Rep. Conyers Writes Communications and IT Companies Re Government Surveillance and Customer Data

1/20. Rep. John Conyers (D-MI), the ranking Democrat on the House Judiciary Committee, sent a letter [PDF] to twenty communications and information technology companies regarding disclosure to the federal government of consumer records.

Rep. Conyers (at right) wrote that he wants to know if these companies have "allowed the federal government to eavesdrop on customer communications through your facilities or has turned over customer records when not compelled to do so by law".

The letter propounds two sets of interrogatories:

"1. Has your company, or its contractors or subsidiaries ever given the government access to any of their hardware or software used to deliver communications services in response to a request that was not compelled by one of the following: a grand jury subpoena, a national security letter, a court authorized wiretap order, a valid pen register or trap and trace order, a valid administrative subpoena or a request for documents and things under Section 215 of the PATRIOT Act? If access was used to monitor the content of communications, what type of communications were monitored? How many customers were surveilled? On what date(s) did the surveillance take place? Was surveillance continual or intermittent? Were the customers surveilled ever notified? Does the government presently have access to these methods of communications? What authority was cited by the government to have access to such content without a valid wiretap? What agency or department conducted the surveillance?"

"2. Has your company, or its contractors or subsidiaries ever turned over customer records to the federal government in response to a request that was not compelled by one of the following: as a grand jury subpoena, a national security letter, a valid pen register or trap and trace order, a valid administrative subpoena, or a request for documents and things under Section 215 of the PATRIOT Act? How many times did you receive such a request? What authority was cited in each request? What agency or department made the request? How many times did you comply with such a request? What information was shared with the government in response to each request? How many customers' records were shared under each compliance with such a request? On what date(s) did you turn over your customer records? Were customers ever notified that their information was given to the government?"

The letter was sent to BellSouth, Sprint, Microsoft, Citizens Communications, Qwest, AT&T, Verizon, CenturyTel, Comcast, Charter Communications, Time Warner, Adelphia, CableVision, Cox, Earthlink, Yahoo, Google, Cingular, T-Mobile, and United Online.

This letter follows stories on this subject published by the New York Times in December.

FCC Issues Citations for Failure to Respond to Subpoenas for Records Regarding Illegal Transfer of Consumers' Phone Data

1/20. The Federal Communications Commission's (FCC) Enforcement Bureau (EB) issued a citation [3 pages in PDF] addressed  to "LocateCell.com / Steven Schwartz, Director / 1st Source Information Specialists, Inc." of Tamarac, Florida, for failure to respond to all of the items in a subpoena for information and records regarding "call detail and other customer proprietary network information that LocateCell.com may be obtaining from telecommunications providers, in apparent violation of section 222" of the Communications Act. This section is codified at 47 U.S.C. § 222. The citation is also addressed to "Philip L. Schwartz / Law Offices of Philip L. Schwartz".

The FCC issued a second citation [3 pages in PDF] to "DataFind.org / James Kester / Data Find Solutions, Inc." for failure to respond to an FCC subpoena for information and records regarding "call detail and other customer proprietary network information that DataFind.org may be obtaining from telecommunications providers, in apparent violation of section 222".

Both citations threaten to impose monetary forfeitures.

More News

1/20. The Federal Communications Commission (FCC) held a meeting. The FCC adopted no items. Rather, it received reports from FCC units. See, presentation [PDF] of the Wireless Telecommunications Bureau (WTB), presentation [PDF] of the Office of Engineering & Technology (OET), presentation [PDF] of the International Bureau (IB), presentation [PDF] of the Consumer & Governmental Affairs Bureau (CGAB), presentation [PDF] of the Enforcement Bureau (EB), presentation [PDF] of the Media Bureau (MB), and presentation [PDF] of the Wireline Competition Bureau (WCB).

EPIC Files FOIA Complaint Against DOJ for Records Related to NSA Domestic Terrorist E-Surveillance

1/19. The Electronic Privacy Information Center (EPIC) filed a complaint [7 pages in PDF] in U.S. District Court (DC) against the Department of Justice (DOJ) alleging violation of the Freedom of Information Act (FOIA), which is codified at 5 U.S.C. § 552, in connection with its alleged wrongful withholding of records and information regarding the National Security Agency's (NSA) warrantless surveillance of communications where one party is located in the U.S.

The EPIC also filed a motion for a preliminary injunction and memorandum in support [21 pages in PDF].

The EPIC's FOIA request sought records "concerning a presidential order or directive authorizing the National Security Agency (‘NSA’), or any other component of the intelligence community, to conduct domestic surveillance without the prior authorization of the Foreign Intelligence Surveillance Court (`FISC´)."

The EPIC's FOIA request elaborated that it sought the following:
  "a. an audit of NSA domestic surveillance activities;
  b. guidance or a ``checklist´´ to help decide whether probable cause exists to monitor an individual’s communications;
  c. communications concerning the use of information obtained through NSA domestic surveillance as the basis for DOJ surveillance applications to the FISC; and
  d. legal memoranda, opinions or statements concerning increased domestic surveillance, including one authored by John C. Yoo shortly after September 11, 2001 discussing the potential for warrantless use of enhanced electronic surveillance techniques."

