TLJ News from May 6-10, 2008

PFF Paper Argues Against State Cable Carrier Mandates

5/8. The Progress & Freedom Foundation (PFF) released a paper [20 pages in PDF] titled "State Mandates for Program Carriage Dispute Resolution: Welcome to the Wide World of Regulation". The author is the PFF's Barbara Esbin.

She states that "Several state legislatures are being asked to consider adoption of legislation proposed by the NFL Network that would compel vertically integrated cable operators to submit carriage disputes with independent programmers to commercial arbitration if the parties fail to strike program carriage deals."

She adds that the NFL Network has complained that "vertically-integrated cable operators who own competing programming are treating it unfairly by seeking to place the NFL Network on a sports, rather than widely-distributed basic, digital programming tier, for which subscribers would pay extra."

Esbin states that these proposals would "effectively require vertically integrated cable operators to carry every sports, news and entertainment programming service at a price set by an arbitrator on the terms and conditions of carriage proposed by the programmer."

She argues against the creation of "new, unnecessary and undoubtedly unconstitutional state carriage mandates".

She argues that the Communications Act, as amended by the Cable Act of 1992, already provides remedies at the Federal Communications Commission (FCC).

She also argues that "State mandated arbitration would substantially increase the bargaining power of some video programming suppliers at the expense of video programming distributors. Yet, there is no demonstration of market failure supporting such one-sided interference into private commercial negotiations."

People and Appointments

5/8. Federal Communications Commission (FCC) Chairman Kevin Martin named Elizabeth Andrion his acting legal advisor for media issues, and Amy Bender his acting legal advisor for wireline issues. Andrion was previously Deputy Chief of the FCC's Office of Strategic Planning and Policy Analysis. Bender was previously Legal Counsel to the Chief of the FCC's Wireline Competition Bureau. Before joining the FCC, she worked for the law firm of Wiley Rein. Michelle Carey, who was advising Martin on media issues, is on maternity leave from the FCC. Ian Dillner, who was advising Martin on wireline issues, is on leave from the FCC to work for the House Commerce Committee (HCC). See, FCC release and Martin's staff page.

5/8. President Bush nominated Judge Glen Conrad to be a Judge of the U.S. Court of Appeals (4thCir).  See, White House release. He has been a Judge of the U.S. District Court (WDVa) since 2003. Before that he was a long time U.S. Magistrate. Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), stated in a release that "Today's nomination of Judge Glen Conrad for a Virginia seat on the Fourth Circuit is another example of the progress that can be made when the President works with the Senate. I commend Senator Warner and Senator Webb for their hard work in resolving the impasse over Virginia seats on the Fourth Circuit. Progress was long coming, but I commend the President for now taking the advice of Senator Warner and Senator Webb. In doing so, the President may have cleared the way for the Senate to consider another nominee in the short time remaining to us this year."

5/8. Megan Gray left the Washington DC law office of Roylance Abrams to open a private practice. She focuses on copyright and trademark litigation and prosecution, and free speech and internet issues. She also lobbies the Congress, negotiates and drafts internet contracts, advises clients on privacy concerns, and analyzes trade secret claims. Her clients include companies in the textile, apparel, software, toy, greeting card, graphic art, real estate and jewelry industries.

5/8. The Senate confirmed William Burns to be Under Secretary of State (Political Affairs). See, Congressional Record, May 8, 2008, at Page S3986.

More News

5/8. The Senate Commerce Committee (SCC) reported SJRes 28, which provides that "That Congress disapproves the rule submitted by the Federal Communications Commission relating to broadcast media ownership" and "such rule shall have no force or effect." The SCC approved this resolution, without amendment, on April 24, 2008. See, story titled "Senate Commerce Committee Approves Resolution Condemning FCC Media Ownership Order" in TLJ Daily E-Mail Alert No. 1,753, April 24, 2008. See, Senate Report No. 110-334.

House IP Subcommittee Approves Orphan Works Bill

5/7. The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet and Intellectual Property (SCIIP) amended and approved HR 5889 [LOC | WW | PDF], the "Orphan Works Act of 2008".

The Subcommittee approved by unanimous voice vote a managers' amendment [4 pages in PDF] offered by Rep. Howard Berman (D-CA) and others.

Rep. Zoe Lofgren (D-CA) offered, but later withdrew, three amendments. See, (1, 2, and 3).

Rep. Adam Schiff (D-CA) offered, but later withdrew, two amendments. (See, 1 and 2.)

The Subcommittee then approved the bill as amended, by voice vote. Rep. Steve Chabot (R-OH) voted no.

Rep. Berman, the Chairman of the SCIIP, stated that the HJC will hold a closed meeting with interested parties before the full Committee mark up. Speaking with reporters after the markup he predicted that the full Committee markup would be in "much less than two months, but not necessarily next week".

See also, TLJ mark up of HR 5889, showing changes made by the managers' amendment, and changes that would be made by each of the Lofgren and Schiff amendments, if adopted.

See, full story.

House Passes PRO IP Act

5/7. The House approved HR 4279 [LOC | WW], the "Prioritizing Resources and Organization for Intellectual Property Act of 2007" or "PRO IP Act", by a vote of 410-11. See, Roll Call No. 300.

