TLJ News from May 6-10, 2011

Gordon Smith Discusses Voluntary Spectrum Auctions

5/10. Gordon Smith, head of the National Association of Broadcasters (NAB), gave a speech in Washington DC at the annual meeting of the Advanced Television Systems Committee (ATSC), a standards setting organization for digital television. He discussed the future of technology.

In addition, he discussed proposals for voluntary spectrum auctions. He is concerned that broadcasters might be compelled to give up spectrum involuntarily.

For a summary of pending proposals to authorize the Federal Communications Commission (FCC) to conduct voluntary spectrum auctions, see story titled "Rep. Latta Introduces Incentive Auctions Bill" in TLJ Daily E-Mail Alert No. 2,227, April 27, 2011, and story titled "Rep. Boucher and Rep. Stearns Introduce Voluntary Incentive Auctions Act" in TLJ Daily E-Mail Alert No. 2,114, July 29, 2010.

Gordon SmithSmith (at right) said that "These days, a lot of controversy revolves around the word ``voluntary´´ when it comes to broadcasters giving up spectrum. At the core, we want to protect broadcasters from being forced to give up spectrum involuntarily. And for those that choose not to give up spectrum, we want them held harmless and not disadvantaged by their choice to stay in the business of broadcasting."

"If a station simply can't make it and volunteers to sell its spectrum, that's fine - as long as it doesn't harm another station that wants to stay in business and is excited about the future. The problem is that what is voluntary for the former could become involuntary for the latter", said Smith.

"It concerns us that the FCC could forcibly relocate broadcasters, crowd channels closer together, reduce their coverage, destroy innovation for viewers, increase interference or otherwise degrade their signals." He continued that "what we're saying to the government is keep voluntary, voluntary."

"Broadcasting is continually changing -- from black and white to color, from analog to digital, and now to providing a whole range of new digital services", said Smith. "But change can't happen, and we can't serve our audiences, if we don't have sufficient spectrum. It's the necessary ingredient in the over-the-air part of free, over-the-air television."

"So we'll continue to fight to ensure that broadcasters have the spectrum they need and innovations in broadcast services, like the ones ATSC is spearheading, can flourish in consumer homes well into the future."

FCC Seeks Comments on Economic Impact of LPFM on Commercial FM

5/10. The Federal Communications Commission (FCC) released a Public Notice (PN) [6 pages in PDF] that requests comments regarding the economic impact of low power FM (LPFM) stations on full service commercial FM stations.

Section 8 of the Local Community Radio Act of 2010 (LCRA) requires the FCC to conduct this study. This Act was HR 6533 [LOC | WW] in the 111th Congress. It is now Public Law No. 111-371.

The Act merely states that the FCC must conduct an "economic study on the impact that low-power FM stations will have on full-service commercial FM stations" and submit a report to the House Commerce Committee and the Senate Commerce Committee (SCC) within one year. President Obama signed it on January 4, 2011.

See, stories titled "Congress Passes Low Power FM Bill", "Summary of HR 6533, the Local Community Radio Act of 2010" and "History of LPFM Law and Policy Making" in TLJ Daily E-Mail Alert No. 2,183, December 19, 2010.

The FCC's just released PN asks specific questions. For example, it asks for "evidence that LPFM stations have had, or are likely to have after the LCRA’s implementation, a direct or indirect impact on the audience ratings of full-service commercial FM stations", and asks, "what extent do they compete for listeners with full-service commercial stations?"

The PN also asks about LPFM stations' impact on the advertising revenues of full service commercial FM stations.

The PN also announces that the FCC will not address in this study and report "potential interference issues".

The deadline to submit initial comments is June 24, 2011. The deadline to submit reply comments is July 25, 2011. This is a permit but disclose proceeding. The FCC released this PN on May 10, 2011. It is DA 11-756 in MB Docket No. 11-83. See also, notice in the Federal Register, Vol. 76, No. 97, Thursday, May 19, 2011, at Pages 28983-28986.

Rep. Conyers Introduces Bill to Extend Provisions of Surveillance Law

5/10. Rep. John Conyers (D-MI) introduced HR 1805 [LOC | WW | PDF], the "USA PATRIOT Act Sunset Extension Act of 2011".

This bill is taken from S 193 [LOC | WW], the "USA PATRIOT Act Sunset Extension Act of 2011", which the Senate Judiciary Committee (SJC) approved on March 10, 2011. HR 1805 deletes S 193's references to the death penalty.

S 193 and HR 1805 would extend the sunsets on several provisions of surveillance law, and address standards, accountability, and oversight, for the purpose of limiting government abuse of surveillance authority.

HR 1805 would extend the sunsets on Section 215 FISA business records, Section 206 roving wiretap, and lone wolf authority to December 31, 2013.

In contrast, HR 1800 [LOC | WW | PDF], the short bill introduced on May 6, 2011, by Rep. James Sensenbrenner (R-WI) would provide six year extensions for Section 215 and roving wiretap authority, and permanently extend lone wolf authority.

HR 1805 would also create a sunset for national security letter (NSL) authority -- December 31, 2013. It would also revise the NSL process.

The Department of Justice's (DOJ) Office of the Inspector General (OIG) has written reports that document the FBI's abuse of NSL authority.

On March 9, 2007, the DOJ's OIG released a report [30 MB in PDF] titled "A Review of the Federal Bureau of Investigation's Use of National Security Letters". See also, story titled "DOJ IG Releases Reports on Use of NSLs and Section 215 Authority" in TLJ Daily E-Mail Alert No. 1,551, March 13, 2007. That report covered the use of NSLs in 2003 through 2005.