The EPIC's attorneys are David Sobel, Marcia Hoffman and Marc Rotenberg.

President Bush Addresses Municipal Broadband

1/19. President Bush gave a speech and answered questions at an event in Sterling, Virginia. He was asked about legislation that would limit the ability of state and local governments to provide broadband services. Bush said that "I need to check and see what you're talking about". See, transcript.

The subject of Bush's speech was the economy. Bush did not discuss municipal broadband during his speech. However, during the question and answer portion of the program he was asked the following question: "But Congress is contemplating revisions to the Telecommunication Act of '96 that would essentially shut down the options that states and localities are exploring to give broadband to every business and every home. So what is your thought on, as we are falling behind in the world on delivering broadband to businesses and homes and residences -- what will you do to --"

Bush's response suggests that he is unfamiliar with the issue. He said, "Yes, I need to find out -- it's interesting you said that because I laid out the opposite vision, which was that broadband ought to be available and accessible all throughout the country by a set period of time. I need to make sure I understand what you mean, Congress is trying to unwind that vision, because it sounds like you and I share -- I believe you. Thank you for the heads-up. I'll take a look."

He continued, "You're very smart to -- part of the role of government is to create an environment in which people are willing to risk capital. Broadband expansion is part of creating an environment in which it will make it easier for people to be competitive in this part of the world. It's a brilliant idea. People are able to do so much more from their home, particularly if you've got the technology capable of carrying information."

Bush added that "You're right -- want to make sure -- you mentioned that other nations are ahead of us. True, we're catching up -- and we'll do better, by the way. But if part of making sure that America is competitive, is to make sure that we've got broadband available and accessible. One of the interesting questions we're going to have is the last mile issue, and a lot of that, hopefully, will be changed, or at least options -- more options will be available with the development of a dish that is capable of passing broadband over the air, as opposed to cable."

Bush concluded, "Good question. I need to check and see what you're talking about, and will. Thanks for bringing it up."

There are currently numerous federal legislative proposals that would either limit and protect municipal broadband offerings. The questioner did not identity any specific proposal.

See for example, S 1504, the "Broadband Investment and Consumer Choice Act ", introduced by Sen. John Ensign (R-NV) and Sen. John McCain (R-AZ)on July 27, 2005. It would provide, in part, as follows:

"(a) Protection Against Undue Government Competition With Private Sector --- Any State or local government seeking to provide communications service shall ---
  (1) provide conspicuous notice of the proposed scope of the communications service to be provided, including --- (A) cost; (B) services to be provided; (C) coverage area; (D) terms; and (E) architecture; and
  (2) give a detailed accounting of all proposed accommodations that such government owned communications service would enjoy, including --- (A) any free or below cost rights-of-way; (B) any beneficial or preferential tax treatment; (C) bonds, grants, or other source of funding unavailable to non-governmental entities; and (D) land, space in buildings, or other considerations."

It would further provide that "(b) ... Not later than 90 days after posting of the notice required under subsection (a)(1), a non-governmental entity shall have the option of participating in an open bidding process conducted by a neutral third party to provide such communications service on the same terms, conditions, financing, rights-of- way, land, space, and accommodations as secured by the State or local government." Also, it would provide that "If a State or local government wins the bid under subsection (b), a non-governmental entity shall have the ability to place facilities in the same conduit, trenches, and locations as the State or local government for concurrent or future use under the same conditions secured by the State or local government.

See also, the September 15, 2005, House Commerce Committee (HCC) discussion draft [77 pages in PDF]. It would provide, in part, that "Any State or political subdivision thereof, or any agency, authority, or instrumentality of a State or political subdivision thereof, that is, owns, controls, or is otherwise affiliated with a public provider of BITS, VOIP services, or broadband video services shall not grant any preference or advantage to any such provider. Such entity shall apply its ordinances, rules, and policies, including those relating to the use of public rights-of-way, permitting, performance bonding, and reporting without discrimination in favor of any such provider as compared to other providers of such services." (BITS is an acronym for broadband internet transmission service.)

In contrast, there is, S 1294, the "Community Broadband Act of 2005", which was introduced on June 23, 2005, by Sen. McCain and Sen. Frank Lautenberg (D-NJ). It would, in part, provide that "No State statute, regulation, or other State legal requirement may prohibit or have the effect of prohibiting any public provider from providing, to any person or any public or private entity, advanced telecommunications capability or any service that utilizes the advanced telecommunications capability provided by such provider."

See also, story titled "US Chamber Hosts Panel on Municipal Broadband" in TLJ Daily E-Mail Alert No. 1,160, June 23, 2005.

Bush's speech addressed a wide range of economic issues. He did discuss health care. He advocated tort reform and adoption of information technologies by the health care sector. He also discusses free trade.