Rep. Rick Boucher (D-VA) and Rep. Zoe Lofgren (D-CA) were among those who voted against the bill.

This huge bill addresses remedies for infringement and counterfeiting and the organization and funding of government efforts to enforce intellectual property rights.

See also, story titled "Representatives Introduce PRO IP Act" in TLJ Daily E-Mail Alert No. 1,683, December 5, 2008; story titled "House Subcommittee Amends PRO-IP Act" in TLJ Daily E-Mail Alert No. 1,727, March 05, 2008; and, story titled "House Judiciary Committee Approves PRO IP Act" in TLJ Daily E-Mail Alert No. 1,758, May 1, 2008.

Patrick Ross, head of the Copyright Alliance, praised the bill in a release. He also stated that this bill "makes it harder for infringers to get off on technicalities related to Copyright Office filings. It spurs the creation of a coordinated plan for enforcing IP rights. It extends outreach to other countries on IP enforcement. And it creates a White House position to coordinate -- not supplant -- the many agencies involved in IP, such as USTR, Justice, Commerce, USPTO, US Copyright Office, State, Homeland Security, and others."

Dan Glickman, head of the Motion Picture Association of America (MPAA), stated in a release that this bill "can improve our nation’s economic outlook".

Mitch Bainwol, head of the Recording Industry Association of America (RIAA), stated in a release that this bill is a "strong, common sense measure that provides new tools and resources to help protect one of this nation’s most important economic engines".

Reps. Matheson and Terry Introduce Video Game Regulation Bill

5/7. Rep. Jim Matheson (D-UT) and Rep. Lee Terry (R-NE) introduced HR 5990 [LOC | WW], the "Video Games Ratings Enforcement Act".

Rep. Jim MathesonRep. Matheson (at right) stated in a release that "Too many children are spending too much time playing inappropriate video games that most parents would find shocking and objectionable ... As a parent, I know that I’m the first line of defense against my kids playing Mature-rated video games. But parents can't be everywhere monitoring everything and some reasonable, common sense rules ought to be in place to back parents up."

Rep. Terry stated in a release that this bill "would require all retailers to check identification for any children trying to buy or rent M-rated (Mature) or AO-rated (Adult Only) games. It also requires that ratings system explanations be posted in stores so that parents can make the best decisions for their family about which games children can purchase or rent."

Bill Summary. First, this bill would impose a ratings label requirement. It provides that "It shall be unlawful for any person to ship or otherwise distribute in interstate commerce, or to sell or rent, a video game that does not contain a rating label, in a clear and conspicuous location on the outside packaging of the video game, containing an age-based content rating determined by" the Entertainment Software Ratings Board (ESRB).

Second, this will would prohibit the sale or rental of adult rated video games to minors. It provides that "It shall be unlawful for any person to sell or rent, or attempt to sell or rent -- (1) any video game containing a content rating of `Adults Only´ (as determined by the Entertainment Software Ratings Board) to any person under the age of 18; or (2) any video game containing a content rating of `Mature´ (as determined by such Board) to any person under the age of 17." (Parentheses in original.)

Then, the bill would give rulemaking and civil enforcement authority to the Federal Trade Commission (FTC).

The bill would require that the FTC "shall", within 180 days of enactment, "promulgate rules requiring all retail establishments engaged in the sale of video games to display, in a clear and conspicuous location, information about the content rating system of the Entertainment Software Ratings Board. Such rules shall prescribe the information required to be displayed concerning the basic age-based content ratings of such Board."

The bill would provide that the FTC shall treat violations of either the ratings label requirements, or the sale to minors prohibition, as "a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B))."

The bill was referred to the House Commerce Committee (HCC).

Related Bills. Many bills related to video games have been introduced in this and earlier Congresses. See for example:

Litigation. The video game industry has been successful in obtaining judicial relief against legislative regulation of video game sales.

For example, on March 17, 2008, the U.S. Court of Appeals (8thCir) issued its opinion [8 pages in PDF] in Entertainment Software Association v. Swanson, affirming the District Court's permanent injunction against enforcement of a statute of the state of Minnesota that prohibits minors from purchasing or renting certain video games.

Minnesota enacted a statute titled "Minnesota Restricted Video Games Act", which is now codified at Minnesota Statutes Section 325I.06, that provides that a person under the age of 17 may not knowingly rent or purchase a video game rated AO or M by the ESRB, and that violation is subject to a civil penalty of up to $25.

The Entertainment Software Association (ESA) and Entertainment Merchants Association (EMA) filed a complaint [PDF] in U.S. District Court (DMinn) against Lori Swanson, in her capacity as Attorney General of Minnesota seeking an injunction on constitutional grounds. The District Court enjoined enforcement of the statute. It reasoned that the video games a protected speech, and that strict scrutiny analysis is applicable. This order [PDF] is reported as Entertainment Software Ass’n v. Hatch, 443 F. Supp. 2d 1065 (2006).

