Senate Approves ORBIT Act Amendments

4/29. Sen. Conrad Burns (R-MT) introduced S 976, a bill to further amend the "Open-market Reorganization for the Betterment of International Telecommunications Act", which is also known as the ORBIT Act. The Senate approved the bill, by unanimous consent, without debate. See, Congressional Record, April 28, 2005, at Page S4607.

The bills repeals Section 623 of the ORBIT Act, which is codified as 47 U.S.C. § 763b. It is titled "Specific criteria for INTELSAT separated entities".

The bill replaces Section 624 of the ORBIT Act, which is codified as 47 U.S.C. § 763c. It is titled "Specific criteria for Inmarsat". The bill replaces the current language with the following: "In securing the privatization of Inmarsat required by section 621, and thereafter, the United States shall preserve space segment capacity of the GMDSS."

The bill modifies Section 621(5)(D) of the ORBIT Act, which is codified at 47 U.S.C. § 763. It modifies the restrictions on who can be directors or officers of successor or separate entities. It removes the the language prohibiting those who "have any direct financial interest".

The bill also requires the Federal Communications Commission (FCC) to report to the Congress annually on competitive market conditions with respect to domestic and international satellite communications services.

S 976 was approved on April 29, but as a part of the legislative day for April 28. The ORBIT Act is Public Law No. 106-180. It was enacted in 2000.

USTR Releases 2005 Special 301 Report

4/29. The Office of the U.S. Trade Representative (USTR) released its 2005 Special 301 Report [65 pages in PDF]. See also, Executive Summary [13 pages in PDF]. This report, among other things, elevates the People's Republic of China to the Priority Watch List. It has long been on the USTR's Priority Foreign Country List. See, full story.

Senators Write Bush Regarding IPR Violations by the PR China

4/29. The twenty members of the Senate Finance Committee, which has jurisdiction over trade issues, wrote a letter [PDF] to President Bush "to express our serious concern with the lack of adequate and effective enforcement of China’s intellectual property rights (IPR) laws". They urge the President to initiate proceedings before the World Trade Organization (WTO).

They wrote that "IPR infringement in China is having a real impact on U.S. companies in a wide range of industries, including motion pictures, software, chemicals, pharmaceuticals, information technology, and consumer goods. According to certain estimates, piracy alone accounts for roughly $2.5 to $3.8 billion in losses to the U.S. industry."

They added that "We need to see immediate results to eradicate these problems in China. Unfortunately, the Chinese government does not seem fully committed to doing so. Recently, the Chinese government issued a white paper, which praised China's progress on IPR issues. The paper noted that, ``while adhering to the international rules on IPR protection, China has decided on a level of IPR protection appropriate for its own national situation.” China cannot unilaterally establish its own measures for judging its success in dealing with its IPR crisis. Instead, as a signatory to the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), Chinese progress must be judged by the same standards all WTO Members."

Finally, they urged the Bush administration "to intensify your efforts to ensure China’s compliance with its TRIPS obligations, including, as appropriate, through WTO dispute settlement."

In addition, Rep. Mary Bono (R-CA), Rep. Chip Pickering (R-MS), and many other Representatives wrote a similar letter to President Bush. See, Rep. Bono's release.

People and Appointments

4/29. Federal Communications Commission (FCC) Chairman Kevin Martin announced his intent to name Tom Navin to be the Chief of the FCC's Wireline Competition Bureau (WCB). Navin is currently Chief of the Wireline Competition Bureau's (WCP) Competition Policy Division (CPD). Before that, he was Deputy Chief of the CPD. Before going to work for the FCC, he worked for the law firm of McDermott Will & Emery. See, FCC release [PDF].

4/29. FCC Chairman Kevin Martin announced his intent to name Kris Monteith to be Chief of the FCC's Enforcement Bureau. She is currently the Deputy Bureau Chief of the Consumer and Governmental Affairs Bureau for Outreach and Intergovernmental Affairs. Before going to work for the FCC in 1997, she worked for the law firms of McDermott Will & Emery and Keller & Heckman. See, FCC release [PDF].

4/29. FCC Chairman Kevin Martin announced his intent to name Monica Desai to be Chief of the FCC's Consumer and Governmental Affairs Bureau. She has worked at the FCC since 1999. She previously worked for the law firm of Sonnenschein Nath & Rosenthal. See, FCC release [PDF].

4/29. FCC Chairman Kevin Martin announced his intent to name Daniel Gonzalez (at right) to be FCC Chief of Staff. Gonzalez is currently Martin's Senior Legal Advisor and Wireline Advisor since February of 2002. He has also worked in the Common Carrier Bureau's Policy and Program Planning Division and the Accounting and Audits Division. He also worked for former FCC Commissioner Rachelle Chong. He also worked as VP of External and Regulatory Affairs for XO Communications. See, FCC release [PDF].

4/29. FCC Chairman Kevin Martin announced his intent to name Michelle Carey to be his Legal Advisor for Wireline Issues. Carey is the Deputy Chief of the FCC's Wireline Competition Bureau (WCB). She was previously Chief of the WCB's Competition Policy Division (CPD). The FCC wrote in a release [PDF] that "she managed rulemaking proceedings concerning a variety of issues including local competition, broadband, and IP-enabled services. She also supervised numerous adjudicatory proceedings, including applications by the regional Bell companies to provide long-distance service and wireline telecommunications mergers."

4/29. FCC Commissioner Jonathan Adelstein named Rudy Brioché to be his Legal Advisor on media issues. Brioché previously worked for Sen. Frank Lautenberg (D-NJ), a member of the Senate Commerce Committee. Before that, he was Washington Bureau Counsel for the National Association for the Advancement of Colored People (NAACP). See, FCC release [PDF].

4/29. FCC Commissioner Jonathan Adelstein named Amber Danter to be his Confidential Assistant. She previously worked for former Sen. Tom Daschle (D-SD). See, FCC release [PDF].

More News

4/29. The Federal Communications Commission (FCC) adopted, but did not release, a Report and Order regarding the mandatory electronic filing for international telecommunications services. The FCC issued a short release [PDF] that describes this item. It states that this requirement will take effect in several phases, and will apply to applications and associated filings in connection with § 214 authorizations, cable landing licenses, accounting rate changes, assignment of data network identification codes, recognized operating agency status, assignment of an international signaling point code, and foreign carrier notifications. This item is FCC-05-91 in IB Docket No. 04-426.

4/29. The Federal Communications Commission (FCC) adopted, but did not release, a First Report and Order and Order on Reconsideration and Notice regarding directory assistance information. This item pertains to clarification and/or reconsideration of the Subscriber List Information (SLI)/Directory Assistance (DA) First Report and Order, and SLI/DA Order on Reconsideration and Notice. The FCC wrote in a short release [PDF] describing this item that the FCC denied a petition filed by BellSouth and SBC "seeking reconsideration of rules that bar them from imposing restrictions on the use by competitors of directory assistance information competitors obtain from the LECs under the Communications Act. Section 251(b)(3) of the Act requires that LECs provide nondiscriminatory access to directory assistance, and the Commission has determined that this permits competitors to have the same access to directory assistance information that the LECs provide to themselves." The FCC release adds that "a LEC must not provide access to numbers that are unlisted at the customer’s request.", and that "competitors are required to abide by other state and federal laws and regulations governing use of these data". It also states that the FCC "rejected SBC and BellSouth’s argument that LECs should not be required to provide access to local listings that were obtained from third parties. Even though the Commission has declined to require LECs to provide nondiscriminatory access to nonlocal directory assistance data, it has consistently required nondiscriminatory access to all of their local directory assistance database listings." This item is FCC 05-93 in CC Docket Nos. 96-115, 96-98, and 99-273.