U.S. and Oman Sign FTA

1/19. U.S. Trade Representative (USTR) Rob Portman and Omani Minister of Commerce and Industry Maqbool bin Ali Sultan signed the U.S.-Oman Free Trade Agreement. See, USTR release.

Portman stated that "the agreement will provide new opportunities for U.S. companies that provide ... services in telecommunication ..." He also said the "This agreement will ensure a secure and predictable legal and regulatory environment in Oman that foreign investors want to see in 21st century commerce", including enforcement of intellectual property laws. See, Portman statement [PDF].

See also, the proposed text of the U.S. Oman FTA, and especially, its sections pertaining to e-commerce [3 pages in PDF], intellectual property rights [31 pages in PDF], and telecommunications [17 pages in PDF].

Sen. Charles Grassley (R-IA), the Chairman of the Senate Finance Committee, stated in a release that "This agreement is positive for the United States. It will give new market access opportunities to American farmers, manufacturers, and service providers, including those in Iowa. Maybe most important, the U.S.-Oman agreement marks yet another major step in fulfilling the President’s goal of completing a Middle East Free Trade Area by 2013. A comprehensive free trade area in the Middle East would create significantly improved market opportunities for U.S. exporters in a part of the world with a fast-growing population. It also would cement ties between our nations and would help build increased economic opportunity and respect for the rule of law in the region. I look forward to working with the President to achieve this goal."

President gave a speech in Sterling, Virginia, on numerous economic issues on January 19. He discussed free trade generally. He said that "I believe it's important to open up markets. I think it's a mistake for this country to go isolationist when it comes to economic policy. Do you realize we're 5 percent of the world's population, which means 95 percent of the rest of them could be customers, so long as we've got a level playing field. My job is to make sure that if you're producing a product, that it has fair access to markets."

People and Appointments

1/19. President Bush announced his intent to nominate Randall Tobias to be Administrator of the U.S. Agency for International Development (USAID). He is currently the U.S. Global AIDS Coordinator. He was previously Ch/P/CEO of Eli Lilly and Company. Before that, he worked for AT&T for over 25 years. See, White House release.

1/19. Clarence Otis was elected to the Verizon Communications' Board of Directors. He is the Ch/CEO of Darden Restaurants, which owns and operates Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones Barbeque & Grill and Seasons 52 restaurants.

1/19. Harold Covert was named to the JDS Uniphase Board of Directors. He is EVP/CFO of Openwave Systems, Inc. See, JDSU release.

1/19. Intel announced in a release that its Board of Directors "has amended the company’s bylaws to adopt a majority vote standard for the election of directors in uncontested elections, beginning with the next election of directors in May. The new standard, which requires each director to receive a majority of the votes cast with respect to that director, further underscores Intel’s focus on corporate governance and provides for a greater level of accountability of directors to stockholders. Previously, directors were elected under a plurality vote standard, meaning the candidates receiving the most votes would win without regard to whether those votes constituted a majority of the shares voting at the meeting." The eleven Directors of Intel are Craig Barrett (Chairman of Intel), Paul Otellini (P/CEO of Intel), Charlene Barshefsky (Wilmer Cutler, and former USTR), John Browne (Group Chief Executive of BP), James Guzy (Chairman of Arbor Company), Reed Hundt (Charles Ross Partners, and former FCC Chairman), James Plummer (Stanford), David Pottruck (Ch/CEO of Red Eagle Ventures), Jane Shaw (former Ch/CEO of Aerogen), John Thornton (Tsinghua University), and David Yoffie (Harvard Business School).

More News

1/19. Securities and Exchange Commission (SEC) Commissioner Paul Atkins (at right) gave a speech to the Securities Regulation Institute in San Diego, California. He discussed, among other topics, the SEC's promotion of the creation and use of interactive financial data through Extensible Business Reporting Language (XBRL). He said that "XBRL tags numbers in the financial statements so they can be searchable by computer. This allows analysts to search the data electronically, and reach down to the level of granularity they desire. They do not have to physically input numbers, which translates into a huge savings in terms of cost, labor, and avoided inputting errors. Any user of financial information can then create his own ratios to compare, for example, return on equity across all companies in an industry. Some companies are working on tagging and disclosing non-financial information too, such as the company's strategy key performance indicators."

Sen. Schumer Introduces Consumer Telephone Records Protection Act

1/18. Sen. Charles Schumer (D-NY) and five other Senators introduced S 2178, the "Consumer Telephone Records Protection Act of 2006".

This bill would add a new Section 1039 to Title 18 (the criminal code) that provides that "Whoever obtains, or attempts to obtain, confidential phone records information from a covered entity, without authorization from the customer to whom such confidential phone records information relates, by knowingly and intentionally -- (1) making false or fraudulent statements or representations to an employee of a covered entity; (2) making such statements or representations to a customer of a covered entity; (3) providing false documentation to a covered entity knowing that such document is false; or (4) accessing customer accounts of a covered entity via the Internet" shall be fined and/or imprisoned.

The bill exempts law enforcement agencies. It permits any "law enforcement agency, or any officer, employee, or agent of such agency, to obtain confidential phone records information from a covered entity in connection with the performance of the official duties of the agency".