Minnesota appealed. The Court of Appeals affirmed. See also, story titled "8th Circuit Affirms Injunction of State Regulation of Violent Video Games" in TLJ Daily E-Mail Alert No. 1,732, March 18, 2008.

Similarly, on November 28, 2006, the U.S. Court of Appeals (7thCir) issued its opinion in ESA v. Blogojevich, a constitutional challenge to the Illinois Sexually Explicit Video Game Law (SEVGL). The Court of Appeals affirmed the judgment of the District Court that the statute violates the First Amendment.

The Court of Appeals held that there are numerous constitutional infirmities with the statute. It held that the state's criminalization of the sale of "sexually explicit" video games to minors is overbroad, not narrowly tailored, and is not the least restrictive alternative. It also held that the state's mandating of labels on games and signs in stores constitutes impermissible compelled speech.

See also, story titled "7th Circuit Holds Illinois Video Game Law Unconstitutional" in TLJ Daily E-Mail Alert No. 1,495, November 29, 2006.

Rep. Langevin Introduces Bill Related to Information Security at DHS

5/7. Rep. James Langevin (D-RI) introduced HR 5983 [LOC | WW], the "Homeland Security Network Defense and Accountability Act of 2008 ", a bill related to information security at the Department of Homeland Security (DHS).

The bill specifies duties, qualifications, and functions of the DHS's Chief Information Officer (CIO).

The bill also provides that the DHS's CIO shall "establish security control testing protocols that ensure that the Department's information infrastructure is effectively protected against known attacks against and exploitations of Federal and contractor information infrastructure".

The bill also addresses the DHS's use of outside contractors that provide network services to the DHS.

It requires that the DHS "must determine that the contractor has an internal information systems security policy that complies with the Department's information security requirements, including with regard to authentication, access control, risk management, intrusion detection and prevention, incident response, risk assessment, and remote access, and any other policies that the Secretary considers necessary to ensure the security of the Department's information infrastructure."

The bill was referred to the House Homeland Security Committee (HHSC). See also, Rep. Langevin's release.

Rep. Conyers and Rep. Lofgren Introduce Antitrust Based Network Neutrality Bill

5/7. Rep. John Conyers (D-MI) and Rep. Zoe Lofgren (D-CA) introduced HR 5994 [LOC | WW | PDF], the "Internet Freedom and Nondiscrimination Act of 2008"

This bill is very similar, but not identical, to a bill introduced in the 109th Congress, HR 5417 [5 pages in PDF], the "Internet Freedom and Nondiscrimination Act of 2006". For a summary of that bill, see story titled "Sensenbrenner and Conyers Introduce Net Neutrality Bill" in TLJ Daily E-Mail Alert No. 1,375, May 22, 2006.

The just introduced bill follows HR 5417's amendments to the Clayton Act. However, it contains new language regarding exceptions for network management, and other matters.

See, full story.

Copyright Office Terminates Phantom Signal Proceeding

5/7. The Copyright Office (CO) published a notice in the Federal Register announcing that it has terminated its proceeding regarding phantom signals.

On December 12, 2007, the CO published a notice in the Federal Register that announced, described, and set comment deadlines for, a Notice of Inquiry (NOI) regarding the meaning of the Copyright Act's term "cable system", and issues related to the phantom signal phenomenon.

The National Cable and Telecommunications Association (NCTA) had previously filed of a petition for rulemaking to address cable copyright royalty issues arising from the current definition of "cable system".

See, story titled "Copyright Office Issues Notice of Inquiry Regarding Cable Systems" in TLJ Daily E-Mail Alert No. 1,688, December 13, 2007.

The CO wrote in its May 7, 2008, notice that "After reviewing the record in this proceeding, the Copyright Office finds that it lacks the statutory authority to adopt rules sought by the cable industry. The Copyright Office, however, clarifies regulatory policy regarding the application of the 3.75% fee to phantom signals. This proceeding is terminated." See, Federal Register, May 7, 2008, Volume 73, Number 89, at Pages 25627-25633.

People and Appointments

5/7. The Senate Judiciary Committee (SJC) held an executive business meeting. The nomination of Steven Agee to be a Judge of the U.S. Court of Appeals (4thCir) was on the agenda. However, this nomination was held over. It is now on the agenda for the SJC's executive business meeting of May 14, 2008.

5/7. President Bush nominated William Wilkins to be the U.S. Attorney for the District of South Carolina for the term of four years. See, White House release.

More News

5/7. The Senate Judiciary Committee (SJC) held an executive business meeting. S 1738 [LOC | WW], the "Combating Child Exploitation Act" was on the agenda. However, it was held over. This bill is now on the agenda for the SJC's executive business meeting of May 14, 2008.. S 1738 would, among other things, provide for more Department of Justice (DOJ) regional computer forensic laboratories, and provide that "crimes against children" are predicate offenses for the issuance of wiretap orders to state law enforcement agencies.

Rep. Price Introduces Bill to Increase Transparency in Intelligence Contracting

5/6. Rep. David Price (D-NC) and Rep. Janice Schakowsky (D-IL) introduced HR 5973 [LOC | WW], the "Transparency and Accountability in Intelligence Contracting Act of 2008", a bill to require a slight increase in transparency and accountability within the intelligence community for activities performed under federal contracts.