On March 13, 2008, the OIG released a report [187 pages in PDF] titled "A Review of the FBI's Use of National Security Letters: Assessment of Corrective Actions and Examination of NSL Usage in 2006". See also, story titled "DOJ Inspector General Releases Second Report on FBI Misuse of National Security Letters" in TLJ Daily E-Mail Alert No. 1,730, March 12, 2008.

See also, story titled "House Subcommittee Holds Hearing on NSL Authority" in TLJ Daily E-Mail Alert No. 2,214, April 1, 2011.

Rep. Conyers stated in a release that "I have introduced a bill that has already been reported out by the Senate Judiciary, a bill that has bipartisan support and the backing of the intelligence community."

Attorney General Eric Holder has many times expressed his support for S 193, and its predecessor bill in the 111th Congress, S 1692 [LOC | WW], the "USA PATRIOT ACT Sunshine Extension Act". For example, he stated at the May 4, 2011, hearing of the SJC that it "critical that that bill become law as quickly as possible".

Rep. Conyers added that "In sixteen days, three provisions of the Foreign Intelligence Surveillance Act are set to expire ... It is clear that many members of both parties still have serious concerns about the PATRIOT Act, including these three provisions.  But instead of discussing these concerns, the majority has introduced legislation that would make the Lone Wolf authority permanent and extend the business records and roving wiretaps for six years.  Their bill would make no improvements to the PATRIOT Act.  It includes no new protections for privacy.  It requires no reporting to Congress.  I do not support this approach."

The Library of Congress web site states that HR 1805 bill has no original cosponsors. However, Rep. Conyers' release states that the bill is co-sponsored by Rep. Dutch Ruppersberger (D-MD), the ranking Democrat on the House Intelligence Committee (HIC).

HR 1805 was referred to the House Judiciary Committee (HJC).

Chen Confirmed for Northern District of California

5/10. The Senate confirmed Edward Milton Chen to be a Judge of the U.S. District Court for the Northern District of California by a vote of 56-42. See, Roll Call No. 68. This District Court hears a disproportionately large amount of technology related cases. However, opposition to Chen was not based upon technology related matters.

Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), stated that Chen "has been a well-respected Federal Magistrate Judge".

Sen. Leahy also praised the Senate for returning to the "longstanding tradition of deference to home state Senators with regard to Federal District Court nominations". Chen was confirmed on a nearly straight party line vote. However, Republicans did not filibuster his nomination, which would have required 60 votes to stop.

Sen. Charles Grassley (R-IA), the ranking Republican on the SJC, said that "Judge Chen is not a consensus nominee.  His nomination was considered during the last Congress, and was voted out of committee on a party line vote. The nomination was returned to the President on more than one occasion. Despite our repeated and consistent opposition, the nomination was resubmitted this year. Again, it was reported out on a 10-8 party line vote."

He said that "Chen appears ready and willing to adopt and apply the so-called empathy standard. He appears to be a member of the camp that believes that being completely impartial is just an old-fashioned view of judging."

He also noted that "Judge Chen worked as a staff attorney for the American Civil Liberties Union (ACLU) for over 15 years. As an advocate for the ACLU, he took very liberal positions on a variety issues."

Sen. Grassley also stated that "The President has failed to send to the Senate a nomination for 50 percent of the current judicial vacancies. This statistic certainly does not indicate a sense of urgency on the part of the White House."

US and PRC Conclude SED Meeting

5/10. Representatives of the governments of the United States and the People's Republic of China (PRC) concluded two days of meetings in Washington DC titled "U.S.-China Strategic and Economic Dialogue" (SED). Both countries made numerous statements and commitments. Among other things, the PRC made commitments on intellectual property piracy and indigenous innovation policies.

The US and PRC stated in a joint release that they "re-affirmed their commitment to take further steps to liberalize global trade and investment, and to oppose all forms of trade and investment protectionism".

The joint release states that "China will take stock of the results of the Special Campaign against IPR Infringement and Fake and Shoddy Products (Special Campaign), and improve on the high-level, long-term mechanism of IPR protection and enforcement, building on the Special Campaign currently in place." (Parentheses in original.)

Also, "China will strengthen the government inspection mechanism so as to make sure that the software being used by the government agencies at all levels is legitimate. China and the United States will strengthen cooperation in the JCCT IPR Working Group on software legalization."

The joint release states that the US "commits to give full consideration to China's request that it be treated fairly as the United States reforms its export control system. The United States will continue discussions, including technical discussions, on the export control status of designated parts, components, and other items of interest."

For more on US reform of its export control system, see story titled "Obama Addresses Export Control Reform Process" in TLJ Daily E-Mail Alert No. 2,185, December 21, 2010.

Also, "Both sides agree to work through the U.S.-China High Technology Working Group (HTWG) to actively implement the Action Plan for U.S.-China High Technology Trade in Key Sectors Cooperation, hold U.S.-China fora on high-tech trade on a regular basis, and discuss high-tech and strategic trade cooperation through the HTWG."

The joint release also addresses indigenous innovation. "China will eliminate all of its government procurement indigenous innovation products catalogues in implementing the consensus achieved during President Hu's January 2011 visit to not link innovation policies to the provision of government procurement preferences."

For more on indigenous innovation, see for example, stories titled "Locke Addresses PRC and Trade" in TLJ Daily e-Mail Alert No. 2,040, February 2, 2010, "WTO's 3rd Trade Policy Review Addresses IPR in the PRC" in TLJ Daily E-Mail Alert No. 2,090, June 2, 2010, and "EC Trade Commissioner Addresses Indigenous Innovation and IPR in the PRC" in TLJ Daily E-Mail Alert No. 2,122, August 10, 2010.