4/29. The Federal Communications Commission (FCC) adopted, but did not release, a notice of proposed rulemaking (NPRM) to implement satellite broadcast carriage requirements in the noncontiguous states, as required by Section 210 of the Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA). The FCC issued a short release [PDF] that describes this item. It states that the NPRM "seeks public comment on a number of issues, such as whether the term ‘noncontiguous states’ includes territories and possessions such as Puerto Rico and Guam, as well as Alaska and Hawaii. It also seeks comment on the interpretation that satellite carriers' obligation to carry local stations' signals extends to the whole broadcast signal, including multicast digital signals and high definition signals. The proposed rules establish two deadlines for local stations to elect mandatory carriage or retransmission consent: October 1, 2005, for analog signals, and April 1, 2007, for digital signals." The Congress included the SHVERA in the huge omnibus appropriations bill, HR 4818 (108th Congress), that it enacted late last year. Section 210 amended 47 U.S.C. § 338(a). This item is FCC 05-92 in Docket 05-181.

4/29. The U.S. Patent and Trademark Office (USPTO) announced that its new electronic facility for hearing patent appeals before the Board of Patent Appeals and Interferences (BPAI) and appeals and contested cases before the Trademark Trial and Appeal Board (TTAB) is now operational. The new facility, named the "Electronic Hearing Room", allows attorneys to participate remotely, either by obtaining the necessary equipment and software, or by using facilities at Patent and Trademark Depository Libraries in Sunnyvale, California, Detroit, Michigan, or College Station, Texas. See, USPTO release.

House Crime Subcommittee Begins Oversight Hearings On PATRIOT Act

4/28. The House Judiciary Committee's (HJC) Subcommittee on Crime Terrorism, and Homeland Security held oversight hearings on Thursday, April 21, Tuesday, April 26, and twice on Thursday, April 28. It will hold more hearings on Tuesday, May 3, and Thursday, May 5.

This article, and related articles in this issue, cover those portions of these hearings that pertained to electronic surveillance and new technologies. The HJC is taking a methodical section by section approach, seeking government public input, and government explanations of how it is implementing each section. The Department of Justice (DOJ) is cooperating to the extent that it is sending witnesses. However, government witnesses have been evasive or non-responsive on many issues raised by members of the Subcommittee.

Government witnesses are using the hearing to advocate permanent extension of the sunsetting provisions of the PATRIOT Act. They are also highlighting the threats of terrorism, and the dedication of government personnel fighting terrorism.

To bolster their case for extension of § 215 (which may it easier for the FBI to acquire business records, including library records) and of all sunsetting sections of the PATRIOT Act, the government disclosed for the first time at a hearing on April 28 that 9/11 hijackers had used library computers in the U.S.

Rep. Howard Coble (R-NC) (at right), the Chairman of the Crime Subcommittee, wrote in his opening statement on April 21 that "Our Nation has a dependency problem -- one that we need to nurture and protect. That dependency is on technology. Computers and related technology have improved every aspect of our lives -- our health care, our education, and our security, just to name a few. This same technology also aids those who threaten our Nation, as it facilitates terrorists and criminals alike. At the stroke of a key, someone can cause millions of dollars of damage to our economy or shut down the 9-1-1 systems of our emergency responders. The threat has grown with the benefits of and dependency on technology."

Several Republican members of the Subcommittee, especially Rep. Dan Lungren (R-CA), are defending the DOJ and the PATRIOT Act. Several Democrats are criticizing the PATRIOT Act.

Rep. William Delahunt (D-MA) stated on April 21 that the two issues are "privacy" and "transparency". "People like myself really don't know what is happening", said the former state prosecutor. But, there is a "profound unease that something is happening". He added that "if you don't have the right to privacy that is the beginning of totalitarianism".

On April 28 he stated that these hearings would not be taking place if there were no sunset clause. Hence, he argued that when the Congress passes legislation to address the present sunset clause, it should enact a further sunset provision. He argued that this sunsetting gives the Congress "leverage" to conduct oversight of how the DOJ is implementing the PATRIOT Act.

The government surveillance system, said Rep. Delahunt, "needs more than just checks and balances with the executive branch". It needs effective Congressional oversight. Hence, he suggested sunsetting the entire PATRIOT Act.

Rep. Jeff Flake (R-AZ), who is turning out to be the Republican member of the Subcommittee who is the most skeptical of the PATRIOT Act, and the DOJ's implementation of it, stated at a news conference on April 28 that the Congress should have sunsetted the entire PATRIOT Act in 2001.

History of the USA PATRIOT Act. The USA PATRIOT Act is an acronym for "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001". The 107th Congress enacted this bill quickly after the terrorist attacks of September 11, 2001. It was HR 3162. It became Public Law 107-56 on October 26, 2001.

The bill was approved by the House on October 24, 2001 by a vote of 357-66. See, Roll Call No. 398. Three Republicans and sixty-two Democrats voted against the bill.

Much of Title II of the PATRIOT Act pertains to electronic surveillance affecting new technologies. § 224 of the PATRIOT Act provides that many of the provisions of Title II sunset at the end of 2005, unless extended. These hearings address the sunsetting provisions. However, there are also many proposals to modify or repeal other sections of the PATRIOT Act that are not scheduled to sunset.

See, table in this issue titled "Summary of Title II of the PATRIOT Act".

The HJC committee is proceeding methodically, taking a few provisions at a time. Government witnesses are testifying at each hearing, along with a smaller number of critical witnesses.

Schedule of Hearings. The full Committee held a hearing on April 6, 2005. See, story titled "House Judiciary Committee Holds Hearing on PATRIOT Act" in TLJ Daily E-Mail Alert No. 1,112, April 11, 2005.

The Crime Subcommittee held its first hearing on April 21. That hearing addressed three sections of the PATRIOT Act that are scheduled to sunset:

• § 209, titled "Seizure of voice-mail messages pursuant to warrants".
• § 217, titled "Interception of computer trespasser communications".
• § 220, titled "Nationwide service of search warrants for electronic evidence".

The Subcommittee heard testimony from, and questioned, four witnesses on April 21.

• Laura Parsky, one of five Deputy Assistant Attorneys General in the DOJ's Criminal Division. See, prepared testimony [20 pages in PDF].
• Steven Martinez, Deputy Assistant Director of the FBI's Cyber Division. See, prepared testimony.
• Jim Dempsey, Executive Director of the Center for Democracy and Technology. See, prepared testimony [PDF].
• Peter Swire, Professor of Law at Ohio State University. See, prepared testimony [12 pages in PDF].

The April 26 hearing addressed five sections that are scheduled to sunset:

• § 204, titled "Clarification of Intelligence Exceptions from Limitations on Interception & Disclosure of Wire, Oral & Electronic Communications".
• § 207, titled "Duration of FISA Surveillance of Non-United States persons who are Agents of a Foreign Power".
• § 214, titled "Pen Register and Trap and Trace Authority Under FISA".
• § 225, titled "Immunity for Compliance with FISA Wiretap".
• § 6001 and 6002 of the Intelligence Reform and Terrorism Prevention Act regarding lone wolf terrorists.
• The agenda did not include § 216, titled "Modification of authorities relating to use of pen register and trap and trace devices". However, it was discussed also. It is not scheduled to sunset.

The Subcommittee heard testimony from, and questioned, three witnesses on April 26:

• Mary Beth Buchanan, U.S. Attorney for the Western District of Pennsylvania. See, prepared testimony [PDF].
• James Baker, Counsel for Intelligence Policy at the DOJ. See, prepared testimony [PDF].
• Suzanne Spaulding, Managing Director of the Harbour Group

The Thursday, April 28, 9:30 AM hearing addressed two sections:

• § 206, titled "Roving Surveillance Authority Under the Foreign Intelligence Surveillance Act of 1978".
• § 215, titled "Access to Records and Other Items Under the Foreign Intelligence Surveillance Act".
• The agenda did not include the use of national security letters or § 505. However, these were discussed.

