2003.

Rosen continued that "The second is a case against Verizon. We thought we had an agreement with the ISPs. If they help us identify the direct infringer, they won't be liable for infringement themselves. Verizon has unfortunately turned this case into a bogus claim to protect their members' privacy rights. Well first of all, there is no right to commit a crime in private. And second and more importantly, when you are on one of these p2p systems and have opened your hard drive and its contents to the network, you have given away your own privacy."

The U.S. District Court (DC) issued an opinion on January 21 in RIAA v. Verizon, ruling that copyright holders can obtain subpoenas pursuant to 17 U.S.C. § 512(h) that require Internet Service Providers (ISPs) to reveal the identities of their customers who infringe copyrights on peer to peer filing sharing systems. Verizon had argued that 512(h) subpoenas were only available with respect to infringers who stored infringing content on the servers of the ISP. See, TLJ story titled "District Court Rules DMCA Subpoenas Available for P2P Infringers", January 21, 2003.

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3/17. The National Telecommunications and Information Administration (NTIA) announced that the deadline to submit applications for grants under the Technology Opportunities Program (TOP) for FY 2003 is April 23, 2003. The NTIA wrote in a notice in the Federal Register that the "TOP supports this mission through funding demonstrations of new telecommunications and information applications for the provision of educational, cultural, health care, public information, public safety, or other social services". See, Federal Register, March 17, 2003, Vol. 68, No. 51, at Pages 12678 - 12683. See also, NTIA release

3/17. The Department of Commerce (DOC) published in its web site its new contract with the Internet Corporation for Assigned Names and Numbers (ICANN) dated March 13, 2003.

3/17. The U.S. Trade and Development Agency (USTDA) awarded a $280,081 grant to the Ministry of Communications (MoC) of Afghanistan to fund a feasibility study on a proposed telecommunications backbone project. The USTDA stated in a release that "The MoC proposes to build a 3300km backbone ring linking many principal Afghan cities. In addition, the backbone will provide connectivity to international cable facilities." The USTDA added that "Afghanistan has one of the weakest telecommunications systems in the world with only one out of every 625 Afghans having access to telephone services."

Go to News from March 11-15, 2003.