This bill would require the Director of National Intelligence (DNI) to submit an annual assessment to the Congress regarding the use of private contractors and private contractor personnel. Although, this assessment would only contain summary data. For example, it would not, with exceptions, require the disclosure of the names of the contractors, or the subject matter of the contracts.

The bill requires further reporting to the Congress on the use of private contractors to perform intelligence activities. The bill defines this to include the "Conduct of electronic or physical surveillance or monitoring of United States citizens in the United States", as well as "Intelligence collection" and "Intelligence analysis".

The reference to US citizens in the US might be interpreted to exclude from the scope of the bill all electronic surveillance for intelligence agencies, including those where US citizens in the US are a party to the surveilled communications.

The vaguely worded bill does not expressly require the disclosure of the names of the contractors, or the purpose of the contracts. However, it does require "an identification of contracts where the contractor is providing a substantially similar functions to a Government employee".

Otherwise, the DNI must provide assessments of "costs" and "the appropriateness of using contractors", and analyses of "attrition", "accountability mechanisms", and "oversight".

This vaguely worded bill is unclear as to what specificity would be required in these DNI reports about contracts with communications, internet, software, or information technology companies.

This bill was referred to the House Intelligence Committee, House Armed Services Committee, and House Judiciary Committee. Neither Rep. Price nor Rep. Schakowsky is a member of any of these Committees. They are members of the House Appropriations Committee and House Commerce Committee, respectively.

Sens. Specter and Lieberman Introduce Bill Regarding Foreign Forum Shopping Libel Actions

5/6. Sen. Arlen Specter (R-PA) and Sen. Joe Lieberman (D-CT) introduced S 2977 [LOC | WW], the "Free Speech Protection Act of 2008", a reaction to litigation in foreign courts directed at suppressing Constitutionally protected speech in the United States.

This bill, as introduced, is substantially identical to HR 5814 [LOC | WW], as introduced, which is also titled the "Free Speech Protection Act of 2008". These bills would provide relief to speakers and publishers in the US who find themselves subjected to libel litigation in foreign countries for speech that is protected by the First Amendment in the US.

See also, story titled "Rep. King Introduces Free Speech Protection Act" in TLJ Daily E-Mail Alert No. 1,756, April 29, 2008.

The risk of distant foreign litigation is heightened by internet publication of speech in digital format, and by internet based sales of hard copies.

Sen. Arlen SpecterSen. Specter (at right) stated in the Senate that "American journalists and academics must have the freedom to investigate, write, speak, and publish about matters of public importance, limited only by the legal standards laid out in our First Amendment jurisprudence, including precedents such as New York Times v. Sullivan. Despite the protection for free speech under our own law, the rights of the American public, and of American journalists who share information with the public, are being threatened by the forum shopping of defamation suits to foreign courts with less robust protections for free speech." See, Congressional Record, May 6, 2008, at Page S3793.

The Supreme Court's landmark opinion in New York Times v. Sullivan is reported at 376 U.S. 254 (1964).

He continued that "These suits are filed in, and entertained by, foreign courts, despite the fact that the challenged speech or writing is written in the U.S. by U.S. journalists, and is published or disseminated primarily in the U.S. The plaintiff in these cases may have no particular connection to the country in which the suit is filed. Nevertheless, the U.S. journalists or publications who are named as defendants in these suits must deal with the expense, inconvenience, and distress of being sued in foreign courts, even though their conduct is protected by the First Amendment."

He reviewed litigation in English and U.S. courts involving Rachel Ehrenfeld and her book [Amazon] titled "Funding Evil: How Terrorism Is Financed -- and How to Stop It". See also, stories titled "2nd Circuit Affirms in Ehrenfeld v. Mahfouz" and "New York Senate Passes Libel Terrorism Protection Act" in TLJ Daily E-Mail Alert No. 1,725, March 3, 2008.

He then summarized his bill. He said that "This legislation creates a Federal cause of action and Federal jurisdiction so that Federal courts may determine whether there has been defamation under U.S. law when a U.S. journalist, speaker, or academic is sued in a foreign court for speech or publication in the U.S. The bill authorizes a court to issue an order barring enforcement of a foreign judgment and to award damages."

4th Circuit Affirms in Criminal Copyright Infringement Case

5/6. The U.S. Court of Appeals (4thCir) issued its opinion [10 pages in PDF] in US v. Armstead, a criminal copyright infringement case involving the sale of 300 counterfeit DVDs to an undercover federal agent. The Court of Appeals affirmed the judgment of the District Court.

Armstead sold 100 counterfeit DVDs of movies for $500, and then another 200 for $1000, to an undercover agent of the Bureau of Immigration and Customs Enforcement. The DVDs were made by using a hand held camcorder to record the films as they played in movie theaters. The movies were then available to the public legally only in theatrical release.

A grand jury returned an indictment charging Armstead with two felony counts of willful copyright infringement for private financial gain by distributing at least 10 unauthorized DVDs on each occasion, having a total retail value of more than $2,500, in violation of 17 U.S.C. § 506(a)(1) and 18 U.S.C. § 2319(b)(1).

