|News from September 16-20, 2003|
ICANN Asks VeriSign to Suspend Wildcard Service
9/20. The Internet Corporation for Assigned Names and Numbers (ICANN) released a statement on September 19, 2003 regarding VeriSign's deployment of wildcard service into the .com and .net top level domain zones. It asked VeriSign to "voluntarily suspend the service". On September 20 the Internet Architecture Board (IAB) released a report that reviews the nature of the service, and the problems that it has created. For example, it finds that the service "broke several simple spam filters", and creates "significant privacy concerns".
ICANN Statement. The ICANN stated that "VeriSign's wildcard creates a registry-synthesized address record in response to lookups of domains that are not otherwise present in the zone (including restricted names, unregistered names, and registered but inactive names). The VeriSign wildcard redirects traffic that would otherwise have resulted in a ``no domain´´ response to a VeriSign-operated website with search results and links to paid advertisements." (Parentheses in original.)
"Since the deployment, ICANN has been monitoring community reaction, including analysis of the technical effects of the wildcard, and is carefully reviewing the terms of the .com and .net Registry Agreements." The ICANN added that "In response to widespread expressions of concern from the Internet community about the effects of the introduction of the wildcard, ICANN has requested advice from its Security and Stability Advisory Committee, and from the Internet Architecture Board, on the impact of the changes implemented by VeriSign. ICANN's Security and Stability Advisory Committee is expected to release an objective expert report concerning the wildcard later today."
The ICANN stated that it "called upon VeriSign to voluntarily suspend the service until the various reviews now underway are completed."
IAB Report. The IAB subsequently released its report titled "IAB Commentary: Architectural Concerns on the use of DNS Wildcards". It explains what wildcards are and why they create problems, reviews several examples of problems that they create, and offers policy recommendations.
The IAB explained that "Web browsers all over the world stopped displaying ``page not found´´ in the local language and character set of the users when given incorrect URLs rooted under these TLDs. Instead, these browsers now display an English language search page from a web server run by the zone operator."
The IAB reported that one of the problems that has resulted from VeriSign's installation of these wildcards is that it "broke several simple spam filters commonly used to front end inbound mail servers, as well as more complex filtering that checks for the existence of a sending domain in order to screen out obviously bogus senders".
The IAB also reported that the installation creates privacy problems. It wrote that "An interception service with this kind of scope raises significant privacy concerns, since traffic received by the interception service is, pretty much by definition, not going where its sender originally intended. The potential for abuse in this situation is very high, and makes the interception service an even more attractive target, this time for attackers who wish to gain control of it in order to practice such abuse."
The IAB also addressed security problems. It states that "Even for cases in which the redirection service works as intended, such a service creates a very large single point of failure. Single points of failure are obvious targets both for deliberate attacks and for the sort of accidental "attacks" caused by bugs and configuration errors which already generate much of the traffic at the DNS name servers for the root zone. Furthermore, the IP address associated with this single point of failure is a likely target both for routing attacks intended to redirect the IP address to some other server.
The IAB proposed the following guidelines. "If you want to use wildcards in your zone and understand the risks, go ahead, but only do so with the informed consent of the entities that are delegated within your zone."
Also, "we do not recommend the use of wildcards for record types that affect more than one application protocol. At the present time, the only record types that do not affect more than one application protocol are MX records."
The IAB added that "We hesitate to recommend a flat prohibition against wildcards in ``registry´´-class zones, but strongly suggest that the burden of proof in such cases should be on the registry to demonstrate that their intended use of wildcards will not pose a threat to stable operation of the DNS or predictable behavior for applications and users."
Finally, the IAB stated that "We recommend that any and all TLDs which use wildcards in a manner inconsistent with this guideline remove such wildcards at the earliest opportunity."
5th Circuit Rules in El Paso Rights of Way Case
9/19. The U.S. Court of Appeals (5thCir) issued its opinion [PDF] in Southwestern Bell Telephone Company v. El Paso, a case involving the laying of fiber optic cable, public rights of way, and local authorities who seek to extract fees. The Appeals Court upheld the District Court's grant of summary judgment to SWBT, which is laying the cable, and against a local water district, which is trying to charge fees for laying cable across its ditches.
Southwestern Bell Telephone Company (SWBT) is a telephone phone company that provides services in, among other places, the City of El Paso, which is located in west Texas. The El Paso County Water Improvement District (EPCWID) is a water district organized under Texas law. In 1996, the federal government deeded to the EPCWID certain irrigation canals, laterals and ditches, which the Appeals Court refers to as "facilities".
The EPCWID established application procedures that include the payment of an application fee of $500, followed by an ad hoc charge for the crossing. SWBT is placing lines, including fiber optic cable, across the EPCWID's facilities.