The joint release continues that "China will revise Article 9 of the Draft Regulations Implementing the Government Procurement Law to eliminate the requirement to link indigenous innovation products to the provision of government procurement preferences. The United States and China are cooperating intensively in the High- and Experts-Level Innovation Dialogue to ensure that their innovation policies are consistent with the 2010 S&ED principles of non-discrimination; support for market competition and open international trade and investment; strong enforcement of intellectual property rights; and, consistent with World Trade Organization (WTO) rules, leaving the terms and conditions of technology transfer, production processes and other proprietary information to agreement between individual enterprises. Both sides are committed to continuing the High- and Expert-Level meetings and to implementing the outcomes of those meetings."

Robert Holleyman, head of the Business Software Alliance (BSA), stated in a release that "The fact that software piracy was on the table in this week's talks between the United States and China underscores the impact it has on the US economy. It is encouraging that China has committed to strengthen its inspections of government agencies to ensure they are using legal software: it acknowledges that the results of China's software legalization efforts to date have been inadequate."

But, he added that "it is also important to note that China has made a series of commitments like these in recent negotiations, and the software industry has not yet seen results that it can measure in increased sales and exports. For that reason, the US should continue insisting that China take credible steps to lower its piracy rate."

Holleyman also said that "I am encouraged by China's new commitments to limit the impact of its discriminatory procurement policies. These policies, under the umbrella of indigenous innovation, have made it nearly impossible for many BSA members to sell to the Chinese central or provincial governments. We look forward to seeing real change in the marketplace."

The joint statement also addresses many other issues. For example, it covers currency and monetary policy tools in the US and PRC. It addresses financial regulation. It also states that "China will continue to take steps to expand domestic consumption and imports".

It also states that "The United States and China express their continued support for the government and people of Japan as they begin to rebuild from the tragic earthquake and tsunami, and affirmed their confidence in the health of Japan’s economy."

Obama Addresses Immigration of Technologically Talented People

5/10. President Obama gave a speech in El Paso, Texas, in which he discussed immigration issues, including those involving students and other persons with technology related talents.

He said that immigration reform will "help to make America more competitive in the global economy. Today, we provide students from around the world with visas to get engineering and computer science degrees at our top universities. But then our laws discourage them from using those skills to start a business or a new industry here in the United States."

Obama said that "Instead of training entrepreneurs to stay here, we train them to create jobs for our competition. That makes no sense. In a global marketplace, we need all the talent we can attract, all the talent we can get to stay here to start businesses -- not just to benefit those individuals, but because their contribution will benefit all Americans."

"Look at Intel, look at Google, look at Yahoo, look at eBay. All those great American companies, all the jobs they’ve created, everything that has helped us take leadership in the high-tech industry, every one of those was founded by, guess who, an immigrant."

So, Obama said that "we don't want the next Intel or the next Google to be created in China or India. We want those companies and jobs to take root here."

Also, Vice President Joe Biden stated in a speech in Washington DC on May 9 about US relations with the People's Republic of China that "Over the last three decades, our people have become increasingly linked through education, through work and through travel. Last year, 130,000 Chinese were studying in the United States. They're really good. We’re going to try to keep some of them."

Copyright Office to Hold Hearing on Phasing Out Statutory Licensing Requirements

5/10. The Copyright Office (CO) published a notice in the Federal Register announcing that it will hold a public hearing on June 10 in its inquiry into possible mechanisms, methods, and recommendations for phasing out the statutory licensing requirements set forth in 17 U.S.C. § 111, § 119, and § 122.

The CO is required to undertake this proceeding by Section 302 of S 3333 [LOC | WW], the "Satellite Television Extension and Localism Act", which was enacted in 2010. It is now Public Law No. 111-175. See, story titled "Obama Signs Satellite TV Bill" in TLJ Daily E-Mail Alert No. 2,089, May 28, 2010.

Section 302 instructs the CO to write a report to Congress within 18 months that contains:

The hearing will be on Friday, June 10, 2011. The deadline to submit notices of intent to testify at the hearing is 5:00 PM on Friday, May 27, 2011. The deadline to submit written testimony is 12:00 NOON on Wednesday, June 8, 2011. The hearing will be in the Copyright Hearing Room, Room LM-408, Madison Building, 101 Independence Ave., SE. See, Federal Register, Vol. 76, No. 90, May 10, 2011, at Pages 27091-27092.

FRB Governor Wants Bankers to Be Innovative Like Apple

5/10. Federal Reserve Board Governor Elizabeth Duke gave a speech in St. Louis, Missouri, in which she discussed creativity and innovation.

She stated that "An individual acting alone to solve a problem can be creative, while innovation is the process of adding value by applying a new idea or method to something that is already established. For example, Henry Ford did not contribute the creative energy to invent an automobile. Rather, Ford's innovation was the idea to combine the 100-year-old technology for the automobile with the meat packing industry's assembly line process, resulting in a means to mass produce cars."

She continued that "Apple did not invent the MP3 player with the introduction of the iPod. Rather, the company used existing technology and a collaboration with the music industry to develop iTunes software, bringing an affordable application of the MP3 to the public. In each of these examples, improving upon a good idea was as important, if not more important, than the initial idea."

However, she was not speaking to people who might bring innovation to any tech sector. Rather, she encouraged people involved in the community development finance industry to be innovative.

Free Press Urges Rejection of AT&T T-Mobile Merger

5/10. The Free Press (FP) sent a letter (15 pages in PDF) to the Senate Judiciary Committee's (SJC) Subcommittee on Antitrust, Competition Policy and Consumer Rights, which will hold a hearing on the proposed merger of AT&T and T-Mobile on Wednesday, May 10, 2011. The FP argues that the merger should be rejected.