The Subcommittee heard testimony from, and questioned, three witnesses at the 9:30 AM hearing on April 26.

• Kenneth Wainstain, interim U.S. Attorney for the District of Columbia.
• James Baker, Counsel for Intelligence Policy at the DOJ.
• Robert Khuzami, former Assistant U.S. Attorney for the Southern District of New York.
• Gregory Nojeim (ACLU).

The Thursday, April 28, 2:30 PM hearing addressed one section:

• § 218, titled "Foreign Intelligence Information".

The Subcommittee heard testimony from, and questioned, four witnesses at the 9:30 AM hearing on April 26.

• Patrick Fitzgerald, U.S. Attorney for the Northern District of Illinois.
• David Kris, Time Warner (and former DOJ attorney).
• Kate Martin, Center for National Security Studies.
• Peter Swire, Professor of Law at Ohio State University.

The Subcommittee will hold a hearing on Tuesday, May 3. This hearing will address:

• § 201, titled "Authority to intercept wire, oral, and electronic communications relating to terrorism".
• § 202, titled "Authority to intercept wire, oral, and electronic communications relating to computer fraud and abuse offenses".
• § 223, titled "Civil liability for certain unauthorized disclosures".
• § 213, titled "Authority for delaying notice of the execution of a warrant" (which is also known as sneak and peak).

The Subcommittee will hold a hearing on Thursday, May 5. This hearing will address:

• § 212, titled "Emergency disclosure of electronic communications to protect life and limb".

Members of the Crime Subcommittee. The Crime Subcommittee has 16 members, 10 Republicans and 6 Democrats.

Rep. Dan Lungren (R-CA) has taken on the roll of actively defending the DOJ and PATRIOT Act. To a certain degree, Rep. Steve Chabot (R-OH), Rep. Mike Pence (R-IN), and Rep. Louie Gohmert (R-TX) have done the same.

Rep. Howard Coble (R-NC) and Rep. Jeff Flake (R-AZ) are engaging in diligent oversight, asking detailed questions that seek information relevant to concerns that have been raised by Members of Congress, legal scholars, interest groups, reporters and constituents. In addition, Rep. Coble, the Chairman of the Subcommittee, is allowing both critics and defenders of the PATRIOT Act latitude to pursue their lines of questioning, by allowing extensions of time, and second rounds of questioning.

Outside of the hearing room, Rep. Flake (at right) is also expressing criticism of the PATRIOT Act. For example, on April 28 a new caucus named the "Patriot Act Reform Caucus" held a news conference to announce its formation. Rep. Flake is one of the chairs of the caucus. The other participants in the news conference were Rep. Butch Otter (R-ID), Rep. Ron Paul (R-TX), Rep. Bernie Sanders (I-VT), and Rep. Jerrold Nadler (D-NY). Only Rep. Flake is a member of the Crime Subcommittee. Although, Rep. Nadler is a member of the full Committee.

Rep. Bobby Scott (D-VA), the ranking Democrat on the Subcommittee, Rep. John Conyers (D-MI), the ranking Democrat on the full Committee, and Rep. William Delahunt (D-MA) are asking tough questions, and expressing criticisms of parts of the PATRIOT Act. Rep. Scott has been constantly present throughout the hearings. Rep. Delahunt has been present throughout most of the hearings.

Rep. Maxine Waters (D-CA) and Rep. Sheila Lee (D-TX) have been making brief appearances at the hearings to offer pointed criticisms of the PATRIOT Act and the DOJ.

Rep. Mark Green (R-WI), Rep. Ric Keller (R-FL), Rep. Randy Forbes (R-VA), and Rep. Tom Feeney (R-FL) have each played little or no role in the Subcommittee hearings so far.

Rep. Anthony Weiner (D-NY) is not participating. He voted for the PATRIOT Act in 2001. Although, he offered harsh words about the DOJ when Attorney General Alberto Gonzales testified on April 6, 2005. Rep. Marty Meehan (D-MA) is not participating either. He voted for the PA in 2001.

The full Committee membership has 23 Republicans and 17 Democrats. Of the current members, only six voted against the PATRIOT Act in 2001: Rep. Rick Boucher (D-VA), Rep. Conyers, Rep. Lee, Rep. Nadler, Rep. Scott, Rep. Waters, and Rep. Mel Watt (D-NC). All are Democrats.

The House vote on October 24, 2001 was 357-66. See, Roll Call No. 398. Only three of the 66 no votes were cast by Republicans: Rep. Bob Ney (R-OH), Rep. Otter, and Rep. Paul. None are on the HJC.

Related stories published this month:

• "House Judiciary Committee Holds Hearing on PATRIOT Act" in TLJ Daily E-Mail Alert No. 1,112, April 11, 2005.
• "Senate Judiciary Committee Holds Hearing on PATRIOT Act" in TLJ Daily E-Mail Alert No. 1,110, April 6, 2005.
• "Senate Judiciary Committee Hearing Touches on Pen Register and Trap and Trace Device Authority" in TLJ Daily E-Mail Alert No. 1,110, April 6, 2005.

Related Stories in TLJ Daily E-Mail Alert No. 1,125, April 29, 2005:

• "House Crime Subcommittee Holds Hearing on Pen Register and Trap and Trace Device Authority"
• "House Crime Subcommittee Holds Hearing on § 209 of PATRIOT Act, Stored Communications and VOIP"
• "House Crime Subcommittee Holds Hearing on § 217 of PATRIOT Act"
• "House Crime Subcommittee Holds Hearing on Library and ISP Records and § 215 of the Patriot Act and National Security Letters"

House Crime Subcommittee Holds Hearing on Library and ISP Records and § 215 of the Patriot Act and National Security Letters

4/28. The House Judiciary Committee's Subcommittee on Crime Terrorism, and Homeland Security held oversight hearings on Thursday morning, April 28. It addressed among other topics, § 215 of the PATRIOT Act.

§ 215 of the PATRIOT Act is perhaps the most controversial of the provisions set to sunset at the end of this year. It pertains to access to business records under the Foreign Intelligence Surveillance Act (FISA). However, library records are a form of business records, and interest groups such as the American Library Association (ALA) oppose the provision. In contrast, the Department of Justice (DOJ) remains adamant about the importance of extending this provision.

§ 215 of the PATRIOT Act is titled "Access to records and other items under the Foreign Intelligence Surveillance Act". The Foreign Intelligence Surveillance Act (FISA) only applies to foreign powers, and agents of foreign powers, including international terrorists. § 501 of the FISA enables the FBI to obtain from a judge or magistrate an order requiring the production business records. While the statute does not expressly include library records, it is not disputed that library records could be obtained.

§ 215 rewrote § 501 of the Foreign Intelligence Surveillance Act (FISA), which is codified in Title 50 as § 1861. It pertains to "Access to Certain Business Records for Foreign Intelligence and International Terrorism Investigations". § 215 (of the PATRIOT Act) replaced §§ 501-503 (of the FISA) with new language designated as §§ 501 and 502.

Currently, § 501 (as amended by § 215) requires that an application to a judge or magistrate "shall specify that the records concerned are sought for an authorized investigation conducted in accordance with subsection (a)(2) to obtain foreign intelligence information not concerning a United States person or to protect against international terrorism or clandestine intelligence activities." Allowing § 215 to sunset  would raise the standards for obtaining a FISA order for business records.

The Subcommittee heard from three current or former DOJ employees. James Baker, Counsel for Intelligence Policy at the DOJ, wrote in his prepared testimony that § 215 "allows the FBI to obtain business records or other tangible things under FISA pursuant to a FISA Court order if the items relate to an ongoing authorized national security investigation ..."

Baker also addressed libraries. He wrote that "Prosecutors have always been able to obtain records from libraries and bookstores through grand jury subpoenas. Libraries and booksellers should not become safe havens for terrorists and spies. While section 215 has never been used to obtain such records, last year, a member of a terrorist group closely affiliated with al Queda used Internet service provided by a public library to communicate with his confederates. Furthermore, we know that spies have used public library computers to do research to further their espionage and to communicate with their co-conspirators."