The incident that gave rise to this litigation was SWBT's laying of fiber optic cable along a public road that crossed one of EPCWID's facilities. The EPCWID threatened to arrest the line crews for trespass and remove the cables there and elsewhere if SWBT did not comply with EPCWID's application process and pay it the fees that it demanded.
SWBT filed a complaint in U.S. District Court (WDTex) against the City of El Paso and EPCWID seeking declaratory and injunctive relief. It alleged that EPCWID's application process and fees for the crossing of its facilities constituted an illegal taking in violation of the 5th Amendment and the Contract Clause of the U.S. Constitution, a violation Section 151 of the Communications Act, codified at 47 U.S.C. S 151, and a violation of the Texas Utility Code, § 181.082.
The District Court granted summary judgment to SWBT, but denied its request for attorney's fees. The Appeals Court affirmed the summary judgment on state law grounds, declined to address federal issues, and reversed and remanded the denial of attorney's fees. The Appeals Court also rejected several frivolous procedural issues raised by the EPCWID on appeal.
The is the second time that this dispute has been to the Fifth Circuit. On March 19, 2001, the Appeals Court issued its opinion rejecting the EPCWID's 11th Amendment immunity argument. The District Court denied the motion, on the grounds that the EPCWID is not an arm of the state. The Appeals Court affirmed. See, TLJ Daily E-Mail Alert No. 147, March 20, 2001; see also, Southwestern Bell Tel. Co. v. City of El Paso, 243 F.3d 936.
In the present appeal, the District Court had granted summary judgment to SWBT, first, on the grounds that SWBT had authority, pursuant to Texas Utilities Code § 181.082, to lay the fiber optic cable across the EPCWID's ditch because it was laying within the right of way of a public road that crossed the ditch.
Section 181.082 provides that "A telephone or telegraph corporation may install a facility of the corporation along, on, or across a public road, a public street, or public water in a manner that does not inconvenience the public in the use of the road, street, or water."
"The roadways are public, and § 181.082 applies", wrote Judge Higginbotham for a unanimous three judge panel of the Appeals Court. "It is well established in Texas law that § 181.082 and its predecessor statutes grant telephone companies broad powers to install their lines within the rights-of-ways of public roads, and that local governments cannot deny this right."
The Appeals Court added that "it is contrary to the policy of § 181.082 to allow EPCWID to regulate or charge a fee for SWBT's facilities that are within the rights-of-ways of public roads."
The Appeals Court declined to rule on several other grounds upon which it might have also affirmed the District Court. For example, the District Court held, in the alternative, that the EPCWIC's canals and ditches carry waters, which are public waters, which bring the EPCWID's facilities within the scope of § 181.082. The Appeals Court wrote that "This alternative basis is in fact much broader than simply allowing SWBT to utilize the rights-of-ways of public roads to cross EPCWID's facilities since it would allow SWBT to cross EPCWID’s property at any point. Given that the summary judgment evidence before the court concerns only cables laid within the rights-of-ways of public roads, and the fact that there is no guidance from the state courts on this difficult issue, we decline to address this alternative basis to sustain the summary judgment."
Finally, the Appeals Court ducked the Communications Act and constitutional claims. It wrote only that "Because state law provides an adequate basis for deciding the issue, we also decline to consider" the federal claims.
This case is Southwestern Bell Telephone Company v. City of El Paso, El Paso County Water Improvement District, et al., Nos. 02-50825 and 02-50899, appeals from the U.S. District Court for the Western District of Texas.
9/18. Sen. Bill Frist (R-TN), Sen. Charles Grassley (R-IA), Sen. Max Baucus (D-MT), and Sen. Orrin Hatch (R-UT) introduced S 1637, the "Jumpstart Our Business Strength (JOBS) Act". This bill would amend the Internal Revenue Code to bring the U.S. tax laws into compliance with the World Trade Organization (WTO) rulings that the FSC and ETI tax regimes constitute export subsidies. It was referred to the Senate Finance Committee.
People and Appointments
9/18. President Bush nominated Kenneth Karas to be a Judge of the U.S. District Court (SDNY). See, White House release. Karas has been an Assistant U.S. Attorney since 1992. He handles terrorism related cases.