It further provides that "any person, including any employee of a covered entity or any data broker, who knowingly and intentionally sells, or attempts to sell, confidential phone records information from a covered entity, without authorization from the customer to whom such confidential phone records information relates" shall be fined and/or imprisoned.

The bill defines "covered entity" to include any "telecommunications carrier" within the meaning of 47 U.S.C. § 153(44), and "any provider of IP-enabled voice service". The bill also defines "confidential phone records information".

The bill uses, but does not define, the term "data broker".

The bill also contains a recitation of Congressional findings. It identifies how consumer phone records are improperly accessed.

It states that internet access to phone account information is one method. The bill states that "because telephone companies encourage customers to manage their accounts online, many set up the online capability in advance. Many customers never access their Internet accounts, however. If someone seeking the information activates the account before the customer, he or she can gain unfettered access to the telephone records and call logs of that customer." The bill also identifies "unauthorized access of accounts via the Internet".

The bill states that two other methods are sale of data by phone company employees, and pretexting, " whereby a data broker or other person pretends to be the owner of the phone and convinces the telephone company's employees to release the data to them".

The bill was referred to the Senate Judiciary Committee, of which Sen. Schumer is a member. Sen. Bill Nelson (D-FL), a cosponsor, issued a release that states that the bill will also be referred to the Senate Commerce Committee, of which Sen. Nelson is a member.

The other original sponsors of the bill are Sen. Arlen Specter (R-PA), Sen. Conrad Burns (R-MT), Sen. Jon Cornyn (R-TX), and Sen. Harry Reid (D-NV).

Sen. Schumer stated in a release that "Stealing someone's private phone records is absolutely a criminal act and the fact that it can’t be prosecuted as one has got to change". He added that "Stealing a person's phone log can lead to serious personal, financial, and safety issues for just about any American."

Steve Zipperstein of Verizon Wireless praised this bill in a release. He stated that "The criminal penalties in this bill will provide another powerful weapon in the legal arsenal that the private sector and the government can use to protect consumers. We believe this legislation will give federal prosecutors and others in law enforcement the tools they need to crack down on this despicable practice and help defend the privacy of U.S. cell phone customers."

No bill on this subject has yet been introduced in the House of Representatives. However, the House is not in session. It will reconvene for the Second Session of the 109th Congress on January 31, 2006.

Sen. Nelson's release states that Rep. Marsha Blackburn (R-TN) and Rep. Jay Inslee (D-WA) plan to offer similar legislation in the House. In addition, Rep. Joe Barton (R-TX) announced on January 18, 2006 that he would introduce a bill when the House reconvenes. See, story titled "Rep. Barton and Sen. Stevens Comment on Sale of Customer Phone Data" in TLJ Daily E-Mail Alert No. 1,292, January 19, 2006.

Sen. Durbin Introduces Phone Records Protection Act

1/18. Sen. Dick Durbin (D-IL) introduced S 2177, the "Phone Records Protection Act of 2006", a bill that would create a new criminal penalty for the sale or fraudulently transfers records of a customer of a telephone service provider.

The bill would amend Title 18 (the criminal code) to provide that "Whoever knowingly and intentionally sells or fraudulently transfers or uses, or attempts to sell or fraudulently transfer or use, the records of a customer of a telephone service provider shall be fined in accordance with this title, imprisoned for not more than 10 years, or both."

The bill would exempt both service providers, and law enforcement personnel, from liability under this prohibition for sales and fraudulent transfers of customer records to law enforcement entities.

The bill defines the term "records of a customer", for the purposes of this prohibition, as "any data or information associated with an individual contained in a database, networked or integrated databases, or other data system of a telephone service provider."

The bill, in turn, provides that, for the purposes of this prohibition, the term "telephone service provider" has the same meaning as the term "telecommunications carrier" in 47 U.S.C. § 153. Section 153(44) provides that "The term ``telecommunications carrier´´ means any provider of telecommunications services, except that such term does not include aggregators of telecommunications services (as defined in section 226 of this title). A telecommunications carrier shall be treated as a common carrier under this chapter only to the extent that it is engaged in providing telecommunications services, except that the Commission shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage."

The bill then provides that the term "telecommunications services" has the same meaning as the same term defined by 47 U.S.C. § 153, but also includes any "wireless telephone service, including --- (i) cellular telephone service; (ii) broadband Personal Communication Service (`PCS´) telephone service; (iii) Covered Specialized Mobile Radio (`SMR´) service; and (iv) any successor service to such service (including so-called next generation or third generation service)." (Parentheses in original.)

Section 153(46) provides that "The term ``telecommunications service´´ means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used."

The bill was referred to the Senate Judiciary Committee, of which Sen. Durbin is a member.

Sen. Durbin stated in the Senate that "The Chicago Sun Times and other news sources have recently reported that online brokers are illegally obtaining cell phone records and selling them without customers' knowledge. Telephone companies receive many legitimate requests from consumers and law enforcement officials for access to personal records and the requests are handled expeditiously. However, online brokers have taken advantage of the system and begun selling cell phone records to anyone who requests them." See, Congressional Record, January 18, 2006, at page S15.