Kenneth Wainstain, interim U.S. Attorney for the District of Columbia, wrote in his prepared testimony that "Asking law enforcement to effectively investigate and prosecute crime without using grand-jury subpoenas to obtain records would be like asking Tiger Woods to win the Masters without using a putter."

Rep. Howard Coble (R-NC) asked the government witnesses if the 9/11 terrorists used libraries. Wainstain responded that several had. A member of the Committee staff told TLJ that this was the first time that the DOJ publicly disclosed this.

The Committee promptly transcribed the relevant portion of Wainstain's response.

He stated that "Investigators received information that individuals believed to be Wail Al Shehri, Waleed Al Shehri, and Marwan Al Shehhi visited the Delray Beach Public Library, in Delray Beach, Florida. Wail Al Shehri and Waleed Al Shehri entered the library one afternoon in July of 2001 and asked to use the library’s computers to access the Internet. After about an hour, a third man, Marwan Al Shehhi, joined the two. Waleed and Wail Al Shehri were hijackers aboard American Airlines Flight 11, while Al Shehhi was the pilot who took control of United Airlines Flight 175. Both of those flights crashed into the World Trade Center on September 11th." See, HJC release [2 pages in PDF]

"A witness, who recognized photos of the three individuals that ran in newspaper articles after September 11, provided the information about the Delray Beach library visit. While no records exist to confirm the hijackers’ visit to the Delray Beach library, the timing, location, and behavior described by the witness are consistent with other information gathered in the course of the investigation", said Wainstain.

"In addition, investigators tracing the activities of the hijackers determined that, on four occasions in August of 2001, individuals using Internet accounts registered to Nawaf Al Hazmi and Khalid Al Mihdar -- 9/11 hijackers -- used public access computers in the library of a state college in New Jersey. The computers in the library were used to review and order airline tickets on an Internet travel reservations site. Al Hazmi and Al Mihdar were hijackers aboard American Airlines Flight 77, which took off from Dulles Airport and crashed into the Pentagon. The last documented visit to the library occurred on August 30, 2001. On that occasion, records indicate that a person using Al Hazmi’s account used the library’s computer to review September 11 reservations that had been previously booked", said Wainstain.

In addition, Rep. James Sensenbrenner (R-WI), the Chairman of the full Committee, who was not present for this exchange, commented on it in the HJC release.

He stated that "Today we learned the 9/11 murderers used our public libraries to access the Internet and help plan their travel prior to 9/11. This newly released information demonstrates the critical importance of the PATRIOT Act’s Section 215, which allows for the production of business records with a FISA court order. Section 215 provides -- with appropriate safeguards -- the tools necessary to help disrupt and prevent future terrorist attacks. We put Americans' lives at risk if we foolishly provide sanctuaries -- even in our public libraries -- for terrorists to operate."

Rep. Dan Lungren (R-CA) and Rep. Louie Gohmert (R-TX), who are defending the DOJ and the PATRIOT Act at these hearings, emphasized this revelation. In contrast, Rep. John Conyers (D-MI), the ranking Democrat on the Committee, stated that the Committee only gets information when its surveillance powers are about to expire. And, "other than that, we get stiffed".

Gregory Nojeim, of the ACLU, offered an opposing viewpoint. First, while the agenda for this hearing specified § 215 and § 206 (regarding roving wiretaps in FISA investigations), Nojeim said that the Committee should consider § 215 and § 505(a) (which pertains to national security letters) in conjunction. The gist of his argument was that even if the Congress amended § 215 to exempt library records, the FBI could still obtain a library's internet use records from its ISP with a national security letter under the new powers provided by § 505(a) of the PATRIOT Act. Nojeim noted that this would only provide the FBI with internet use records, and not with the library's book checkout records.

He elaborated in his written testimony that "For both section 215 records searches and national security letters, the Patriot Act removed from the law the requirement that the records being produced pertain to an ``agent of a foreign power,´´ -- that is, foreign countries, businesses, and terrorist organizations. This significantly expanded law enforcement access to records pertaining to Americans. In these days of data mining, one cannot ignore this stark fact: under these provisions, the government can easily obtain records pertaining to thousands of Americans who have nothing to do with terrorism, so long as the records are sought for, or are allegedly relevant to, one of these investigations."

He also stated that the PATRIOT Act "expanded national security letter authority to allow the FBI to issue a letter compelling Internet Service Providers ... to produce records about people who use or benefit from their services."

Nojeim also contradicted the government witnesses' claims that § 215 makes the FISA process more like a criminal grand jury subpoena. He argued that in contrast, § 215 and § 505(a) "indicate that the recipient can tell no one that the recipient has received the order or letter, including any attorney with whom they may like to consult." That is, a recipient can challenge a subpoena, but not a § 215 or national security letter. Nojeim called this a "gag".

Earlier this month Attorney General Alberto Gonzales stated that the DOJ now interprets the national security letter statute to allow a recipient to consult an attorney. James Baker repeated this at the April 28 hearing.

Nojeim countered that "they took this position after we sued them".

Senate Commerce Committee to Hold Hearing on Law Respecting Prepackaged News Stories

4/28. Sen. Frank Lautenberg (D-NJ), and six other Democratic Senators, introduced S 967, the "Truth in Broadcasting Act of 2005", a bill to further regulate "prepackaged news stories" produced by federal agencies.

The bill would add a new Section 342 to the Communications Act, which is codified as Title 47. It would provide, in part, that "Any prepackaged news story produced by or on behalf of a Federal agency that is broadcast or distributed by a network organization, broadcast licensee or permittee, or multichannel video programming distributor in the United States shall contain an announcement supplied by the Federal agency within the prepackaged news story that conspicuously identifies the United States Government as the source for the prepackaged news story."

Currently, 47 U.S.C. § 317 pertains to "Announcement of payment for broadcast", while 47 U.S.C. § 508 pertains to "Disclosure of payments to individuals connected with broadcasts". S 967 would cover federal agency prepackaged news stories in the absence of payments.

The bill was referred to the Senate Commerce Committee, which has scheduled a hearing on the bill for Thursday, May 12, at 10:00 AM.

In addition, on February 17, 2005, the Government Accountability Office (GAO) wrote a memorandum [3 pages in PDF] to the heads of executive branch departments and agencies. This memorandum describes practices related to prepackaged news stories and video news releases. It states that "Prepackaged news stories are complete, audio-video presentations that may be included in video news releases, or VNRs. They are intended to be indistinguishable from news segments broadcast to the public by independent television news organizations. To help accomplish this goal, these stories include actors or others hired to portray "reporters" and may be accompanied by suggested scripts that television news anchors can use to introduce the story during the broadcast. These practices allow prepackaged news stories to be broadcast, without alteration, as television news."

The GAO memorandum also instructs executive branch officials that "While agencies generally have the right to disseminate information about their policies and activities, agencies may not use appropriated funds to produce or distribute prepackaged news stories intended to be viewed by television audiences that conceal or do not clearly identify for the television viewing audience that the agency was the source of those materials." It asserts as authority appropriations legislation.

The GAO is an arm of the Congress. It has no authority to instruct executive branch officials.

Also, on April 13, 2005, the Federal Communications Commission (FCC) released a document [10 pages in PDF] titled "Public Notice" that it has received communications regarding video news releases (VNRs). It further states that it has authority, pursuant to 47 U.S.C. §§ 317 and 508 and 47 C.F.R. §§ 73.1212 and 76.1615, to instruct its licensees and operators that "whenever broadcast stations and cable operators air VNRs, licensees and operators generally must clearly disclose to members of their audiences the nature, source and sponsorship of the material that they are viewing."