A trial jury returned a verdict of guilty on both counts.

Armistead brought the present appeal, arguing that the total amount of his sales did not meet the minimum threshold for felony infringement.

Section 506(a)(1) provides, in part, that "Any person who willfully infringes a copyright shall be punished as provided under section 2319 of title 18, if the infringement was committed --- (A) for purposes of commercial advantage or private financial gain; (B) by the reproduction or distribution, including by electronic means, during any 180-day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000; or ..."

The Section 2319(b)(1) provides that "Any person who commits an offense under section 506 (a)(1) of title 17 --- (1) shall be imprisoned not more than 5 years, or fined in the amount set forth in this title, or both, if the offense consists of the reproduction or distribution, including by electronic means, during any 180-day period, of at least 10 copies or phonorecords, of 1 or more copyrighted works, which have a total retail value of more than $2,500".

18 U.S.C. § 2311 defines "value" as "the face, par, or market value, whichever is the greatest, and the aggregate value of all goods, wares, and merchandise, securities, and money referred to in a single indictment shall constitute the value thereof".

Specifically, Armistead argued that he could not be convicted and sentenced under Section 2319(b)(1) because he sold the DVDs for a total of $1,500, which is less than $2,500.

The District Court and Court of Appeals both rejected this argument.

The Court of Appeals held that "retail value" within the meaning of Section 2319(b)(1) "refers to the value of copies of the copyrighted material at the time the defendant committed the violation and sold the copies and that the retail value is determined by taking the highest of the ``face value,´´ ``par value,´´ or ``market value´´ of copies of the copyrighted material in a retail context. See 18 U.S.C. § 2311."

Also, even though the prosecution obtained a felony conviction, the sentence was only six months of home detention.

This case is USA v. David Armstead, U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 05-5157, an appeal from the U.S. District Court for the Eastern District of Virginia, at Alexandria, D.C. No. CR-05-13, Judge Leonard Wexler presiding.

NFL Network Files Complaint with FCC

5/6. The National Football League (NFL) filed a administrative complaint with the Federal Communications Commission (FCC) against Comcast alleging discriminatory and anticompetitive behavior in violation of the Cable Act of 1992.

The NFL states in a web page titled "Truth About Cable Monopolies" that "Football fans are being held hostage: either they pay extra to subscribe to the cable company’s ``sports tier´´ and spend hundreds of dollars a year for additional channels they don’t want -- or they're totally blocked from receiving high-quality NFL football programming on NFL Network."

It adds that "Comcast, Time Warner and Cablevision have a double standards when it comes to sports channels. Channels they own, like Versus and the Golf Channel are included in the basic lineup. Independent channels like NFL Network get left out in the cold. This is unfair and anti-consumer."

47 U.S.C. § 548 addresses "Development of competition and diversity in video programming distribution" and 47 U.S.C. § 536 addresses "Regulation of carriage agreements".

Neither the NFL, nor its counsel, responded to requests from TLJ for a copy of the complaint.

House Commerce Committee Members Advocate Keeping ICANN and Root Server System in US

5/6. Sixteen members of the House Commerce Committee (HCC) sent a letter [PDF] to Secretary of Commerce Carlos Gutierrez regarding the Department of Commerce's (DOC) National Telecommunications and Information Administration's (NTIA) relation with the Internet Corporation for Assigned Names and Numbers (ICANN), and in particular, the agreements between the NTIA and the ICANN titled "Memorandum of Understanding" (MOU), or "Joint Project Agreement" (JPA).

The HCC members want both the ICANN headquarters and root server system to remain in the U.S.

The signers of the letter include Rep. John Dingell (D-MI), Rep. Joe Barton (R-TX), Rep. Ed Markey (D-MA), and Rep. Cliff Stearns (R-FL), the Chairman and ranking Republicans of the HCC and its Subcommittee on Telecommunications and the Internet.

They wrote that "Any change that threatens the important U.S. role in promoting U.S. commercial and free speech principles on the Internet can only hurt the consumers and businesses that count on this network every day."

They wrote that "While it remains the best option for reaching consensus in an increasingly divided world, we also believe ICANN can and should ensure transparency and promote greater accountability in its operations. We certainly hope that the Department will not abandon its role, now or in the near future, in facilitating the transition of the technical management and coordination of the domain name system to the private sector. The current model, which emphasizes private sector leadership, remains a sound approach to ensure the stability and security of the Internet."

They also asked Gutierrez to respond to a set of written interrogatories within two weeks. First, the asked whether, and if so how, the DOC intends to continue its oversight role of ICANN "to ensure the stability and security of the core Internet infrastructure?"

They also asked whether the DOC intends "to ensure that the key facilities of the root server system continue to be housed in the United States?"

Finally, they wrote this. "The Chairman of ICANN said in February 2008, at the Department's public meeting, ``Among the respondents there were concerns expressed that ICANN will leave the United States and seek broad immunities from legal process by third parties or contracting parties. Let me be loud and clear on this. That will not happen. The U.S. for historic and practical reasons will remain ICANN's headquarters.´´ How does the Department intend to ensure that ICANN fulfills this commitment?"