He continued that "Although current law addresses fraud and identity theft using the Internet, the law does not specifically prohibit the sale of personal information obtained illegally or without the consent of cell phone customers."

Supreme Court Vacates in Will v. Hallock

1/18. The Supreme Court issued its opinion [12 pages in PDF] in Will v. Hallock, a case regarding appellate procedure. The Supreme Court vacated the judgment of the U.S. Court of Appeals (2ndCir) and remanded with instructions to dismiss the appeal for lack of jurisdiction.

The appellate procedure involved does not particularly impact technology law cases. However, the underlying facts that gave rise to this case may be of interest to persons who follow developments in technology law. This case arises out of the Department of Homeland Security's (DHS) incompetence in investigating computer related crimes.

DHS agents seized computer equipment and stored data, from persons whom they mistook, and then proceeded to damage their disk drives and destroy their data. The underlying facts of the case reflect the limited extent to which people are secure in their persons, houses, papers, and effects, in the context of computers and digital media, against seizure and destruction by government agents.

Susan Hallock owned a computer software business that she and her husband, Richard, operated from home.

The DHS's U.S. Customs and Border Protection was investigating criminal activity by a pormographic web site. The Hallock's only connection was that their credit card data had been stolen, and used by another to purchase access to the web site under investigation. Without ascertaining whether the credit card data was stolen, the DHS obtained a search warrant, and seized the Hallocks' computer equipment, software and disk drives.

The DHS then damaged disk drives and destroyed data stored thereon. The Supreme Court wrote that "all of the stored data (including trade secrets and account files) were lost, and the Hallocks were forced out of business." (Parentheses in original.)

The DHS did not compensate the Hallocks for the harm that it caused.

The Hallocks filed two complaints in the U.S. District Court (NDNY). First, they filed a complaint against the United States under the Federal Tort Claims Act (FTCA) alleging negligence by government agents in executing the search. The District Court dismissed this complaint on procedural grounds. It held that the agents' activities occurred in the course of detaining goods and thus fell within an exception to the FTCA's waiver of sovereign immunity. This opinion is reported at 253 F. Supp. 2d 361.

The Hallocks also filed a second complaint in the U.S. District Court (NDNY) against Richard Will and the other individual agents, pursuant the the Supreme Court's opinion in Bivens v. Six Unknown Fed. Narcotics Agents, 403 U. S. 388 (1971). This complaint alleged that the agents damaged the computers, and thus deprived them of property, including business income, in violation of the due process clause of the 5th Amendment.

The defendants moved to dismiss this second complaint, asserting that the dismissal in the first action operated as a judgment bar. The District Court denied this motion, reasoning that the first complaint was dismissed on procedural grounds, and thus cannot raise a judgment bar. This opinion is reported at 281 F. Supp. 2d 425.

The defendants then appealed to the U.S. Court of Appeals (2ndCir), even though there was no final judgment to appeal. The Court of Appeals held that it had appellate jurisdiction, under the collateral order doctrine, and then affirmed the District Court. This opinion is reported at 387 F. 3d 147.

The defendants then filed a petition for writ of certiorari with the Supreme Court. The Supreme Court granted certiorari. In the just released opinion, the Supreme Court held that the Court of Appeals did not have appellate jurisdiction. It thus vacated the opinion of the Court of Appeals, and remanded with instructions to dismiss the appeal.

The black letter law of this case is that a District Court's refusal to apply the judgment bar of the Federal Tort Claims Act is not open to collateral appeal.

Thus, the order and opinion of the District Court denying the defendants' motion to dismiss the Bivens action stands. The Hallocks' Bivens action proceeds. The Supreme Courts' opinion is a victory for the Hallocks, and to some extent, for people who use computers, and store data in digital media. Of course, the Hallocks' action may yet fail on the merits, or on other procedural grounds.

This case is Richard Will, et al. v. Susan Haddock, et al., Sup. Ct. No. 04–1332. This is a petition for writ of certiorari to the U.S. Court of Appeals for the 2nd Circuit. Justice Souter wrote the opinion for a unanimous court.

Rep. Barton and Sen. Stevens Comment on Sale of Customer Phone Data

1/18. Rep. Joe Barton (R-TX), the Chairman of the House Commerce Committee (HCC), Sen. Ted Stevens (R-AK), the Chairman of the Senate Commerce Committee (SCC), both commented on the sale of phone customers' proprietary information. Rep. Barton said that he would introduce legislation when the House convenes. Sen. Stevens stated that the SCC will hold a hearing.

Rep. Barton (at left) stated in a release that "News reports over the last week have exposed a seamy and dangerous intrusion into the privacy of anyone who uses a cell phone. The discovery started with an urgent warning from the Chicago Police Department to its undercover officers, and now we all understand that it is possible to purchase a person's cell phone records over the Internet for about a hundred dollars."