The FCC notice further warns that "We will take appropriate enforcement action against entities that do not comply with these rules".

Finally, the FCC notice requests public comments. It states that " we seek comment on the ways in which VNRs are used in programming, and on which practices are the most common. For example, we also seek comment on whether the entities producing or providing VNRs, including the government, pay broadcast licensees and cable operators to air VNRs, or whether the VNRs are provided free of charge, without separate payment or consideration. Are mechanisms in place to ensure that broadcast licensees and cable operators receive notice regarding the payment of consideration from all individuals and entities that are involved in the production and provision of VNRs? Are mechanisms in place to ensure that broadcast licensees and cable operators receive notice regarding the identity of entities providing programming involving political material or the discussion of controversial issues of public importance? Do broadcast licensees and cable operators receive VNRs as part of an overall news service, which may be provided under contract or on a subscription basis? If so, should this affect the applicability of our sponsorship identification rules? Finally, we seek comment on whether there are alternative or better means of ensuring proper disclosure concerning VNRs in addition to those prescribed by the existing rules."

Initial comments are due by June 22, 2005. Reply comments are due by July 22, 2005. This notice is FCC 05-84 in MB Docket No. 05-171.

BIS Chief Discusses Export Regulation

4/28. Peter Lichtenbaum gave a speech on government control of exports and related regulation. He discussed, among other topics, MTOPS based restrictions, the merging of software and hardware, and the "deemed export" rules.

Lichtenbaum is the acting Under Secretary for Industry and Security and Assistant Secretary for Export Administration. He is the head of the Bureau of Industry and Security (BIS), which is also known as the Bureau of Export Administration (BXA). The BIS/BXA controls exports, and "deemed exports", for national security purposes, including exports of dual use items, such as computers, microprocessors, software and encryption products.

Lichtenbaum (at right) stated that "BIS continues to work toward adopting a new metric for controlling exports of strategically significant computers. Changes in computer technology and market developments have diminished the effectiveness of the current metric for measuring the critical performance of HPCs. The current metric is ``MTOPS´´ -- Millions of Theoretical Operations per Second. The U.S. Government and industry have been discussing options for replacing MTOPS. In 2005, we hope to finalize this reform effort and put in place a more modern system for controlling computers."

He also stated that "We also plan to update the existing ``de minimis´´ rule for determining when a reexport is subject to U.S. jurisdiction. The ``de minimis´´ rule determines when a reexport is subject to U.S. jurisdiction. Advisory committees and other industry groups have urged that we update this rule to reflect changes in technology, such as how software is now incorporated into hardware. For example, when a U.S.-origin chip provides instructions for a foreign car's engine. The merging of software and hardware makes it appropriate to review whether we should continue to treat software and hardware separately under our de minimis rule. We expect to move forward on this issue soon."

He also discussed the "deemed export" rule. He said, among other things, that "The Administration's liberalizations of controls on microprocessors and advanced computer technology have also limited ``deemed export´´ license applications.

EU's Mandelson Addresses Trade with Asia

4/28. Peter Mandelson, the European Commissioner for Trade, gave a speech in Singapore titled "Tilting the Global Balance: Asia's New Trade Growth". He said that Europe should welcome trade with Asia, but that intellectual property rights enforcement, and other trade related issues, remain a problem. He also argued that for Europe to be competitive, it must be innovative in the knowledge economy. And, he said that completion of the Doha round remains the EU's top priority.

Mandelson (at right) stated that "Emerging Asia is, and will increasingly be the essential trade partner of choice for Europe. There are already millions of wealthy households in China and India offering a huge future potential for EU business. This is why, amongst other reasons, the ``new´´ Asia is to be welcomed, not feared."

He continued that "What should be of greatest concern to Europe is the task of maintaining and increasing our market share in the new Asia. There are legitimate worries here: and they raise questions not just of European competitiveness, but of trade policy such as protection of intellectual property, the opening up of public procurement, genuine -- not commitments on paper -- market access for European service businesses and in some cases, persistently high industrial tariffs."

He elaborated that "Innovation remains key for Europe to be able to respond to the Asian phenomenon. Urgent action to reassert Europe's technological leadership is crucial ..." He reiterated proposals for increased investment in the knowledge economy. He said that "We need to advance economic reforms, to equip people for change and to bring governments and business to work in partnership to improve competitiveness."

He also discussed trade agreements. He said that the U.S. "is increasing its economic influence in the region through bilateral FTAs. The obvious risk is that these regional efforts detract from multilateral trade liberalisation and the multiple benefits this offers."

Hence, he said that "our number one priority in the successful and ambitious outcome of the ongoing multilateral trade negotiations, the Doha Round."

New York Sues Intermix Alleging Its Distribution of Spyware Is Fraudulent Business Practice

4/28. The state of New York filed a complaint [PDF] in state court in New York against Intermix Media alleging violation of state laws regarding deceptive and fraudulent business practices in connection with Intermix's distribution of software which the complaint characterizes as "spyware". New York seeks to enjoin distribution of the software.

The complaint states that Intermix Media, Inc., which was previously known as eUniverse, Inc., "has distributed to millions of consumers a wide variety of “free” games, cursors, screensavers and other small software programs", and that it has "deceptively and surreptitiously ``bundled´´ with these programs undisclosed and invasive spyware (also known as ``adware´´) programs." (Parentheses in original.) The complaint further alleges that Intermix "has contracted with agents to bundle the spyware with their own free programs."

The complaint elaborates that "Intermix has done so by first offering ostensibly ``free´´ software programs (such as screensavers and games) that anyone can download. Without disclosure to consumers, however, Intermix surreptitiously tacks onto these programs one or more additional programs that deliver ads and other invasive content. Thus, when users install a ``free´´ Intermix screensaver or game, they also unwittingly install one or more spyware programs as well. In this manner, known as ``bundling,´´ Intermix has spread its advertising programs onto millions of consumers' hard drives. According to Intermix's own figures provided to this office, this includes more than three million installations to New Yorkers." (Parentheses in original.)

The complaint adds Intermix does not provide advance notice to consumers. It states that "Intermix offers consumers either no notice or only token notice about the hidden spyware programs. Intermix either fails to disclose these additional programs in any manner, or hides mention of them deep within lengthy, legalistic license agreements. Even in the latter case, the information Intermix does provide about the spyware programs is vague, incomplete and often factually incorrect."

The complaint also describes several programs. "Spyware programs that Intermix has fraudulently spread in this manner include ``KeenValue´´ (a program that shows pop-up advertisements); ``IncrediFind´´ (a program that redirects web addresses to Intermix websites); ``Updater´´ (a program that allows Intermix to add or update programs and functionality to a user's computer); and various ``Toolbar” programs (programs that overlay onto users’ web browsers a ``toolbar´´ linking to Intermix's services and clients). Because these programs are permanently installed on the user's hard drive and run during subsequent browsing sessions, they continue to advertise Intermix's clients and report information about the user long after the user has left the websites of Intermix or its agents." (Parentheses in original.)

Eliot Spitzer, the Attorney General of New York, stated in a release that "Spyware and adware are more than an annoyance ... These fraudulent programs foul machines, undermine productivity and in many cases frustrate consumers' efforts to remove them from their computers. These issues can serve to be a hindrance to the growth of e-commerce."

The release of the Office of the Attorney General of New York also quotes Ari Schwartz, who works for the Center for Democracy and Technology (CDT) in Washington DC. He states that "One of Internet users' biggest frustrations today is unwanted software that sneaks onto computers without their owner's consent and cannot be uninstalled. Companies have gotten away with unethical and illegal software download practices for too long. The practices alleged in this case are widespread on the Internet and we hope that both federal and state authorities follow Attorney General Spitzer's lead in making this a priority".

Leahy and Sununu Introduce E-Mail Privacy Act

4/28. Sen. Patrick Leahy (D-VT) and Sen. John Sununu (R-NH) introduced S 936, the "E-Mail Privacy Act of 2005".