See, February 28, 2008, speech [13 pages in PDF] by Peter Thrush, at page 12.

See also, NTIA document of April 2, 2008, titled "Statement on the Mid-Term Review of the Joint Project Agreement (JPA) Between NTIA and ICANN".

The ICANN has also solicited and received numerous comments on these and related issues. The following is a summary of some of these comments.

Tom Lenard, head of the Technology Policy Institute, wrote in a February 4, 2008, comment [8 pages in PDF] to the ICANN that "there are only two factors that make ICANN accountable: U.S. commercial law and the JPA. Therefore, terminating the JPA and the remaining tie to the U.S. government would be a major step."

He elaborated that "ICANN has indicated that it intends to continue operating under U.S. law. In the absence of a JPA, however, it is not clear what would prevent ICANN from trying to change that status in the future and perhaps operate as an international organization. That would be a major change, depriving companies who are subject to ICANN decisions recourse under U.S. law."

He concluded that "there are many countries that do not share our commitment to promoting innovation, free markets and the free flow of information. It is not difficult to envision a governance structure that would be far less friendly to the development of the Internet than the one we now have."

Robert Atkinson, head of the Information Technology and Innovation Foundation (ITIF) wrote in a comment [5 pages in PDF] that "the U.S. government has had and continues to play an important role in maintaining the security, stability, and openness of the Internet. Currently, the JPA provides a backstop to ensure that ICANN satisfies its responsibilities in effectively managing the Internet’s domain name and addressing system. This provides the necessary assurance to the millions of companies that invest in and use the Internet for business that the Internet will continue be governed in a fair, open and transparent manner. Given that private companies have been responsible for the deployment of the existing Internet infrastructure, the U.S. government should continue to support an Internet governance structure that provides these companies a voice for their concerns and interests."

Atkinson wrote that "Without the JPA providing an effective backstop to ICANN’s original operating principles, there would be no mechanism in place to stop foreign governments from interfering with ICANN’s operations. For example, Internet users and businesses worry that countries such as Russia or China may manipulate ICANN to censor online content."

Jim Dempsey, of the Center for Democracy and Technology (CDT), wrote in a comment [11 pages in PDF] dated January 25, 2008, that "there are countries that want to control the DNS. ICANN benefits today from a paradox: The current role of the U.S. government through the JPA and the separate contract with ICANN regarding the Internet’s root zone file protects the DNS against interference by other governments, some of which are much more likely to try to use any power over the DNS to interfere with innovation, competition and freedom of expression than the U.S. government has done under the present system. The fact is, despite a few very unwise lapses, the U.S. government has not harmed the core functions of the Internet and has not used its power over ICANN to interfere with the free flow of information, whereas other governments have made it clear that they would interfere if they could."

He added that "The continued role of the U.S. government is not optimal. It violates the express intent of the U.S. government when it created ICANN and is not justifiable on a long-term basis. However, at this point, ICANN has not identified procedures or mechanisms that would ensure in the long run its procedural transparency or protect it against undue commercial or governmental interference."

Fabrizio Vayra of Time Warner wrote in a comment [PDF] of February 15, 2008, that the ICANN's "decision-making processes remain convoluted and difficult for private sector companies to participate in effectively", and "much more needs to be done before ICANN can accurately lay claim to the label of being ``private-sector-led.´´"

Mike Kirk, head of the American Intellectual Property Law Association (AIPLA) wrote in a February 13, 2008, comment [4 pages in PDF] that "rampant trademark and copyright infringement taking place on the internet in the form of trademark cybersquatting, sale of counterfeit merchandise, unauthorized music and video downloads, etc. Criminal activity, including phishing (identity theft) and child pornography, continues and is growing. The ability to quickly identify and contact the operators of websites involved in these activities is critical to effective IP and law enforcement efforts." (Parentheses in original.)

He argued that "continued U.S. government involvement is critical to insuring the stability, integrity, and security of the internet; the enforcement of registrar contracts to ensure that abusers of the domain name system and other infringers are disciplined; and the continuation and enhancement of meaningful and effective private sector input into the management of the domain name system. We oppose any attempt to dilute private sector input by moving ICANN outside U.S. court jurisdiction and/or transitioning to a United Nations-like oversight and management regime."

Richard Nessary of eBay wrote in a February 15, 2008, comment [4 pages in PDF] that "As we police our trademarks online, and seek to prevent online frauds that threaten our community, eBay consistently encounters activity by ICANN-accredited registrars, and by domain name registries, that suggests non-compliance with contracts that these entities have signed with ICANN. These problems include, but are by no means limited to, compliance with contractual provisions relating to Whois."

He also wrote that "the current Whois system can and must be improved, especially with regard to the accuracy of Whois data, and with regard to the hiding of this data through proxy and private registration services".