"Both the FBI and news reporters found that they could buy monthly blocs of records detailing every call made to or from a particular phone number. All they needed was enough money and the number they wanted researched", said Rep. Barton. "It appears that dozens of online services offer to sell lists of individual cell phone calls."

He added that "The method by which these records are usually obtained from wireless companies is called 'pretexting.' That is, someone simply impersonates a cell phone owner and asks for access to personal files. Pretexting to get financial records already is illegal, but it is not illegal to use this means to obtain call records.

Rep. Barton stated that "I mean to make it very illegal." He said that "I will introduce legislation to accomplish that, and my bill will substantially increase the penalties if telephone companies release consumer telephone records without the permission of the consumer."

Sen. Stevens stated in a separate release that "Recent reports detailing the ease with which third parties can access private phone records are alarming. Congress must ensure that Americans' phone records are protected and that there will be severe penalties for invading privacy".

He added that the SCC "will examine potential legislative solutions to this growing problem and assess the proper roles of the Federal Communications Commission and Federal Trade Commission. Our Committee will hold a public hearing in the near future to investigate how to better protect phone records."

CTIA P/CEO Steve Largent stated in a release that "Though we believe that prosecutors operating under existing law need not wait for an act of Congress to protect wireless subscribers and carriers from this illegal activity, we certainly welcome the introduction of federal legislation that seeks to put these thieves out of business. We look forward to working with Congress in the coming days and weeks to pass a law that clearly makes this activity a criminal offense."

Cox Says Interactive Data Will Democratize Financial Information and Analysis

1/18. Securities and Exchange Commission (SEC) Chairman Chris Cox gave another speech on interactive data and XBRL. He said that interactive data "has the potential to tap the awesome number crunching and analytical power of today's computers to make SEC reports vastly more useful for investors, analysts, companies and, not least of all, the SEC".

Cox has spoken many times on interactive data and XBRL. See, speech of November 7, 2005, in Tokyo, Japan, and speech of November 11, 2005, in Boca Raton, Florida. See also, story titled "SEC Chairman Cox Discusses Use of Interactive Data in Corporate Reporting" in TLJ Daily E-Mail Alert No. 1,250, Wednesday, November 9, 2005. See also, story titled "SEC Seeks Companies to Participate in Interactive Data Test Group" in TLJ Daily E-Mail Alert No. 1,288, January 12, 2006.

He first spoke about the development of XBRL taxonomies.

He then said that "If you’re a software maker ... the possibilities for you are endless. Let's start with the basics: software that translates the computer gibberish of XBRL filings with the Commission into what any American investor sees today when he or she uses the Internet to look up a company’s forms on EDGAR."

"Then you'd want to design software tools to help companies prepare at least their four main financial statements in XBRL, and then they’ll need to integrate those tools into the existing applications that they rely on for financial management and reporting. But that’s only the beginning", said Cox.

Cox continued that "The retail market is where the SEC also has high hopes, because we're focused on the average investor. We'd like to see the democratization of financial information and analysis, and the empowerment of individual investors. Software that consumers can use to help make wise investment choices, designed either for their personal use or integrated into websites, will run the gamut from RSS feeds about companies and funds to analysis tools built into personal financial software."

More News

1/18. The Department of Homeland Security's (DHS) U.S. Citizenship and Immigration Services (USCIS) issued a release regarding its H1B visa program, which provides visas for high tech workers. It stated that "it has received enough H-1B petitions that qualify for the exemption from the H-1B numerical limitations for foreign workers with a U.S.-earned master's or higher degree (the number of aliens exempted from the H-1B cap on this basis may not exceed 20,000 per fiscal year). Consequently, USCIS has determined that the ``final receipt date´´ for these 20,000 cap-exempt H-1B petitions is January 17, 2006. Petitions received on January 17th are subject to the random selection process described below. USCIS will reject petitions requesting a foreign worker with a U.S.-earned master's or higher degree that are received after the ``final receipt date´´ unless the petitioner or beneficiary is eligible for a separate cap exemption." (Parentheses in original.)

ACLU Sues NSA to Enjoin Domestic Terrorist E-Surveillance

1/17. The American Civil Liberties Union (ACLU) and others filed a complaint [60 pages in PDF] in U.S. District Court (EDMich) against the National Security Agency (NSA) and others alleging that "a secret government program to intercept vast quantities of the international telephone and Internet communications of innocent Americans without court approval" violates freedom of speech and privacy rights under the First and Fourth Amendments of the Constitution.

The plaintiffs include, in a addition to the ACLU and other interest groups, several individuals who communicate with persons in the Middle East as a part of their writing and/or advocacy. The complaint alleges that the NSA program is "disrupting the ability of the plaintiffs to talk with sources, locate witnesses, conduct scholarship, and engage in advocacy".

The complaint asks the Court to declare the NSA program unconstitutional under the First and Fourth Amendments, in violation of the principle of separation of powers, and in violation of the Administrative Procedure Act.