The Senate does not have the power to approve or reject mergers.

The PK letter argues that the "relevant product market is the nationwide post-paid smartphone cellular service market", that the merger "would result in the re-formation of a tight duopoly in wireless service", and that the merger would harm consumers and competition.

No representative of the FP will testify at the SJC hearing.

However, the Public Knowledge's (PK) Gigi Sohn will testify. She wrote in her prepared testimony [24 pages in PDF] that "The merger of AT&T and T-Mobile threatens to undo what Congress so wisely initiated in 1993 and return the United States to a duopoly market marked by higher prices and less innovation. If this merger is consummated, two vertically integrated companies will control nearly 80 percent of the wireless market, and leave Sprint, with just 16 percent of the market, considerably weakened."

Sohn added that "This is a market that is already considered heavily concentrated based on the" Department of Justice's (DOJ) 2010 Horizontal Merger Guidelines and the current Herfindahl Hirschman Index (HHI) measurements.

Phoenix Paper Examines Relationship of Wireless Mergers and Employment Growth

5/10. The Phoenix Center for Advanced Legal & Economic Public Policy Studies released a paper [8 pages in PDF] titled "Wireless Mergers and Employment: A Look at the Evidence". The authors are George Ford and Lawrence Spiwak.

This paper examines "the merger-employment relationship by looking at employment trends in the wireless sector, and their relationship to the largest wireless merger to date -- the AT&T-Cingular merger in 2004".

It concludes that "the evidence does not support a simplistic argument that wireless sector employment is diminished by wireless carrier mergers. If anything, the data suggest that mergers may have a beneficial impact on employment."

It elaborates that "in the years prior to the AT&T-Cingular merger, wireless sector employment was declining at an annual rate of about 2.4%. After the merger, however, sectoral job growth rebounded, turning positive (4.6%) and exceeding the growth rate of economy-wide employment."

Copps Addresses BIAS Regulation, USF/IC Reform, Muni Broadband, and News Media

5/10. Federal Communications Commission (FCC) Commissioner Michael Copps gave a speech [6 pages in PDF] in Asheville, North Carolina.

Copps railed against "the first eight years of my tenure", when George Bush was President, Republicans were the majority on the Commission, and the Commission classified broadband internet access services (BIAS) as information services. He said that then, the FCC pursued "policies designed to benefit big, incumbent interests rather than consumers". And now, the lack of competition among BIAS providers "poses a real threat to freedom of speech and the future of our democracy".

He also said that the universal service and intercarrier compensation system are "byzantine and broken". He said that the Commission will vote on these items "this summer", so "Anyone interested in being part of the solution needs to get to their bottom line, to their final proposals, now."

He also discussed municipal broadband. He said that "When incumbent providers cannot serve the broadband needs of some localities, local governments should be allowed -- no, encouraged -- to step up to the plate and ensure that their citizens are not left on the wrong side of the great divide. So it is regrettable that some states are considering, and even passing, legislation that could hinder local solutions to bring the benefits of broadband to their communities."

He also offered a lean and hungry look at the state of news media. He said that there has been an "undisciplined era of rampant private sector speculation and consolidation that shrank news production and the process was aided and abetted by successive Federal Communications Commissions that encouraged it all, blessed it all, and walked willingly away from its public interest responsibilities."

"Unless we fix the problems facing traditional news outlets, today's problems in journalism will only continue, and probably get worse, in the broadband world of tomorrow." But, Copps did not say how he would "fix the problems".

More News

5/10. Microsoft and Skype announced in a release that "they have entered into a definitive agreement under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. The agreement has been approved by the boards of directors of both Microsoft and Skype."

Sen. Rockefeller Introduces Bill to Regulate Online Services Providers' Use of Personal Information

5/9. Sen. John Rockefeller (D-WV), the Chairman of the Senate Commerce Committee (SCC), introduced S 913 [LOC | WW | PDF], the "Do-Not-Track Online Act of 2011". However, this title is not a description of its contents.

The title of this bill includes the word "track". Introductory clauses and section titles also use the word "track". Sen. Rockefeller's summary of the bill states that it enables individuals not to have the online activities "tracked". However, the substantive language of this 13 page bill does not reference either "track" or "tracking". Instead, this bill would authorize the Federal Trade Commission (FTC) to write and enforce rules pertaining to the "collection and use of personal information on an individual" by "providers of online services". As introduced, it would create a regulatory regime for providers of online services. Online tracking would be just one regulated activity.

The bill does not define either "online services" or "providers of online services". Nor does it define "personal information", or any other term. The bill would transfer broad authority to the FTC to construct the new regulatory regime.

Sen. John RockefellerSen. Rockefeller (at right) stated in a release that "Recent reports of privacy invasions have made it imperative that we do more to put consumers in the driver's seat when it comes to their personal information".

He added that "I believe consumers have a right to decide whether their information can be collected and used online. This bill offers a simple, straightforward way for people to stop companies from tracking their movements online."

This bill would require the FTC to write rules "that establish standards for the implementation of a mechanism by which an individual can simply and easily indicate whether the individual prefers to have personal information collected by providers of online services, including by providers of mobile applications and services", and that prohibits "such providers from collecting personal information on individuals who have expressed" such a preference.

The bill would provide an exception for the "collection and use of personal information on an individual ... to the extent ... necessary to provide a service requested by the individual, including with respect to such service, basic functionality and effectiveness, so long as such information is anonymized or deleted upon the provision of such service"

It would also provide an exception for the collection and use of personal information to the extent that "the individual ... receives clear, conspicuous, and accurate notice on the collection and use of such information; and ... affirmatively consents to such collection and use".