9/18. Microsoft announced that its board of directors proposef the addition of two more directors: Helmut Panke (BMW Bayerische Motoren Werke AG Chairman of the board of management) and Charles Noski (former AT&T Vice Chairman). Before joining AT&T, Noski was COO of Hughes Electronics Corp., a satellite and wireless communications business. The two must be formally elected by the shareholders at their annual meeting in November. The current directors are Bill Gates (Chairman and Chief Software Architect of Microsoft), Steve Ballmer (CEO of Microsoft), James Cash (former professor at the Harvard Business School), Raymond Gilmartin (Ch/P/CEO of Merck & Co.), David Marquardt (general partner of August Capital), Ann Korologos (senior adviser of Benedetto and Gartland & Company Inc.), William Reed (former chairman of Simpson Investment Co.), and Jon Shirley (former P/CEO of Microsoft). See, Microsoft release.
9/18. The National Institute of Standards and Technology (NIST) Computer Security Division (CSD) released its "Pre-Publication Final" draft of its document [13 pages in PDF] titled "Standards for Security Categorization of Federal Information and Information Systems". The E-Government Act of 2002 (Public Law 107-347) tasked the NIST with preparing this set of standards to be used by federal agencies to categorize all information and information systems collected or maintained by or on behalf of each agency based on the objectives of providing appropriate levels of information security according to a range of risk levels. This is Federal Information Processing Standards (FIPS) Publication 199. This document states that public comments are welcome. However, it sets no deadlines.
9/18. Agilent Technologies announced that it and CompUSA "reached a resolution in a dispute over the use of optical sensors supplied by unlicensed manufacturers of Agilent's optical navigation patents. Under the terms of the agreement, CompUSA will discontinue sales of optical computer mice based on the unlicensed technology." See, Agilent release.
9/18. The Federal Trade Commission (FTC) announced that it filed an amended complaint [8 pages in PDF] in U.S. District Court (NDIll) against Brian Westby and others alleging deceptive trade practices in violation of Section 5 of the Federal Trade Commission Act (FTCA), codified at 15 U.S.C. § 45, in connection with their sending spam e-mail that spoofs the return e-mail addresses of others, contains false information in subject lines, and contains false removal information.
FCC Approves SBC's Michigan Long Distance Application
9/17. The Federal Communications Commission (FCC) issued a Memorandum Opinion and Order [109 pages in PDF] approving SBC's Section 271 application to provide in region interLATA service in the state of Michigan. See, FCC release [PDF].
The FCC wrote in its Memorandum Opinion and Order (MOO) that "We also commend Michigan Bell for the significant progress it has made in opening its local exchange market to competition in Michigan. The Michigan Commission states that competitive LECs provide service to 21.7 percent of total lines, including 519,809 business lines and 927,367 residential lines, as of December 2002. Additionally, of the estimated 1,447,176 competitive LEC lines in Michigan, there were 58,617 resold lines, 932,667 lines served via UNE-platform, 264,600 lines served via unbundled network facilities, and an estimated 148,691 lines served over the competitive LECs' own self-provided facilities. We believe that these results reflect the extensive efforts that Michigan Bell has made to open its local exchange markets to competition."
FCC Commissioner Jonathan Adelstein wrote in a separate statement [PDF] that he supports the MOO, but has concerns about "the processes for line splitting, the method by which competitive carriers may offer both voice and DSL services over the same local loop."
Adelstein wrote that "this Order notes concerns raised about line splitting processes in Michigan. To date, Michigan competitors have sparingly used line splitting, but I expect that decisions in the Triennial Review Order will increase demand for line splitting. If competitors are to successfully bring broadband services to the mass market, it is essential that there be effective line splitting processes that can accommodate increasing volumes. I am pleased that SBC is engaged in collaborative testing of new line splitting procedures that would address many of the concerns raised."
This was SBC's fourth application for Michigan. This is WC Docket No. 03-138 and FCC 03-228.
House Republicans Assert That They Are The High Tech Party
9/17. The House Republican High-Tech Working Group (HTWG) hosted an event in the Capitol Building to review its accomplishments, promote its agenda, and assert that when it comes to technology, the Republicans "get it". See, full story.
Rep. Lamar Smith Says House CIIP Subcommittee Won't Revisit DMCA Subpoena Issue
9/17. Rep. Lamar Smith (R-TX), the Chairman of the House Judiciary Committee's Courts, the Internet and Intellectual Property Subcommittee, stated that his subcommittee will not revisit the DMCA subpoena issue.
Internet service providers (ISPs), and especially Verizon and SBC, as well as privacy advocates, have argued that the Congress should revise the subpoena provisions of Section 512(h) of the Digital Millennium Copyright Act (DMCA), which is codified at 17 U.S.C. § 512(h). This is the subpoena provision that enables the Recording Industry Association of America (RIAA) and its member companies to obtain the identities of ISPs' subscribers who they assert are placing copyrighted works on peer to peer file sharing systems.