Robin Gross of IP Justice wrote in a February 15, 2008, comment [3 pages in PDF] that the "ICANN needs to commit to the protection of civil liberties, in particular, respect and adherence to internationally recognized principles of freedom of expression and privacy rights. Given its unique function, ICANN must be required to provide at least the same level of protection to citizen’s fundamental rights that are enshrined in the Universal Declaration of Human Rights and numerous national laws. Therefore, a mechanism to ensure accountability for violations of citizens’ basic human rights to communicate freely and privately on the Internet must be put into ICANN’s governance structure before it can be cut-lose."

She argued for less intellectual property protection. She wrote that "ICANN has consistently bowed to the wishes of the intellectual property industry lobby and enacted policies that expand intellectual property rights in Cyberspace and curtail free expression and innovation. Another example can be found in ICANN’s ``whois´´ database policy, which publishes personal information about Internet users for worldwide publication, in violation of many international and national privacy laws."

The government of Syria submitted a comment [PDF] stating that the JPA should be ended. The government of Sudan submitted a comment stating that the JPA should be ended.

DHS Under Secretary Discusses Terrorism and the Cyber Realm

5/6. Charles Allen, Under Secretary for Intelligence and Analysis at the Department of Homeland Security (DHS), gave a speech in which he discussed terrorism and the internet.

Charles AllenAllen (at right) said that "we are facing a daunting network of adversaries who understand the power of information, and increasingly understand the power of the cyber realm".

He discussed attacks on information systems. However, he spoke more about Islamic terrorists' use of internet based communications.

Cyber Terrorism and HSPD 23. Regarding cyber terrorism, he said that "One of the most challenging threats that we must face, in my opinion, is cyber, that will take us to the next level in safeguarding federal information systems from hostile attacks -- whether they are state-directed or the work of non-state actors."

He continued that "The recently signed President's directive represents a game-changing approach that will take advantage of the capabilities of our intelligence collectors to prevent or minimize disruptions to our critical information infrastructure, thereby protecting the public, the economy, government services, and our national security."

Allen did not further identify this "directive". However, on or about January 8, 2008, President Bush may have signed a document titled "National Security Presidential Directive 54 / Homeland Security Presidential Directive 23" that created an initiative titled "Comprehensive National Cybersecurity Initiative" or "CNCI".

Neither Bush, the White House press office, nor other federal agencies announced this document or initiative at the time. Nor has it been released to the public since then. However, federal agencies, including the DHS, and others, have referenced it since.

See for example, letter of the Business Software Alliance (BSA) to Bush dated February 1, 2008.

The DHS stated in a release on April 8, 2008, that this document "formalized a series of continuous efforts designed to further safeguard Federal Government systems and reduce potential vulnerabilities, protect against intrusion attempts, and better anticipate future threats."

This DHS release also states that "efforts to protect our Federal network systems from cyber attacks remain a collaborative, government-wide effort".

However, the DHS release neither disclosed what "efforts" the government may be taking, nor what agencies are conducting those efforts. This release does reference the creation of an entity titled "National Cybersecurity Center to further our progress in addressing cyber threats and increasing cybersecurity efforts".

On May 1, 2008, Sen. Joe Lieberman (D-CT) and Sen. Susan Collins (R-ME) sent a letter to the DHS asking questions about this document and initiative. See, related story in this issue titled "Senators Request Information Regarding Federal Cybersecurity Initiative".

Previous related Presidential directives were disclosed to the public, or made available in unclassified versions. For example, on December 17, 2003, President Bush signed a directive titled "Homeland Security Presidential Directive/Hspd-7". It pertains to "Critical Infrastructure Identification, Prioritization, and Protection". It replaced former President Clinton's directive on this subject, titled "Presidential Decision Directive/NSC-63", and dated May 22, 1998. The Clinton directive is also know as "PDD 63". See, story titled "Bush Signs Critical Infrastructure Protection Directive" in TLJ Daily E-Mail Alert No. 802, December 18, 2003.

Allen also said in his May 6 speech that the "DHS also is prepared to consult with the private sector to assist US corporations to protect their networks."

Al Qa'ida's Use of Internet Communications. Allen also discussed al Qa'ida's use of the internet for communications. He said that "al Qa'ida has made significant and effective use of the internet to promote its unrelenting and violent ideology." He added that it "employs the internet to transmit globally its messages and the numbers of such messages have increased exponentially over the last 18 months."

"Al Qa'ida, moreover, which was on ``its back foot´´ in 2004 to 2007, has regained its equilibrium", said Allen. "Al Qa'ida's leadership has delivered over the past 12 months, an unprecedented number of audio and video messages and has increased its translation capability, diversity of subject matters, and media savvy to reach out to wider audiences globally. Its objective is to gain wide Muslim support, empathy, financing, and future recruits." (Internal quotation marks in original, without citation.)

He continued that "At the top of this sophisticated marketing machine, al Qa'ida leaders have carefully crafted and controlled their words. Al Sahab produces the audio or videotapes; the al-Fajr online media network plays the messages on numerous electronic platforms to include messages that download onto ``I-PODs´´ and similar electronic devices. The Global Islamic Media Front then translates, re-packages, and re-disseminates these messages onto numerous -- sometimes redundant -- websites with the capacity to regenerate any website if a government or private entity attempts to bring it down." (Internal quotation marks in original.)