Not only does this bill not define "personal information", it does not state that the personal information which an individual can instruct providers of online services not to collect or use is information that the individual transmitted in online activity, such as web sites visited, or other information collection in the nature of online tracking. This bill does not even state that the information at issue be collected online by provider of online services.

HR 654 [LOC | WW], the "Do Not Track Me Online Act", introduced by Rep. Jackie Speier (D-CA) and others on February 11, 2011, is an example of a bill that is actually drafted to enable internet users to prevent the collection and use of online tracking data. Sen. Rockefeller's bill does not resemble HR 654.

Rep. Speier's bill contains language that is also found in the state of California's SB 761, introduced by state Sen. Alan Lowenthal (D).

As of May 9, 2011, HR 654 had 14 cosponsors. All are Democrats. Half represent California districts.

What Sen. Rockefeller has actually introduced is a bill that would create a very broad and undefined regulatory regime for the collection and use by online service providers of personal information.

This bill would give the FTC authority to write such rules under the Administrative Procedure Act (APA) process, rather than the Magnusson Moss Act process that applies to FTC rulemakings. The APA process would enable the FTC to act with less transparency and procedural fairness for affected entities.

The bill would also give the FTC civil enforcement authority. It would also give the states enforcement authority.

The ACLU's Laura Murphy stated in a release that this bill "will be a key step forward toward bringing Americans' privacy rights up to date. While we spend more and more of our lives online, our ability to control the collection, sharing and use of the information we share is severely lacking. A 'do not track' list will give Americans the chance to both opt out of opportunistic marketing tactics and keep their personal information out of the hands of the government. The Senate should make this important bill a priority to ensure that Americans have the control they deserve over their online information."

US PRC Strategic Economic Dialogue Addresses Intellectual Property

5/9. Representatives of the governments of the United States and the People's Republic of China are meeting on May 9 and 10 under the rubric of the U.S.-China Strategic and Economic Dialogue (SED).

The White House news office released a statement regarding a May 9 SED meeting attended by President Obama. It makes no reference to intellectual property. Vice President Joe Biden gave a speech on May 9 in which he touched on intellectual property, free trade, and human rights, among other issues.

The May 9 release, states, in full, that "The President and the U.S. delegation met today in the Oval Office with China’s Special Representatives to the U.S.-China Strategic and Economic Dialogue, Vice Premier Wang Qishan and State Councilor Dai Bingguo. They exchanged views on a broad range of economic, security and other issues of importance to both countries. Both sides reaffirmed their commitment to building a cooperative partnership that is comprehensive in scope, cooperative in nature, and yields positive achievements that benefit our people. They agreed that concrete actions by both sides are needed to build such a partnership. The President encouraged China to implement policies that support sustained and balanced global growth as well as a more balanced bilateral economic relationship. They also discussed ways to advance our common nonproliferation objectives, including working together to prevent Iran from acquiring nuclear weapons and to persuade North Korea to abandon its nuclear weapons program, to meet its international commitments and to avoid destabilizing behavior. The President underscored his preference for a diplomatic solution to both challenges. The President raised U.S. concerns about the current human rights situation in China, and underscored his support for the universal rights of freedom of expression and worship, and of access to information and political participation."

Vice President Biden stated in his May 9 speech that "Last year our trade with China supported over 500,000 jobs here in the United States, and we made tangible progress during President Hu's visit, especially in the areas of innovation, intellectual property, and exports, all of which we're following up on. Over the next two days, we need to build on this momentum and to make sure our commitments are aggressively implemented so we can continue to move."

Biden also said that "We seek to cooperate to advance our mutual interests in not only promoting economic growth that is strong, sustainable and balanced, but trade that is free and is fair."

He also said that "We have vigorous disagreement in the area of human rights. We’ve noted our concerns about the recent crackdown in China, including attacks, arrests and the disappearance of journalists, lawyers, bloggers and artists. And again, no relationship that’s real can be built on a false foundation. Where we disagree, it’s important to state it."

He also mentioned students. "Over the last three decades, our people have become increasingly linked through education, through work and through travel. Last year, 130,000 Chinese were studying in the United States. They’re really good. We’re going to try to keep some of them."

Robert Holleyman, head of the Business Software Alliance (BSA), stated in a release on May 9 that "Four out of five software programs installed on personal computers in China continue to be pirated ... This represents commercial theft of nearly $8 billion a year. China’s commitments to curb piracy have simply failed to produce results. BSA members, including many of the largest software producers in the world, have seen no significant increase in sales to China. The Obama administration’s trade and economic team should continue pressing China to reduce software piracy in a way that produces real results."

Holleyman added that "US businesses in all industries compete daily with otherwise legal companies in China that are stealing the software that drives their manufacturing or helps run their business. The unfair competitive advantage that results is harming businesses in every sector of the US economy."

He concluded that "China has committed to ensuring that all of its government agencies use only legally purchased software, and it has announced pilot projects to promote that practice in state-owned enterprises, but we are not seeing tangible results."

Senate Rejects Cloture on Nomination of James Cole to be Deputy Attorney General

5/9. The Senate rejected a cloture motion on the nomination of James Cole to be the Deputy Attorney General (DAG), by a vote 50-40. See, Roll Call No. 67. Cole is, however, the temporary DAG, due to a recess appointment in December.

A cloture vote, which ends a filibuster, requires a three fifths majority to prevail under Senate Rule XXII. See, Congressional Research Service report titled "Invoking Cloture in the Senate", dated February 25, 2011.