Rep. Smith (at right) spoke at an event hosted by the Republican High Tech Working Group (HTWG). He stated, in response to a question from a reporter, that "I do not see my subcommittee directly getting involved. As far as DMCA goes, at this point, we don't feel that it needs to be revisited."
Rather, Rep. Smith, as well as Democratic leaders on the Judiciary Committee, are advocating legislation to further protect copyright holders from online infringement. For example, Rep. Smith and others introduced HR 2517, the "Piracy Deterrence and Education Act of 2003" on July 19, 2003. This bill would enhance the government's resources for prosecuting intellectual property crimes, and involve the Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) in educating and warning the public regarding internet based copyright infringement. See, TLJ story titled "House CIIP Subcommittee Holds Hearing on Piracy Deterrence and Education Act", July 17, 2003.
Rep. Howard Berman (D-CA), the ranking Democrat on the Subcommittee, was not present at the September 17 event at which Rep. Smith spoke. He represents a Southern California district, and, like Rep. Smith, has a record of being supportive of the various copyright industries on copyright issues.
See, for example, HR 2752, the "Author, Consumer, and Computer Owner Protection and Security (ACCOPS) Act of 2003", introduced on July 16, 2003 by Rep. Berman and Rep. John Conyers (D-MI), the ranking Democrat on the House Judiciary Committee. This bill would, among other things, criminalize the unauthorized placement of copyrighted works on P2P networks, and criminalize offering certain P2P software without first giving notice of the privacy and security risks. See also, story titled "Conyers and Berman Introduce Bill to Criminalize Placing Copyrighted Works on P2P Networks" in TLJ Daily E-Mail Alert No. 702, July 21, 2003.
Spam Legislation May Move in House
9/17. Rep. Fred Upton (R-MI) stated at a Republican event on September 17 that the House Commerce Committee and the House Judiciary Committee are close to reaching an agreement on spam legislation.
Rep. Upton (at right) stated that "we are on the very verge of seeing an agreement with the Judiciary Committee and the Energy and Commerce Committee, to have an agreement on spam, which costs industry $10 Billion per year. That legislation is very close to being marked up in our committee."
Rep. Upton elaborated that "for the past couple of years we have been in gridlock between jurisdiction between Judiciary and Energy and Commerce. And, we wanted to break that, burst that bubble, this time. We wanted to work together and with Sensenbrenner, and Lamar, and Bob, have been good partners in this, along with Boucher and myself. Burr has the lead on this. And, we are trying to get a bill that doesn't get the angst of one side or the other. And, we are very close to seeing an agreement."
Rep. Upton commented that "There were a couple of different offers on the table."
See, stories titled "House Judiciary Committee Holds Hearing on Spam Bill", "House Commerce Committee Holds Hearing on Spam", and "Spam Bills Pending in the House and Senate" in TLJ Daily E-Mail Alert No. 696, July 11, 2003.
Rep. Upton continued that "we are hopeful that in the next week or two, in fact, we can come to an agreement with all of the parties, and get this bill out of both committees ... and get it up under suspension, and have everybody go for it."
"To do it right, we don't want one committee stopping the other. So, we are very, very close", said Upton. He added that markup will "probably" not take place next week in the House Commerce Committee, but "Judiciary may have mark up next week".
He concluded that "I, personally, would like to see it done, and on the floor, before we break this year." He added that there are "only 15 to 18 legislative days left" in this session of Congress.
6th Circuit Rules Addresses Patent Jurisdiction and Patent Ownership
9/17. The U.S. Court of Appeals (6thCir) issued its opinion in DuPont v. Okuley, a case involving application of collaborative research agreements and employment contracts to patent rights.
John Okuley was a molecular biologist at Washington State University (WSU) who helped discover the genes for an enzyme. MSU had a collaborative research agreement with DuPont under which DuPont was assigned all intellectual property rights (IPR) obtained in the collaboration. Okuley also signed an agreement with DuPont assigning the IPR in dispute. Okuley asserts that he made his discovery while working in an Ohio State University (OSU) laboratory. And, OSU has waived any claims. Okuley did not cooperate with DuPont in its application for a patent on the enzyme.
DuPont filed a complaint in U.S. District Court (SDOhio) against Okuley seeking specific enforcement of the agreement, and a declaration that it was the owner of the IP. Okuley counterclaimed for a declaration that he was the inventor, and to rescind his personal assignment of patent rights to DuPont. The District Court held that it had no jurisdiction to determine inventorship, and granted summary judgment to DuPont on all other issues.