"To help al Qa'ida target US citizens, several radical websites in the United States have re-packaged al Qa'ida statements with American vernacular and commentary intending to sway U.S. Muslims."

Finally, he said that "Al Qa'ida media themes throughout 2007 were consistent with previous messages of building unity in the Muslim community while instilling a sense of duty to support violence in defense of Islam. This consistent drumbeat of ``Muslim unity´´ could potentially resonate with some Muslims in the homeland who may already be pre-disposed to support extremist causes". (Internal quotation marks in original.)

DC Circuit Receives Briefs in Challenge to FCC CPNI Opt-In Rules

5/6. The Federal Communications Commission (FCC) filed its brief [85 pages in PDF] on April 30 in NCTA v. FCC, a petition for review of the FCC's 2007 CPNI Report and Order.

The National Cable & Telecommunications Association (NCTA) filed its brief [99 pages in PDF] on March 14. The EPIC and others filed an amicus curiae brief [23 pages in PDF] on May 6 in support of the FCC's opt-in rule for disclosing CPNI to joint venture partners and independent contractors.

47 U.S.C. § 222 requires carriers to keep confidential the customer proprietary network information (CPNI) that they possess. The FCC implements this section with rules.

This round of CPNI rulemaking began as a result of the August 30, 2005, petition for rulemaking filed by the Electronic Privacy Information Center's (EPIC) to address the problem of third party data brokers and private investigators who were obtaining CPNI from without authorization of customers.

That is, data brokers, private investigators, and Hewlett Packard lawyers, or their agents, were taking advantage of inadequate security through pretexting practices, such as pretending to be a customer seeking his own records.

The FCC adopted its NPRM on February 10, 2006. See, story titled "FCC Adopts NPRM Regarding Privacy of Consumer Phone Records" in TLJ Daily E-Mail Alert No. 1,308, February 13, 2006. It released the text [34 pages in PDF] on February 14, 2006. The NPRM is FCC 06-10.

FCC adopted the Report and Order under review on March 13, 2007. It released the text [PDF] on April 2, 2007. It is FCC 07-22 in CC Docket No. 96-115 and WC Docket No. 04-36.

The FCC order addresses issues other than pretexting. Pertinent to this proceeding, it modified its rules "to require carriers to obtain opt-in consent from a customer before disclosing a customer’s CPNI to a carrier's joint venture partners or independent contractors for the purposes of marketing communications related services to that customer." (See, order at paragraphs 37-50.)

The NCTA filed a petition for review [PDF] on August 7, 2007. It challenges only the FCC's rules requiring carriers and interconnected voice over internet protocol service providers to obtain opt in customer approval before disclosing CPNI to joint venture partners and independent contractors.

The NCTA wrote in its brief that the first issue is "Whether the FCC's Order violates the First Amendment by restricting protected speech in a manner that does not directly or materially advance a real and substantial governmental interest and is not narrowly tailored to the governmental interests at stake."

It wrote that the second is is "Whether the FCC's Order is arbitrary and capricious under the Administrative Procedure Act ... because it (a) imposes an ``opt-in´´ approval requirement despite the absence of record evidence to support its departure from the prior ``opt-out´´ regime, (b) fails to establish any nexus between the threat of unauthorized CPNI disclosures and the form of customer approval, and (c) neglects to evaluate the significant competitive disadvantages of the selective opt-in requirement for new entrants in the telephone services marketplace."

The FCC argued in its brief that federal consumer privacy protection regulations that impose opt-in requirements on businesses pass constitutional muster, citing the April 13, 2001, opinion of the U.S. Court of Appeals (DCCir) in Trans Union Corp. v. FTC, 245 F.3d 809. See also, story titled "Financial Privacy" in TLJ Daily E-Mail Alert No. 166, April 16, 2001, and story titled "Appeals Court Denies Rehearing for Trans Union" in TLJ Daily E-Mail Alert No. 293, October 24, 2001.

This case is NCTA v. FCC and USA, U.S. Court of Appeals for the District of Columbia Circuit, App. Ct. No. 07-1312, a petition for review of a final order of the FCC.

People and Appointments

5/6. President Bush nominated Troy Paredes to be a member of the Securities and Exchange Commission (SEC) for a term expiring on June 5, 2013. This nomination is for the seat being vacated by Paul Atkins. See, White House release.

5/6. President Bush nominated Cynthia Bauerly to be a member of the Federal Election Commission (FEC) for a term expiring on April 30, 2011. This nomination is for the seat previously held by Danny McDonald. President Bush withdrew his previous nomination of Robert Lenhard for this seat. The FEC, among other things, regulates political speech on the internet. See, White House release.

5/6. President Bush nominated Caroline Hunter to be a member of the Federal Election Commission (FEC) for a term expiring on April 30, 2013. This is for the seat of Michael Toner, who has resigned. See, White House release.

5/6. President Bush nominated Donald McGahn to be a member of the Federal Election Commission (FEC) for a term expiring April 30, 2009. This is for the seat previously held by David Mason. President Bush also withdrew his renomination of Mason. See, White House release.

Go to News from May 1-5, 2008.