James ColeThis defeat for Cole (at right) resulted in part from the DOJ's non-cooperation with Senate Republicans on oversight matters. Republicans Senators did not state whether they will also filibuster other DOJ nominees for the same reason, such as Virginia Seitz, to be head of the Office of Legal Counsel, and Lisa Monaco, to be head of the National Security Division.

Democrats need to both maintain cohesion, and attract some Republican votes, to end a filibuster. Sen. Richard Lugar (R-IN) was the only Republican to vote for the motion. Seven Republicans did not cast votes.

Sen. Harry Reid (D-NV), the Senate Majority Leader, voted no. However, by voting no he preserved his procedural option of bringing a motion for reconsideration.

Sen. Charles Grassley (R-IA), the ranking Republican on the Senate Judiciary Committee (SJC), stated during Senate debate that "In addition to my concerns regarding Mr. Cole's qualifications, I am troubled by President Obama's recess appointment of Mr. Cole to this position. I have been consistent in my opposition to recess appointments over the years. Whenever the President bypasses the Senate by making recess appointments, such nominees will not receive my support. We have a process in place for nominations and if the President isn't willing to work with Senators to clear nominations, the nominee shouldn't get a second bite at the apple."

Sen. Grassley is also concerned with Cole's refusal to provide Sen. Grassley with documents to facilitate its oversight of the Department of Justice (DOJ), and to provide Sen. Saxby Chambliss (R-GA), the ranking Republican on the Senate Intelligence Committee (SIC), with other DOJ oversight materials. Sen. Grassley stated that "These documents are part of a legitimate exercise of our constitutional duty to conduct oversight."

Actually, the enumeration of the powers of the Congress in Article I, Section 8, of the Constitution does not list "oversight". However, Senators and Representatives often act as though there were an oversight clause in the Constitution.

Sen. Grassley urged Senators to "send a message to the Justice Department to stop the stonewalling of legitimate oversight inquiries from members of the United States Senate".

Sen. Grassley and Sen. Jeff Sessions (R-AL) both also expressed concern about Cole's commitment to the war on terror. Sen. Ben Cardin (D-MD) defended Cole's approach to fighting terrorists.

More People and Appointments

Virginia Seitz5/9. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved by voice vote the nomination of Virginia Seitz (at right) to be Assistant Attorney General in charge of the Department of Justice's (DOJ) Office of Legal Counsel. See, SJC release. See also, story titled "Obama Picks Seitz for OLC" in TLJ Daily E-Mail Alert No. 2,194, January 6, 2011.

5/9. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved by voice vote the nomination of Lisa Monaco to be Assistant Attorney General (AAG) in charge of the Department of Justice's (DOJ) National Security Division. See, SJC release. See also, story titled "Obama Nominates Lisa Monaco to Be Head of DOJ's National Security Division" in TLJ Daily E-Mail Alert No. 2,205, March 21, 2011.

5/9. The Senate Judiciary Committee (SJC) held an executive business meeting at which it approved the nomination of Bernice Donald to be a Judge of the U.S. Court of Appeals (6thCir) by voice vote. See, SJC release.

More News

5/9. Janet Napolitano, the Secretary of Homeland Security, gave a speech to graduating students at Emory University in Atlanta, Georgia. She said, "we also need you in government" for, among other things, "ensuring a safe and secure cyberspace".

5/9. Sen. John Rockefeller (D-WV) and Sen. Kay Hutchison (R-TX) introduced S 911 [LOC | WW], the "Strengthening Public-safety and Enhancing Communications Through Reform, Utilization, and Modernization Act", or the "SPECTRUM Act".

Intelligence Authorization Bills Seek to Counter WikiLeaks

5/7. The House is scheduled to begin consideration of HR 754 [LOC | WW], the "Intelligence Authorization Act for Fiscal Year 2011" on Thursday, May 12, 2011. This is a bill to authorize appropriations for sixteen federal agencies involved in intelligence related activities.

It contains few substantive provisions. Moreover, the actual authorizations are not listed in this bill, but rather are in an annex, which is kept secret.

However, this bill would create a new program intended to detect transfers of information to entities such as WikiLeaks. The Senate version of the bill contains the same provision. See, S 719 [LOC | WW], also titled "Intelligence Authorization Act for Fiscal Year 2011".

In addition, the Senate version of the bill would also create a new administrative process to be used against government employees who transfer classified information. It would provide the government a procedure that is simpler, and less burdened by due process requirements, than criminal prosecutions.

In short, the intelligence committees are proposing to deal with the WikiLeaks phenomenon by increasing the security and surveillance of government computer networks, and by cracking down on government employees who leak information.

Nothing in these bills would create any new governmental authority to prosecute individuals associated with entities like WikiLeaks, or reporters employed by entities like the New York Times.

House Bill. The bill as reported by the House Intelligence Committee (HIC) would create an "automated insider threat detection program for the information resources in each element of the intelligence community in order to detect unauthorized access to, or use or transmission of, classified intelligence". See, Section 402.

The bill would define "information resources" as "networks, systems, workstations, servers, routers, applications, databases, websites, online collaboration environments", and any thing else designated by the Director of National Intelligence (DNI).

The HIC's May 3, 2011, report explains that "Incidents like the unauthorized disclosure of classified information by Wikileaks also show us that despite the tremendous progress made since 9/11 in information sharing, we still need to have systems in place that can detect unauthorized activities by those who would do our country harm from the inside." See, House Report No. 112-72.

The minority views section of the report states that "we must make cybersecurity a priority", but complains that "the majority embarked on a whirlwind process to get" this bill out of committee.

The bill would require that this new program have "initial operating capability" by October 1, 2012, and "full operating capability" by October 1, 2013.