Okuley appealed to the U.S. Court of Appeals for the Sixth Circuit, not the Federal Circuit. The Appeals Court first addressed the Federal Circuit's has exclusive jurisdiction in patent appeals. It held that a regional circuit court has jurisdiction to determine ownership of a patent right, like ownership of any other property, but that it lacks jurisdiction to determine inventorship. The Court held that "As DuPont"s assignment theory sounded in contract, not patent law, DuPont's claim to the sole ownership of the gene did not invoke patent law jurisdiction. Therefore, appellate jurisdiction lies with this court."
The Appeals Court affirmed the District Court's holding that it lacked jurisdiction to determine inventorship. The patent application was pending before the U.S. Patent and Trademark Office (USPTO) when the District Court ruled. The Appeals Court wrote that "While the patent is still in the process of gestation, it is solely within the authority of the Director. As soon as the patent actually comes into existence, the federal courts are empowered to correct any error that the Director may have committed. Such a scheme avoids premature litigation and litigation that could become futile if the Director declined to grant a patent or voluntarily acceded to the claims of the would-be inventor prior to issue. We conclude, therefore, that the district court lacked jurisdiction to review the inventorship of an unissued patent."
The Appeals Court then addressed the issue of ownership, to which it applied state law. It wrote that the WSU faculty manual, which was a part of Okuley's employment contract, gave WSU "ownership in patents and other non-patentable intellectual products ... developed by its employees as a result of their employment". The Court ruled that Okuley's contract with WSU and assignment to DuPont were unaffected by OSU or its waiver. It rejected other arguments made by Okuley, and affirmed the District Court's holding that DuPont is the owner of the IP in question.
This case is E.I. DuPont de Nemours & Company v. John Joseph Okuley, U.S. Court of Appeals for the 6th Circuit, No. 01-3074, an appeal from the U.S. District Court for the Southern District of Ohio, at Columbus, D.C. No. 97-01205, Judge John Holschuh presiding.
9/17. Sen. Hillary Clinton (D-NY), Sen. Elizabeth Dole (R-NC), Sen. Maria Cantwell (D-WA), Sen. Bob Bennett (R-UT), Sen. Jeff Bingaman (D-NM), Sen. Patty Murray (D-WA), and Sen. Mary Landrieu (D-LA) introduced S 1630, a bill to facilitate nationwide availability of 211 telephone service for information and referral services. It was referred to the Senate Commerce Committee.
9/17. Sen. Saxby Chambliss (R-GA) introduced S 1635, a bill to amend the Immigration and Nationality Act regarding the issuance of L-1 visas for intracompany transferees. It was referred to the Senate Judiciary Committee.
People and Appointments
9/17. The Senate confirmed Sandra Feuerstein to be a Judge of the U.S. District Court (EDNY) by a vote of 92-0. See, Roll Call No. 353.
9/17. The Senate confirmed David Proctor to be a Judge of the U.S. District Court (NDAla) by a vote of 92-0. See, Roll Call No. 352.
9/17. The Senate confirmed Stephen Robinson to be a Judge of the U.S. District Court for the Southern District of New York. See, Congressional Record, September 17, 2003, at S11623.
9/17. The Senate confirmed Kevin Castel to be a Judge of the U.S. District Court for the Southern District of New York. See, Congressional Record, September 17, 2003, at S11623.
9/17. The Senate confirmed Richard Howell to be a Judge of the U.S. District Court for the Southern District of New York. See, Congressional Record, September 17, 2003, at S11623.
9/17. The House passed HR 49, the "Internet Tax and Nondiscrimination Act" under suspension of the rules by voice vote. This bill would permanently extend the moratorium on taxes on internet access and multiple or discriminatory taxes on electronic commerce. The full Senate has yet to pass its version of the bill. See, TLJ story titled "House Judiciary Committee Approves Internet Tax Bill", July 16, 2003, and story titled "Senate Commerce Committee Approves Bill to Extend Internet Tax Moratorium" in TLJ Daily E-Mail Alert No. 709, August 1, 2003.
9/17. The House Government Reform Committee's Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census held a hearing titled "Should the Common Criteria be Applied to ALL Government Software Purchases?" See, prepared testimony [PDF] of Edward Roback, Chief of the Computer Security Division (CSD) at the National Institute of Standards and Technology (NIST).
9/17. The Department of Commerce (DOC) and the Internet Corporation for Assigned Names and Numbers (ICANN) entered into a Memorandum of Understanding (MOU) that extends for three years the DOC's agreement with the ICANN. The current agreement was scheduled to expire on September 30, 2003.
9/17. Most House and Senate events scheduled for September 18 and 19 have been postponed.
9/17. The U.S. District Court (DC) announced that it will be closed on September 18.