This bill is a reaction to the split opinion of the three judge panel of the U.S. Court of Appeals (1stCir) in USA v. Bradford Councilman, a criminal case involving the Electronic Communications Privacy Act (ECPA) and unauthorized accessing of the content of stored e-mail messages. The Court of Appeals held that there was no violation of the Wiretap Act, as amended by the ECPA, when stored e-mail was accessed, because, since it was in storage, there was no interception within the meaning of the statute. See also, story titled "1st Circuit Holds Wiretap Act Does Not Apply to E-Mail in Storage" in TLJ Daily E-Mail Alert No. 930, July 1, 2004.

The Leahy Sununu bill amends 18 U.S.C. § 2510 to undo Councilman.

See, full story.

People and Appointments

4/28. The Senate confirmed Robert Portman to be the U.S. Trade Representative (USTR). Portman wrote in a statement [PDF] that "I plan to focus on continuing this record of opening markets to expand freedom and reduce poverty, working closely with the U.S. Congress. I will also redouble our efforts to enforce international trade agreements and U.S. trade laws. As a now former Member of Congress, I know well the positive, and at times disruptive, effects of trade. I will work hard to make sure Americans are competing on a level playing field and have the opportunity to sell their world class goods and services in overseas markets. Congressional approval of the Central American and Dominican Republic Free Trade Agreement, China trade issues, the enforcement of existing agreements, keeping on pace the Doha talks to lower trade barriers, and our ongoing regional and bilateral trade negotiations, are all front and center issues for me."

4/28. Regina Brown was named Designated Federal Officer (DFO) to the North American Numbering Council (NANC), an advisory committee of the Federal Communications Commission's (FCC). She replaces Sanford Williams. Brown is a staff attorney in the FCC's Wireline Competition Bureau's (WCB) Telecommunication Access Policy Division (TAPD). In addition, Marilyn Jones was named Alternate DFO. She replaces Pam Slipakoff. Jones is also a staff attorney in the TAPD. See, FCC release [PDF].

Rep. Miller Introduces Bill to Repeal Excise Tax on Phones

4/27. Rep. Gary Miller (R-CA), and 39 other Representatives, introduced HR 1898, the "Telephone Excise Tax Repeal Act of 2005".

There were similar bills in the 105th, 106th, 107th, and 108th Congresses. None became law. See, HR 3648 in the 105th Congress, HR 3916 in the 106th Congress, HR 236 in the 107th Congress, and HR 2957 in the 108th Congress. The House passed HR 3916 (106th) on a roll call vote of 420-2, on May 25, 2000. See, Roll Call No. 233. However, the full Senate did not pass the bill. HR 236 (107th) had 149 sponsors.

This tax dates back to the Spanish American War. Hence, the sponsors waited until April to introduce the bill so that it would be assigned the number 1898, which is also the year in which the tax was first imposed.

"I think it is safe to say that the Spanish American War is over", said Rep. Miller in a release. He added, "like a cockroach, this tax refuses to die".

Senate Report 106-328 on HR 3916 (106th) states that "The first tax on telephone service was enacted in 1898 to help finance the Spanish-American War. That tax was repealed in 1902 and was not re-enacted until World War I required additional revenues. The World War I telephone tax was repealed in 1924 and was re-enacted in 1932. All of these initial telephone taxes applied only to toll (long distance) service. In 1941, with the advent of World War II, the tax was extended to general local service. An excise tax on telephone service has been in effect in every year since 1941, despite enactment of periodic legislation to repeal or phase-out the tax." (Parentheses in original. Footnotes omitted.)

26 U.S.C. § 4251 provides that "There is hereby imposed on amounts paid for communications services a tax equal to ... 3 percent". HR 1898 would, among other things, repeal this section.

§ 4251(b) provides that the term ''communications services'' means "(A) local telephone service; (B) toll telephone service; and (C) teletypewriter exchange service". Nevertheless, last year the Internal Revenue Service (IRS) announced that it might, by administrative fiat, expand the scope of the tax to include some internet protocol services. See story titled "IRS Publishes Advance NPRM Regarding Expanding the Excise Tax on Telephones to Include New Technologies" in TLJ Daily E-Mail Alert No. 931, July 6, 2004.

Phone companies, which do not like to have their customers singled out for a special tax, have long sought repeal of this tax. Steve Largent, P/CEO of the CTIA, stated in a release that the excise tax "is today slowing the development of innovative products and services that help make our lives more productive and enjoyable".

People and Appointments

4/27. President Bush nominated Shara Aranoff to be Commissioner of the U.S. International Trade Commission (USITC) for the remainder of a nine year term expiring on December 16, 2012. See, White House release. On January 28, 2005, Sen. Harry Reid (D-NV), the Senate Democratic Leader, designated Aranoff for nomination to a Democratic position on the USITC. She is currently Senior International Trade Counsel on the Democratic staff of the Senate Finance Committee. She has also worked in the USITC's Office of General Counsel, and for the law firm of Steptoe & Johnson. Aranoff will, if confirmed by the Senate, fill the seat of Marcia Miller, whose term has expired. Sen. Max Baucus (D-MT), the ranking Democrat on the Senate Finance Committee, praised Aranoff in a January release [PDF].

4/27. President Bush nominated Ben Bernanke to be Member of the Council of Economic Advisers. Bush previously announced his intent to make this nomination. See, White House release.

More News

4/27. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing titled "How Internet Protocol-Enabled Services Are Changing the Face of Communications: A View from Government Officials". See, prepared testimony [18 pages in PDF] of Lewis Billings (Mayor of Provo City, Utah), prepared testimony [7 pages in PDF] of Diane Munns (Commissioner, Iowa State Utilities Board, on behalf of the National Association of Regulatory Utility Commissioners), prepared testimony [20 pages in PDF] of Kenneth Fellman (Mayor of Arvada, Colorado, on behalf of: the National Association of Telecommunications Officers and Advisors), prepared testimony [20 pages in PDF] of Charles Davidson (Commissioner, Florida Public Service Commission), prepared testimony [7 pages in PDF] of John Perkins (President, National Association of State Utility Consumer Advocates), prepared testimony [7 pages in PDF] of Karen Strauss (Alliance for Public Technology), and prepared testimony [15 pages in PDF] of David Quam (National Governors Association).

4/27. The Copyright Office published a notice in the Federal Register that describes and sets the comment deadline (May 27, 2005) for its notice of proposed rulemaking (NPRM) regarding requiring eligible digital audio services availing themselves of the statutory licenses set forth in 17 U.S.C. §§ 112 and 114 to report their usage of sound recordings. See, Federal Register, April 27, 2005, Vol. 70, No. 80, at Pages 21704-21711.

4/27. Bill Gates, Chairman of Microsoft, gave a speech in Washington DC.

House Crime Subcommittee Holds Hearing on Pen Register and Trap and Trace Device Authority

4/26. The House Judiciary Committee's Subcommittee on Crime Terrorism, and Homeland Security held oversight hearings on Thursday, April 26. It addressed among other topics, §§ 214 and 216 of the PATRIOT Act, which pertain to internet surveillance.

The agenda for the hearing included oversight of the Department of Justice's (DOJ) implementation of § 214, titled "Pen Register and Trap and Trace Authority Under FISA". This section is scheduled to sunset on December 31, 2005.

The agenda did not include § 216, titled "Modification of authorities relating to use of pen register and trap and trace devices". This section is not scheduled to sunset. However, Subcommittee members' questions addressed pen register and trap and trace device (PRTTD) authority generally, and not just § 214.

Rep. Bobby Scott (D-VA), the ranking Democrat on the Subcommittee, questioned the witnesses about what information could be collected with a PRTTD order in the context of e-mail and use of the web. The government witnesses, Mary Beth Buchanan and James Baker, were evasive and non-responsive.