President Bush, other administration officials, and their supporters have often portrayed opposition to the NSA electronic surveillance program and opposition to extension of the expiring provisions of the USA PATRIOT Act as Democrats and political opportunists. See, for example, January 22, 2006, White House press office release titled "Setting the Record Straight: Democrats Continue to Attack Terrorist Surveillance Program".

Some of the plaintiffs in, and supporters of, this complaint do not fit this characterization. For example, one of the named plaintiffs is Christopher Hitchens. He is a professional opinion writer from Great Britain. He is a former left wing radical who has defended the wars in Iraq and Afghanistan. See also, statement by Hitchins.

Also, former Rep. Bob Barr (R-GA) (at right), who is not a named plaintiff, wrote in an article in his web site that "This lawsuit sends a clear message to the administration that American people from across the political spectrum will not stand by while the federal government violates its own laws in ways that severely undermine civil liberties."

He elaborated that "Federal law clearly requires judicial oversight of all electronic surveillance of Americans living in the United States, including anti-terrorism investigations, under both the letter and spirit of the law. Allowing the government to continue to monitor the private phone calls and emails of ordinary Americans without so much as a warrant would set a disturbing precedent for administrations to come. Personal records of individuals not even suspected of wrongdoing could be swept into extensive federal databases for the government to use at will. This is certainly not what our forefathers intended when they guaranteed all Americans freedom from `unreasonable searches and seizures.´"

He added that "as Congress works to reauthorize the Patriot Act, the NSA surveillance case should serve as a reminder of the serious privacy concerns raised by overreaching federal power, underscoring the need for reforming the Patriot Act's controversial secret record search provisions."

The ACLU's attorney of record is Ann Beeson of the ACLU Foundation's New York, New York, office.

9th Circuit Rules in Cell Tower Case

1/17. The U.S. Court of Appeals (9thCir) issued its opinion [14 pages in PDF] in Sprint v. La Canada Flintridge, a cell tower construction case. The Court of Appeals reversed the District Court's summary judgment for the city.

Sprint is a wireless service provider. The City of La Canada Flintridge denied two of Sprint's applications to build cell towers. The city applied a city ordinance that requires that it apply aesthetic considerations in granting construction permits for cell towers.

Sprint filed two complaints (which were later consolidated) in U.S. District Court (CDCal) against the city alleging, among other things, violation of 47 U.S.C. § 332(c)(7)(B)(iii).

This subsection provides that "Any decision by a State or local government or instrumentality thereof to deny a request to place, construct, or modify personal wireless service facilities shall be in writing and supported by substantial evidence contained in a written record."

The District Court held that there was not substantial evidence supporting the city's finding that Sprint's facilities would obstruct the rights-of-way. But, the District Court held that there was substantial evidence supporting the aesthetic rationale for denying the permit.

Sprint appealed. The Court of Appeals reversed. It reasoned that "Because the City overstepped its regulatory authority under state law, its wireless ordinance is invalid, and no evidence supports the City's permit denial. The district court's conclusion that substantial evidence supported the City’s permit denials must be reversed."

This case is Sprint PCS Assets, et al. v. City of La Canada Flintridge, et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 05-55014, an appeal from the U.S. District Court for the Central District of California, D.C. No. CV-03-00039-DOC, Judge David Carter presiding. Judge Diarmuid O'Scannlain wrote the opinion of the Court of Appeals, in which Judges Cynthia Hall and Richard Paez joined.

FTC Sues Company for Submitting False Data to Credit Reporting Agencies

1/17. The Federal Trade Commission (FTC) filed a civil complaint [PDF] in U.S. District Court (DUtah) against Far West Credit, Inc, a consumer reporting agency (CRA), alleging violation of the Fair Credit Reporting Act (FCRA) in connection with its alleged failure to follow reasonable procedures to assure the accuracy of the information in the consumer reports that it sells to mortgage companies. The facts alleged in the complaint illustrate one way in which an entity with an interest in the credits reports issued by CRAs can manipulate those CRAs' reports.

The FTC and Far West Credit simultaneously filed a proposed consent decree [PDF]. It provides, among other things, that Far West Credit will pay a fine of $120,000. The District Court signed the decree on January 17, 2006.

Far West Credit buys credit reports from the three major CRAs, Equifax, TransUnion and Experian, and then merges the data. (None of these three were named as defendants in this complaint.)

In addition, the complaint states that "Where there is insufficient information about a consumer, or no information, at the CRAs, Defendant will accept documentation from the consumer or other interested party on behalf of the consumer, such as a mortgage broker or mortgage originator, purporting to show sources of credit and credit status with businesses that do not report to the nationwide credit bureaus (e.g., landlords, cable companies, utility companies, ``rent-to-own´´ businesses and insurance companies)." (Parentheses in original.)

Keystone Mortgage and Investment Company, Inc., is a home loan originator. The complaint states that Keystone employees provided Far West Credit with false credit information about consumers when Keystone had a financial interest the completion of loans to these consumers.

The complaint further alleges that Far West Credit did not adequately review this false credit information, even though some of it was false on its face. And this, in turn, caused mortgage lenders to extend credit to persons who subsequently defaulted.