9/17. The Federal Communications Commission (FCC) announced that the FCC will be closed on September 18, and that "The FCC web site, including our webcasts, e-filing and licensing applications, may be unavailable to the public intermittently on Thursday, September 18th and Friday, September 19th, depending on the severity of Hurricane Isabel's impact on the local area."
Senate Passes Resolution to Block FCC Changes to Media Ownership Rules
9/16. The Senate passed SJRes 17 by a vote of 55-40. See, Roll Call No. 348. This is a legislative veto of the Federal Communications Commission's (FCC) media ownership order of June 2, 2003. The House has not passed this resolution.
This resolution provides that it is "Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Federal Communications Commission relating to broadcast media ownership (Report and Order FCC 03-127, received by Congress on July 10, 2003), and such rule shall have no force or effect." (Parentheses in original.)
This pertains to the FCC's June 2, 2003 Report and Order and Notice of Proposed Rulemaking [257 pages in PDF] amending its media ownership rules. See, story titled "FCC Announces Revisions to Media Ownership Rules" in TLJ Daily E-Mail Alert No. 672, June 3, 2003.
Sen. Byron Dorgan (D-ND) (at left) introduced this resolution on September 11, 2003. He stated in the Senate that "There is a provision in Federal law that allows the Congress to effectively veto a rule offered by a Federal agency under certain circumstances. This is called the Congressional Review Act. I call it a legislative veto. It is rarely used. In fact, this is only the second occasion on which it will be used. It requires 35 signatures of Senators to discharge a proposition from a committee and bring it to the Senate floor, with 10 hours of debate. Following the 10 hours of debate, there is then a vote on the resolution of disapproval." See, Congressional Record, September 11, 2003, at S11383.
Previously, on June 19, 2003, the Senate Commerce Committee approved S 1046, the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003". This bill rolls back the FCC's announced changes pertaining to the national broadcast TV multiple ownership cap, and the cross ownership limits. It also changes the biennial review language of the Telecom Act of 1996 that the Circuit Court has relied upon in remanding FCC media ownership rules.
See, story titled "Senate Commerce Committee Passes Media Ownership Bill" in TLJ Daily E-Mail Alert No. 685, June 20, 2003.
Also, on September 4, 2003, the Senate Appropriations Committee approved S 1585, the fiscal year 2004 Commerce, Justice, State, and the Judiciary (CJS) appropriations bill with a manager's amendment that includes a provision that prohibits the use of funds to grant licenses for a commercial TV broadcast station if the granting of that license would result in such party having an aggregate national audience reach exceeding 35%. This has the effect, during fiscal year 2004, of reversing the FCC's recently announced change to the national TV ownership cap. However, unlike SJRes 17, this bill applies only to one portion of the FCC's June 2, 2003 report and order.
See, stories titled "Senate Appropriations Committee Marks Up CJS Bill" and "Senate Appropriations Bill Prevents FCC From Implementing New National TV Ownership Rule", September 4, 2003, also published in TLJ Daily E-Mail Alert No. 733, September 5, 2003.
Unlike the two previous committee considerations of measures pertaining to media ownership, which received bipartisan support, SJRes 17 was passed by a vote that closely followed party lines. Almost all of the Democrats supported resolution. Most Republicans opposed it.
Only two Democrats voted against the resolution: Sen. John Breaux (D-LA) and Sen. Zell Miller (D-GA). Several other Democrats who are off running for President missed the vote. Sen. Lamar Alexander (R-TN), Sen. Wayne Allard (R-CO), Sen. Susan Collins (R-ME), Sen. Elizabeth Dole (R-NC), Sen. Mike Enzi (R-WY), Sen. Kay Hutchison (R-TX), Sen. Trent Lott (R-MS), Sen. Pat Roberts (R-KS), Sen. Richard Shelby (R-AL), Sen. Olympia Snow (R-ME), and Sen. George Voinovich (R-OH) voted for the resolution.
Sen. Dorgan issued a release after the vote in the Senate that states that "there are sufficient votes in the House to pass it, but that House leaders have indicated they may try to block it".
However, Rep. Billy Tauzin (R-LA), the Chairman of the House Commerce Committee, which has jurisdiction over telecommunications, rebutted this assertion.
Rep. Tauzin (at right) stated in a release that "The House of Representatives has thoroughly debated -- and soundly defeated -- an earlier attempt to roll back key provisions of the FCC's new media ownership rules. What's more, based on today's vote, there clearly is not enough support in the Senate to override a threatened presidential veto. It's time for Congress to move on. I will vigorously resist any attempts to revisit these issues this year."
On July 23, 2003, the House passed HR 2799, the "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act for Fiscal Year 2004", by a vote of 400-21. This contains the same provision as the Senate Appropriations Committee bill. See, Roll Call No. 422. See, story titled "House Passes CJS Bill With Media Ownership Section" in TLJ Daily E-Mail Alert No. 705, July 28, 2003.