Buchanan is the U.S. Attorney for the Western District of Pennsylvania. See, prepared testimony [PDF]. Baker is Counsel for Intelligence Policy at the DOJ. He is a member of the Senior Executive Service. See, prepared testimony [PDF].

Background on PRTTDs. The government obtains different types of orders for different types of surveillance. There are widely different standards for obtaining different types of orders. For example, there are wiretap orders, PRTTD orders, and Foreign Intelligence Surveillance Act (FISA) orders. A wiretap order, which enables law enforcement agencies to obtain the content of a phone call or e-mail, is issued by a judge upon a showing of probable cause. There are also other requirements. This is often referred to as a Title III order. This is a very high standard.

There is a much lower standard for law enforcement agencies to obtain a PRTTD order. Before passage of the PATRIOT Act, the sections of the criminal code pertaining to PRTTD orders merely authorized the government to obtain outgoing and incoming phone numbers. § 216 of the PATRIOT Act added the words "routing, addressing", thereby enabling PRTTD orders to include e-mail and web addressing and routing information. However, the PATRIOT did not elaborate on the distinction between routing and addressing information and the content of e-mail and web communications.

Under § 216, the court must issue a PRTTD order if the government certifies mere relevance to a criminal investigation. The judge has no discretion. The Supreme Court has upheld this procedure on the basis that only phone numbers are obtained.

Finally, there is a separate, and low, standard for FISA orders. Under the PATRIOT Act, a significant purpose of the surveillance must be foreign intelligence gathering.

The statutes for wiretaps and PRTTD orders were drafted with analog Public Switched Telephone Network (PSTN) voice service in mind. Originally, 18 U.S.C. § 3127 provided that a pen register records the numbers that are dialed or punched into a telephone, while a trap and trace device captures the incoming electronic or other impulses which identify the originating number of an instrument or device from which a wire or electronic communication was transmitted. The PATRIOT Act expanded the scope of surveillance under pen register and trap and trace authority to include internet routing and addressing information. That is, an e-mail address in the "To:" line of an e-mail message is somewhat analogous to the number dialed in a PSTN voice call.

Witness Testimony. Buchanan wrote in her prepared testimony [6 pages in PDF] that that the PATRIOT Act made the requirements for obtaining a PRTTD order in intelligence investigations similar to the requirements in criminal investigations. "Section 214 of the USA PATRIOT Act allows the government to obtain a pen register order in national security investigations where the information likely is relevant to an international terrorism or espionage investigation. This provision is similar to the 1986 criminal pen register statute (18 U.S.C. § 3121) that has been frequently used by criminal prosecutors to obtain pen registers and trap and trace devices in a variety of criminal investigations." She added that "Pen registers are not used to collect the content of communications." She did not specifically address § 216.

She continued that "Currently under FISA, government officials similarly may seek a court order for a pen register or trap-and-trace device to gather foreign intelligence information or information about international terrorism or espionage. Prior to enactment of the USA PATRIOT Act, however, FISA required government personnel to certify not just that the information they sought was relevant to an intelligence investigation, but also that the facilities to be monitored had been used or were about to be used to contact a foreign agent or an agent of a foreign power, such as a terrorist or spy. Thus, it was much more difficult to obtain an effective pen register or trap-and-trace order in an international terrorism investigation than in a criminal investigation."

She added that "Section 214 of the USA PATRIOT Act brought authorities for terrorism and other foreign intelligence investigations more into line with similar criminal authorities by permitting court approval of FISA pen registers and trap-and-trace orders even though an applicant might be unable to certify at that stage of an investigation that the facilities themselves, such as phones, are used by foreign agents or those engaged in international terrorist or clandestine intelligence activities."

Rep. Scott pursued a line of questions regarding the distinction between content and addressing and routing information. This was a question that was asked during consideration of the PATRIOT Act in 2001, but never fully answered. Rep. Scott did not receive responsive answers at this hearing.

Buchanan said that the information available is the numbers "being dialed from the telephone". She added that "this is not content information", and that its purpose is "to show connections between individuals".

In response to further questions from Rep. Scott regarding the internet, she asserted that "it is really no different" on the internet. She asserted that "content information is not collected".

Scott persisted by asking several times what information does the government get. Buchanan said "just routing information", but, "there could be inadvertent collection".

In response to a specific question about e-mail subject lines, she said, "No subject line."

Rep. Scott then asked "do you get to know what web site was looked at?" Buchanan then deferred to James Baker. Baker did not provide a responsive answer. He discussed technology, and evaded the inquiry.

Rep. Scott stated that "what web sites you look at has content implications", citing health and book sale web sites. Baker neither confirmed nor disputed this statement.

Rep. Scott asked if the government could use a PRTTD order to obtain "what books I bought off of Amazon.com". Baker did not provide an answer. He did, however, state that business records are not protected under the 4th Amendment, and that business records in the nature of book purchase records are not protected under the 4th Amendment.

TLJ asked Baker after the hearing whether the government has authority under a PRTTD order to obtain the URL of an Amazon.com book order page. He stated again that the 4th Amendment does not apply to business records, including book sales records. He also stated that he will not disclose whether or not the government has used a PRTTD order to obtain the URLs of Amazon.com book order pages. He also stated that he will not disclose whether or not it is the opinion of the DOJ that it has the authority to obtain the URL of an Amazon.com book order page with a PRTTD order.

Neither Baker nor Buchanan stated why they will not answer such basic questions.

A related topic that the witnesses did not address in their prepared testimony or opening statements, and that the members of the Subcommittee did not raise, is the appending of search terms to URLs. For example, if a person were to telephone TLJ and ask if TLJ has published any articles regarding pen registers, then the government would need a Title III order to obtain that conversation. If, however, that person went to Google's web site and conducted a search restricted to the TLJ web site for the words pen and register, then the URL sent to Google would not only include the Google URL, but also the URL of the TLJ web site, and the search terms pen and register. The government witnesses did not address whether this information could be obtained with a PRTTD order.

On April 6, 2005, when Attorney General Gonzales testified before the Senate Judiciary Committee, Sen. Russ Feingold (D-WI) asked about the distinction between content and addressing and routing information. AG Gonzales did not answer the question.

House Approves High-Performance Computing Revitalization Act

4/26. The House approved HR 28, the "High-Performance Computing Revitalization Act of 2005", by voice vote. HR 28 amends the High-Performance Computing Act of 1991, which is codified at 15 U.S.C. § 5511, et seq. The Senate has yet to approve the bill.

This bill requires federal agencies to provide the U.S. research community access to the most advanced high performance computing systems and technical support. It requires federal agencies to support high performance computing for scientific and engineering applications. It requires the White House Office of Science and Technology Policy (OSTP) to direct an interagency planning process to develop and maintain a research development and deployment roadmap for the provision of high performance computing resources for the U.S. research community. It clarifies the missions of each of the federal agencies that have a role in developing or using high performance computing.

Rep. Sherwood Boehlert (R-NY), the Chairman of the House Science Committee, and a cosponsor of HR 28, stated in the House that "This is very important legislation that deals with the competitiveness of the United States of America in the global marketplace. We are not going to be preeminent in the competitive world if we don't invest wisely and direct our resources in the proper way, because the competition is all over the place. It isn't one state against another. It's the United States against the world. Right now, we're ahead. That's the position I like. But when we look back, we see a lot of people following closely behind. That's why it's critically important that we do things like invest in high-performance computing so that we maintain our competitive edge."

Rep. Judy Biggert (R-IL) and others introduced this bill on January 4, 2005. It is a reintroduction, with modifications, of HR 4218 (108th Congress), the "High-Performance Computing Revitalization Act of 2004". The House, but not the Senate, approved HR 4218 in the last Congress.