This case is FTC v. Far West Credit, Inc., U.S. District Court for the District of Utah, D.C. No. 2:06-CV-00041 (TC), Judge Tena Campbell presiding.

FCC to Investigate Sale of Customer Phone Data

1/17. Federal Communications Commission (FCC) Commissioner Jonathan Adelstein stated in a release [PDF] that the FCC's Enforcement Bureau has launched an investigation into reports of data brokers obtaining and selling consumers' phone data.

On January 13, 2006, Sen. Harry Reid (D-NV), the Senate Democratic leader, sent a letter to FCC Chairman Kevin Martin requesting that the FCC conduct an investigation. See, story titled "Sen. Reid Asks FCC to Investigate Sale of Consumer Phone Data" in TLJ Daily E-Mail Alert No. 1,291, January 17, 2006.

Adelstein stated that the FCC "must also take immediate steps to ensure that we have strong consumer privacy rules in place and that phone companies are employing effective safeguards to shield this data from harm. The FCC’s Enforcement Bureau has launched an investigation into these troublesome data brokering practices, and I support swift action against carriers that have not complied with our existing rules and procedures."

He added that "a petition for rulemaking on enhanced consumer data protection standards filed by the Electronic Privacy Information Center (EPIC) in August 2005 could be an appropriate vehicle for tightening our rules. I support quick action by the Commission to address any abuses of this private information." See, petition, filed on August 30, 2005, in CC Docket No. 96-115, by Chris Hoofnagle of the Electronic Privacy Information Center (EPIC).

Commissioners Michael Copps stated in a separate release [PDF] that "I am pleased that the FCC is launching an inquiry. This must be a priority because every day such a problem exists puts American citizens needlessly at risk. So, we must move swiftly to determine how and to what extent data brokers are obtaining Americans’ private phone records. The FCC also must determine if phone companies are doing enough to protect the personal and private information with which they are entrusted. We should then act quickly ourselves, and as the government’s telecommunications expert, assist Congress and other Agencies to do so as well. Congress recognized that privacy is a critical consumer right and enshrined this right in the law."

Copps too advocated action on the EPIC petition.

Rice and Chertoff Discuss Visas

1/17. Michael Chertoff, the Secretary of Homeland Security, and Condoleezza Rice, the Secretary of State, spoke at an event in Washington DC titled "Joint Vision: Secure Borders and Open Doors in the Information Age". See, Chertoff speech and Rice speech.

Chertoff discussed the e-Passport program and the US-VISIT program. He also stated that the goal is to achieve the "right balance between securing our country and welcoming those who want to visit, work and study in the United States".

Rice said that "We are also renewing America's welcome to students and professors and researchers. At all of our 210 visa processing posts, getting visas into the hands of foreign students is becoming a top priority. In addition, we are actively encouraging students, researchers and scientists to pursue their studies in the United States. In the coming months, our two departments will work together to expand the length of time that foreign students can arrive and live and learn in America."

Rice also said that "we're renewing America's welcome to business people and entrepreneurs. For our economy to continue to grow and prosper, the foreign employees and customers of our business community must be able to enter our country quickly and efficiently. To improve this process, State and DHS are enrolling companies for expedited visa processing and we are making visa application forms and comprehensive information available online, a process that we will soon expand."

Consumer Electronics Association (CEA) P/CEO Gary Shapiro responded in a release that "We encourage the Departments of State and Homeland Security to continue their efforts to increase the transparency, efficiency and predictability of the visa process, including investing in systems and devoting resources that will make a difference for the business community ..."

People and Appointments

1/17. President Bush gave a recess appointment to Boyden Gray to be U.S. representative to the European Union. See, White House release. Bush first nominated Gray for this position in July of 2005. See, story titled "Bush Nominates Boyden Gray to be US Representative to EU" in TLJ Daily E-Mail Alert No. 1,182, July 26, 2005. The Senate Foreign Relations Committee approved the nomination. The full Senate has not acted.

1/17. Andy Maner, the Chief Financial Officer for the Department of Homeland Security (DHS), resigned, effective March 3, 2006. See, DHS release.

More News

1/17. The Supreme Court denied a motion to file a petition for writ of certiorari out of time in Venkatraman v. REI Systems, a racial discrimination case involving the H1B visa program. See, Order List [7 pages in PDF] at page 1. This is Sup. Ct. No. 05M44. On July 29, 2005, the U.S. Court of Appeals (4thCir) issued its opinion [PDF]. Venkatraman is a software engineer who alleged racial discrimination, and illegal conduct in the hiring of foreign workers under the H1B visa program. The District Court dismissed his complaint. The Court of Appeals affirmed. It held that his employment discrimination claim fails because he failed to exhaust administrative remedies. It also held that there is no private right of action against an employer for lying to the INS to obtain H1B visas for high tech workers. See, story titled "4th Circuit Rules in Software Engineer's Employment Discrimination Case" in TLJ Daily E-Mail Alert No. 1,193, August 11, 2005.

Go to News from January 11-15, 2006.