Rep. Mike Rogers (R-MI), the Chairman of the HIC, introduced this bill on February 17, 2011. The HIC amended and approved it on March 10, 2011. The HIC approved an amendment in the nature of a substitute that added the "automated insider threat detection program" provision. The HIC held no public hearing on this provision. The March 10 markup was partially closed.

Senate Bill. The related bill in the Senate is S 719. Sen. Diane Feinstein (D-CA) introduced it on April 4, 2011. The Senate Intelligence Committee (SIC) approved it the same day. It contains the same "automated insider threat detection program" provision as the House bill.

In addition, the Senate bill, but not the House bill, contains a provision that would create a new administrative criminal procedure (nominally "disciplinary actions") for government employees. See, Section 403.

This provision would require the DNI to write regulations that would apply to "each employee of an element of the intelligence community". These regulations would require that such employees sign non-disclosure agreements (NDAs).

These regulations would require that these NDAs impose "prepublication review requirements" on such employees. These regulations would require that these NDAs impose requirements upon such employees regarding "disclosing classified information without authorization at any time during or subsequent to employment". And, these regulations would require that these NDAs impose penalties, including loss of pension benefits.

The SIC report explains that "The Committee has had long-standing concerns about unauthorized disclosures of classified information. A particular source of frustration has been that leakers are rarely seen to suffer consequences for leaking classified information. In order to better supplement criminal prosecution remedies for unlawful disclosures, the Committee has urged the Executive Branch to make fuller use of administrative sanctions. Up to now, those sanctions have consisted of security clearance revocation, suspension, or termination as a means of deterring and punishing leakers." See, Senate Report No. 112-12.

It continues, "Unfortunately, these sanctions are not generally available for use against a key source of leaks, former Intelligence Community employees. The purpose of Section 403 is to provide an additional administrative option for the Intelligence Community to deter leakers who violate the prepublication review requirements of their non-disclosure agreements."

Sen. Ron Wyden (D-OR), Sen. Mark Udall (D-CO), and Sen. Kent Conrad (D-ND) voted against S 719 in committee.

Sen. Wyden wrote in his dissenting view for the SIC report that "my concern is that giving intelligence agency heads the authority to take away the pensions of individuals who haven't been formally convicted of any wrongdoing could pose serious problems for the due process rights of intelligence professionals, and particularly the rights of whistleblowers who report waste, fraud and abuse to Congress or Inspectors General."

He concluded that "this provision could be used to undermine or violate the due process rights of intelligence agency employees, with a corresponding impact on their family members and dependents."

The full Senate has not yet approved either HR 754 or S 719.

Commentary: Information Sharing and National Security Leaks

5/7. Section 403 of S 719 [LOC | WW], the "Intelligence Authorization Act for Fiscal Year 2011", would create a new administrative punishment process for unauthorized disclosure of classified information by employees at government agencies involved in intelligence.

This provision would build on a strategy long used by companies to protect trade secrets and proprietary information -- the non-disclosure agreement (NDA). These intelligence agency NDAs, like private sector NDAs, would be contractual, and enforceable beyond the termination of employment.

Section 403 would also create what amounts to a criminal punishment process in a nominally administrative proceeding. It would create a process that circumvents a panoply of due process protections that apply to criminal proceedings.

Companies must turn to the courts for enforcement of their NDAs. This provision of S 719 would give intelligence agencies internal enforcement authority. Companies can seek damages and injunctive relief. This provision would enable government agencies to punish.

S 719 is designed to place government employees in fear of losing their jobs and pensions if they disclose what turns out to be classified information.

The sharing of information with other federal government agencies, state and local government agencies, regulated industries, private companies, trade groups, and others, is essential to the efficient and effective operation of government, particularly with respect to communications networks and computer systems, where almost all of the facilities are in private hands.

Arguably, S 719 would have a chilling effect upon information sharing by government officials, both that which would harm national security, and that which would advance government policy goals.

No Defenses, Limitations or Exceptions. S 719 would enable intelligence related agencies to punish employees for transferring classified information without authorization.

Knowledge that the information was classified would not be an element of the offense. Rather, failure to comply with "prepublication review requirements" -- that is, to ask for permission to disclose a document -- would be the relevant element of the offense.

Moreover, S 719 contains no other defenses, limitations or exceptions. The bill would not be limited to transfer of classified information that posses a threat to intelligence operations or national security.

Nor does the bill recognize as defenses either (1) improper classification, (2) that the document in question was already in the public domain, or (3) that the  public good of release outweighed the threat to national security.

Nor does the bill create any protection for whistleblowers who go through proper channels to report waste, fraud and abuse at government agencies.

Espionage Act, Criminal Prosecution and Due Process. There already exists an Espionage Act, which is codified at 18 U.S.C. § 798. It is a criminal prohibition. And, to the extent that it does not contemplate the internet or computer systems, it is outdated.

It provides, in part, that "Whoever knowingly and willfully communicates, furnishes, transmits, or otherwise makes available to an unauthorized person, or publishes, or uses in any manner prejudicial to the safety or interest of the United States or for the benefit of any foreign government to the detriment of the United States any classified information ... concerning" certain enumerated codes, designs, and intelligence activities "Shall be fined under this title or imprisoned not more than ten years, or both".

Last December, late in the 111th Congress, former Sen. John Ensign (R-NV), Sen. Joe Lieberman (D-CT), and Sen. Scott Brown (R-MA) introduced S 4004 [LOC | WW], the "Securing Human Intelligence and Enforcing Lawful Dissemination Act" or "SHIELD Act". On February 10, 2012, they reintroduced this bill as S 315 [LOC | WW], while Rep. Peter King (R-NY) introduced HR 703 [LOC | WW] on February 15, 2011, in the House.