Rep. Tauzin referred to an amendment offered by Rep. Maurice Hinchey (R-NY) that would have prohibited the use of funds to grant, transfer or assign certain broadcast licenses, unless certain ownership conditions are met. The amendment would have had the effect of preventing the FCC from fully implementing, during FY 2004, the newspaper broadcast cross ownership and local TV multiple ownership rule provisions of its new media ownership rules.
It failed by a vote of 174-254. See, Roll Call No. 407. The vote correlated with party affiliation. 34 Republicans voted for the amendment, and 194 voted against. 139 Democrats voted for the amendment, and 60 voted against. See, story titled "House Begins Consideration of CJS Bill" in TLJ Daily E-Mail Alert No. 704, July 23, 2003.
FCC Chairman Michael Powell issued a statement. He wrote that "This resolution, if passed by the House and signed by the president, would only muddy the media regulatory waters. It would bring no clarity to media regulation, only chaos. It would create perverse results, such as a return to looser radio rules permitting greater consolidation. This is a harm the FCC’s new media rules were designed to avoid. It would also reinstate ownership rules that were overturned by the courts. Under the terms of the resolution, the FCC would be forbidden from reissuing any substantially similar rules. In short the agency would be powerless to cure the infirmities identified by the court."
"What is most important is to have the best policies for the American people. I hope the House will take a more considered view of the public interest", said Powell.
Presidential Directive Creates Terrorist Screening Database
9/16. President Bush issued Homeland Security Presidential Directive/Hspd-6. It directs the Attorney General to develop a single terrorist screening database to support various federal, state and local screening processes. Also on September 16, the Department of Homeland Security (DHS), Federal Bureau of Investigation (FBI), Department of State, and Central Intelligence Agency (CIA) announced the establishment of a Terrorist Screening Center (TSC).
The Presidential Directive states that its purpose is to "To protect against terrorism it is the policy of the United States to (1) develop, integrate, and maintain thorough, accurate, and current information about individuals known or appropriately suspected to be or have been engaged in conduct constituting, in preparation for, in aid of, or related to terrorism (Terrorist Information); and (2) use that information as appropriate and to the full extent permitted by law to support (a) Federal, State, local, territorial, tribal, foreign-government, and private-sector screening processes, and (b) diplomatic, military, intelligence, law enforcement, immigration, visa, and protective processes."
It provides that "The Attorney General shall establish an organization to consolidate the Government's approach to terrorism screening and provide for the appropriate and lawful use of Terrorist Information in screening processes."
It further provides that "The heads of executive departments and agencies shall, to the extent permitted by law, provide to the Terrorist Threat Integration Center (TTIC) on an ongoing basis all appropriate Terrorist Information in their possession, custody, or control. The Attorney General, in coordination with the Secretary of State, the Secretary of Homeland Security, and the Director of Central Intelligence shall implement appropriate procedures and safeguards with respect to all such information about United States persons. The TTIC will provide the organization referenced in paragraph (1) with access to all appropriate information or intelligence in the TTIC's custody, possession, or control that the organization requires to perform its functions."
The DHS stated in a release that the TSC will "consolidate terrorist watchlists and provide 24/7 operational support for thousands of federal screeners across the country and around the world. The Center will ensure that government investigators, screeners and agents are working off the same unified, comprehensive set of anti-terrorist information - and that they have access to information and expertise that will allow them to act quickly when a suspected terrorist is screened or stopped."
The DHS added that "The new TSC is a multi-agency center, anchored by the Departments of Justice, Homeland Security, and State, and the Intelligence Community, and administered by the FBI. The mission to develop the technical capability for watchlist integration has been underway at the FBI's Foreign Terrorist Tracking Task Force (FTTTF), where TSC operations will be phased in during the coming weeks and operational by December 1, 2003. The TSC was established today by a Presidential directive to the heads of all departments and agencies (Homeland Security Presidential Directive 6, or ``HSPD 6´´)."
The DHS stated in a second release that "The TSC will receive the vast majority of its information about known or suspected terrorists from the TTIC after TTIC has assembled and analyzed that information from a wide range of sources. In addition, the FBI will provide the TSC with information about purely domestic terrorism, i.e., having no connection to international terrorist activities. The TSC will consolidate this information into an unclassified terrorist screening database and make the database accessible to queries for federal, state, and local agencies for a variety of screening purposes."