House Appropriations Subcommittee Holds Hearing on FCC

4/26. The House Appropriation's Committee's Subcommittee on Science, State, Justice, and Commerce, and Related Agencies held a hearing on the Federal Communications Commission's (FCC) fiscal year 2006 appropriation.

FCC Chairman Kevin Martin wrote in his prepared testimony [6 pages in PDF] that the FCC "is requesting spending authority of $304,057,000 for Fiscal Year 2006, with a direct appropriation of $4,823,000. The Commission will raise the remainder, or $299,234,000, through regulatory fees. During the current fiscal year, the Commission has a spending level of $281,098,000".

Martin testified that a little over $3 Million of the requested increase in FY 2006 would go to "hire 26 limited term FTEs to increase Universal Service Fund audit and oversight activities in Fiscal Year 2006. The requested funds would provide for additional FTEs in the Office of Inspector General, the Wireline Competition Bureau, and the Office of Managing Director. The additional personnel would perform audits, provide investigational support to law enforcement agencies, review audit findings, and handle legal proceedings arising from the increased oversight, including actions to recover USF monies from beneficiaries that failed to use the funds in accordance with program rules. We will work with Congress to ensure the requested funds improve the efficiency of the programs and safeguard the USF from waste, fraud, and abuse."

The FCC's e-rate subsidy program is plagued by rampant fraud. See, for example, story titled "Five Indicted for Mail Fraud in Connection with FCC E-Rate Subsidy Program" in TLJ Daily E-Mail Alert No. 870, April 6, 2004. In a March hearing on e-rate program management, Rep. Joe Barton (R-TX), the Chairman of the House Commerce Committee, suggested ending the program. See, story titled "Chairman Barton Suggests Ending E-Rate Program" in TLJ Daily E-Mail Alert No. 1,097, March 17, 2005.

7th Circuit Rules on Implied Private Right of Action under §13(d) in Chinadotcom Case

4/26. The U.S. Court of Appeals (9thCir) issued its opinion [27 pages in PDF] in Edelson v. Ch'ien, a case involving Chinadotcom, one of its former directors, and § 13(d) of the Securities and Exchange Act. The District Court dismissed, holding that former directors have no private right of action under § 13(d). The Court of Appeals affirmed.

§ 13(d) of the Securities and Exchange Act, which is codified at 15 U.S.C. § 78m(d), requires the filing of reports with the Securities and Exchange Commission (SEC) by persons who directly or indirectly acquire ownership of 5% or more of certain types of securities.

Harry Edelson was an outside director of Chinadotcom from 1999 through 2003. He was not re-elected to the board of directors in a July 2003 annual meeting.

Raymond Ch'ien is Chairman of Chinadotcom. Peter Yip Hak Yung (Yip) is the Vice Chairman and CEO. Edelson and another outside director quarreled with Ch'ien and Yip over a stock buyback plan that would financially benefit Ch'ien and Yip, both of whom are major shareholders.

Edelson ran unopposed for re-election, but lost. 48 percent of shares were voted. The shares beneficially owned by Yip were voted against both Edelson and another independent director who was also defeated. Yip's shares constituted more than two-thirds of the votes against Edelson.

Edelson filed a complaint in U.S. District Court (NDIll) against Ch'ien, Yip, Asia Pacific Online and Chinadotcom alleging violation of § 13(d) and tortious interference with prospective economic advantage. He requested injunctive relief and damages. He sought a new election.

The District Court dismissed the count alleging violation of § 13(d).

The Court of Appeals requested a brief from the SEC. It sided with Edelson, arguing that he has an implied private right of action. However, the Court of Appeals affirmed the District Court.

The Court of Appeals held that there is not an express private right of action under § 13(d). There is an implied private right of action, for those parties that the Congress intended to protect. The Court further reasoned that the Congress's concern in enacting the ownership reporting requirement was tender offers.

That is, "Congress sought to empower the common investor with adequate information regarding those seeking control of an issuer through a tender offer or other method of acquisition so that an individual investor is able to decide whether to retain or dispose of his stock."

"In short, there does not appear to be any indication in the language of § 13(d) that Congress intended a remedy for individual investors who were not faced with the choice of retaining or disposing of their stock in the face of an imminent change in control."

This case is Harry Edelson v. Raymond Ch'ien, Peter Yip Hak Yung, Asia Pacific Online, and Chinadotcom Corporation, U.S. Court of Appeals for the 7th Circuit, No. 04-1299, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 03 C 7320, Judge Amy St. Eve presiding. Judge Ripple wrote the opinion of the Court of Appeals, in which Judges Bauer and Manion joined.

European Commissioner Discusses Innovation Gap

4/26. Viviane Reding, the European Commissioner for Information Society and Media, gave a speech in Brussels regarding innovation in Europe. She said that there is an innovation gap, in which Europe lags behind the U.S., and that Europe should do something about this, especially in the information and communications technology (ICT) sector.

Reding (at right) stated that "A significant innovation gap still exists between the US and the EU, as well as between Japan and the EU."

She said that "According to the European Innovation Scoreboard, an instrument developed to evaluate and compare the innovation performance of Member States with other countries, the US leads mainly because of more patents, a bigger working population with tertiary education, and higher R&D expenditure, in particular from private sources."

She said that "It is essential for Europe to catch up, to improve the conditions under which European companies can succeed, and to support innovation wherever possible." She added that ICT "play a key role", and are "enabling technologies" that "underpin innovation in all sectors of the economy and are responsible for around half of the productivity growth in modern economies."

She discussed Europe's lack of success in ICT. "In IT hardware, only two European companies are among the world’s top ten, and in software and computer services we have only one top ten company."

She then offered government policy solutions.

First, she said, create a "European information space ... to further develop the internal market in information goods and services in Europe, in particular through simple, flexible and market oriented regulation." She did not explain. Although, she added that the Europe should focus on several ICT sectors, "Voice over Internet, security and privacy issues, intellectual property rights, and on-line payments."

Second, she said, government should spend more on research and development (R&D). She argued that "Europe is under-investing in its future. Its ICT investments are only a third of those in the USA and only two thirds of those in Japan. Our overall target therefore is to raise European investment in R&D to 3% of GDP in all 25 EU Member States. At EU level, I would like to see the current R&D funding doubled ..."

Proponents of increased R&D funding by the U.S. similarly argue that the U.S. may fall behind Europe and Asia in a looming innovation gap. For a U.S. based view of how the U.S., Europe and Asia compare on innovation metrics, see, February 2005 report [PDF] titled "The Knowledge Economy: Is the United States Losing Its Competitive Edge?" This report is also subtitled "Benchmarks of Our Innovation Future". It concludes that "Nations from Europe to Eastern Asia are on a fast track to pass the United States in scientific excellence and technological innovation". See also, story titled "University and Industry Representatives Urge More R&D Funding" in TLJ Daily E-Mail Alert No. 1,079, February 17, 2005.

People and Appointments

4/26. The Senate Finance Committee approved the nomination of Robert Portman to be U.S. Trade Representative by a unanimous voice vote.

4/26. President Bush announced his intent to designate Duane Ackerman to be Chairman of the President's National Security Telecommunications Advisory Committee (NSTAC), for a one-year term. Ackerman is the Ch/CEO of BellSouth. Bush also announced his intent to re-designate Patricia Russo to be Vice Chairman of the NSTAC, for a one-year term. Russo is the Ch/CEO of Lucent Technologies. See, White House release.

4/26. President Bush announced his intent to nominate John Sullivan to be General Counsel of the Department of Commerce. He is currently Deputy General Counsel at the Department of Defense. Before that, he was a partner in the Washington DC office of the law firm of Mayer Brown Rowe & Maw. He has also worked in the Department of Justice's Office of Legal Counsel (OLC). See, White House release.

More News

4/26. The Office of Management and Budget (OMB) issued a release regarding the acquisition of Oracle databases, application servers, associated options and Oracle applications for government agencies.

Go to News from April 21-25, 2005.