SEC Files Petition to Block Vivendi Payment to Ex-CEO Messier
9/16. The Securities and Exchange Commission (SEC) filed a petition in U.S. District Court (SDNY) against Vivendi Universal pursuant to Section 1103 of the Sarbanes Oxley Act seeking an order requiring Vivendi to place in escrow "extraordinary payments" that Vivendi may be likely to make to its former CEO, Jean-Marie Messier.
This pertains to a disputed severance package. Vivendi opposes making the payment at issue to Messier, but has been ordered by a state court to make payment.
HR 3763 (107th Congress), the "Sarbanes Oxley Act of 2002", was enacted in 2002. It became Public Law No. 107-204. Section 1103 of the Act amends Section 21C(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78u-3(c)) by adding a new subsection regarding the issuance of temporary freezes.
This new provision provides, in part, that "Whenever, during the course of a lawful investigation involving possible violations of the Federal securities laws by an issuer of publicly traded securities or any of its directors, officers, partners, controlling persons, agents, or employees, it shall appear to the Commission that it is likely that the issuer will make extraordinary payments (whether compensation or otherwise) to any of the foregoing persons, the Commission may petition a Federal district court for a temporary order requiring the issuer to escrow, subject to court supervision, those payments in an interest-bearing account for 45 days."
The SEC stated in a release that SEC "staff has been investigating possible violations of the federal securities laws by Vivendi and its directors, officers, partners, controlling persons, agents, or employees pursuant to a formal order of private investigation issued by the Commission on November 14, 2002."
The SEC release adds that "On September 11, 2003 a New York court affirmed an arbitration panel decision ordering Vivendi to pay Messier €20,555,342 (or approximately $23 million) pursuant to a termination agreement with Vivendi. The SEC's application requests that the United States District Court order Vivendi to place in escrow, subject to court supervision, the money that Messier is claiming."
See also, Vivendi release regarding the arbitration panel decision. It states that "The New York State Court issued its order following the Vivendi Universal's motion to vacate the award rendered by the Arbitration panel. The New York tribunal denied Vivendi Universal's motion and ordered the company to pay € 20,5 million to Mr Messier. Vivendi Universal intends to use all legal options in order to oppose a payment to Mr Messier including appeal and a request to stay enforcement of the judgment pending the appeal".
This case is Securities and Exchange Commission v. Vivendi Universal, S.A., D.C. No. M-11-03.
9/16. Rep. Robert Andrews (D-NJ) introduced HR 3089, a bill to establish a grant program, to be administered by the Department of Commerce, to assist state and local governments in obtaining broadband infrastructure, computers, and software to facilitate the conduct of electronic governance transactions at libraries and elementary and secondary schools. It was referred to the House Commerce Committee.
People and Appointments
9/16. Securities and Exchange Commission (SEC) Chairman William Donaldson appointed Matthew Rees to be Chief Speechwriter and Senior Adviser to the Chairman. Rees has previously been a speech writer at the White House and the Office of the U.S. Trade Representative. Before that, he worked as a journalist at The Weekly Standard, The Economist, The New Republic, and The Wall Street Journal. See, SEC release.
9/16. The Federal Communications Commission (FCC) published a notice in the Federal Register that summarizes its report and order that requires that digital wireless phones be capable of being effectively used with hearing aids. The FCC adopted this order on July 10, 2003, and released it on August 14, 2003. This is WT Docket No. 01-309 and FCC 03-168. The effective date of the report and order is November 17, 2003. See, Federal Register, September 16, 2003, Vol. 68, No. 179, at Pages 54173 - 54176.
9/16. The Executive Office of the President's (OEP) Office of Science and Technology Policy's (OSTP) National Science and Technology Council's (NSTC) Committee on Science's Subcommittee on Research Business Models published a notice in the Federal Register announcing a series of public meetings around the U.S. regarding the policies, procedures, and plans relating to the business relationship between federal agencies and research performers. The subcommittee will meet on October 27 at the Lawrence Berkeley National Laboratory in Berkeley, California, on November 12 at the University of Minnesota in Minneapolis, Minnesota, on November 17 at the University of North Carolina in Chapel Hill, North Carolina, and on December 9-10 at the Department of Agriculture in Washington DC. The subcommittee requests public presentations at these meetings, and written comments. For more information contact Michael Holland at 202 456-6130. See, Federal Register, September 16, 2003, Vol. 68, No. 179, at Pages 54225 - 54226. The subcommittee also published a second notice in the Federal Register extending until October 6 its deadline to summitting written comments. See, original notice in the Federal Register, August 6, 2003, Vol. 68, No. 151, at Pages 46631 - 46632, and notice of extension in the Federal Register, September 16, 2003, Vol. 68, No. 179, at Pages 54226 - 54227.
Go to News from September 11-15, 2003.