These bills would, among other things, revise the statute to enable prosecutors to reach persons like Julian Assange and WikiLeaks. See also, story titled "Senators Introduce Bill to Amend Espionage Act to Reach WikiLeaks and Others" and related stories in TLJ Daily E-Mail Alert No. 2,174, December 10, 2010.

S 719, like the SHIELD Act, attempts to limit leaks to the likes of Assange, but it does not take the approach of amending the Espionage Act. Rather, it would create what amounts to a criminal prohibition, backed up by punishment, but outside of the judicial system, and lacking the procedural protections afforded in criminal judicial proceedings.

Also, by slipping this provision into an an intelligence authorization bill, the jurisdiction and expertise of the Judiciary Committees is being circumvented.

This bill, and the SIC report, go to great lengths to try to posture this new proceeding as administrative rather than criminal. The bill would not amend the Espionage Act, or any other section of Title 18. Nominally, it would not even put a prohibition or punishment in a federal statute or regulation. Rather, it would assume the posture that the prohibition and punishment are in an employment contract, and that the government would merely be carrying out the terms of a contract voluntarily executed by employees.

Also, the argument underlying Section 403 is that the bill provides for no deprivation of life, liberty or property, which would entail due process. It does not provide for the taking of life or liberty. One could not be executed or imprisoned under this bill. However, the position that there is no deprivation of property is a stretch. The key punishment of this bill is deprivation of a government employee's pension, which for many government employees is one of their most valuable assets.

Section 403 is at bottom, a proposal to take an existing criminal prohibition from the Espionage Act, as it applies to certain government employees, and place it an administrative agency proceeding, and enforce it in a manner that evades the due process and public transparency requirements afforded by the Constitution.

Finally, when assessing the commitment of the intelligence agencies to Constitutional rights, one might observe that they did not ask that Section 403 to be included in the bill. As Sen. Wyden noted in his dissent, "neither the DNI nor any of the intelligence agency heads have asked Congress for this authority".

Overclassification. The federal government broadly classifies a huge amount of records, often without rational basis, and often in a manner that does not put individuals on notice as to what is classified.

Witnesses at a House Judiciary Committee (HJC) last December quoted from various officials and reports, and offered their own assessments. The December 16, 2011, hearing hearing was titled "Espionage Act and the Legal and Constitutional Issues Raised by WikiLeaks". See also, HJC web page with hyperlinks to prepared testimony of other witnesses.

Gabriel Schoenfeld (Hudson Institute) stated that "our national security system is saddled with pervasive mis- and overclassification". See, prepared testimony.

Abbe Lowell (McDermott Will) testified that "Too often, government officials during their day's work find it easier to classify information or classify it at a higher level than necessary because it requires more effort and consideration to do less. No one gets in trouble for classifying something that should be unclassified". See, prepared testimony.

Thomas Blanton (George Washington University, National Security Archive) stated that there is "massive overclassification" and "excessive government secrecy". He added that there are "documents that are classified and unclassified at the same time, sometimes with different versions from different agencies or different reviewers, all because the secrecy is so subjective and overdone". See, prepared testimony.

Nothing in this bill would prevent the government from punishing an employee for sharing classified information that should not have been classified in the first place.

CWA Advocates Approval of AT&T T-Mobile Deal

5/6. The Communications Workers of America (CWA) released a paper [9 pages in PDF] titled "Sprint or AT&T? The Real Story Behind the Proposed AT&T/T-Mobile Merger".

The CWA is a sometimes militant and combatant union. The CWA expresses its concerns in this paper that Sprint, the only other company that might have acquired T-Mobile USA, has a history of opposing unionization efforts. However, the bulk of this paper argues more broadly that acquisition by AT&T would be better for consumers and for broadband buildout.

This paper states that "The alternative to the AT&T merger was not a standalone T-Mobile but a merger with Sprint. Thus, a comprehensive assessment of the impact of the AT&T/T-Mobile merger should include a comparison with the only real alternative that was being considered seriously: a Sprint/T-Mobile merger." The paper argues that "consumers, workers, and communities will be better served by a T-Mobile merger with AT&T than one with Sprint."

It states that T-Mobile was losing customers, had poor revenue growth, low margins, was "poorly positioned in the race to create the next generation high-speed wireless network", and its owner, Deutsche Telekom (DT), was "not willing to commit additional capital resources to fund the buildout of a fast 4G network."

Moreover, "A Sprint/T-Mobile merger would have faced major financial and technological obstacles, creating significant risks for consumers, workers and communities."

There exists a counter argument, that technology companies' need to be innovative, quick to adapt, and flexible, is undermined by collective bargaining agreements with entities like the CWA. These agreements, and arbitrators' rulings, set work conditions, and limit companies' ability to ramp up and ramp down operations, thereby making unionized tech companies less competitive.

Under this view point, the tech sector, and consumers of tech products and services, would be better off with a merged entity that is less restricted by union entanglements.

See for example, the speeches of Gary Shapiro, head of the Consumer Electronics Association (CEA), such as his address to the Media Institute in Washington DC, on February 17, 2009. See also, story titled "CEA Chief Criticizes Spending Bill, Protectionism, Unionization Mandates, and Anti-Immigration Policy" in TLJ Daily E-Mail Alert No. 1,901, February 17, 2011.

House Judiciary Committee to Mark Up Surveillance Sunsets Bill

5/6. Rep. James Sensenbrenner (R-WI), Rep. Lamar Smith (R-TX), Rep. Mike Rogers (R-MI), and Rep. Dan Lungren (R-CA) introduced HR 1800 [LOC | WW | PDF], the "FISA Sunsets Reauthorization Act of 2011".

This short bill would extend the sunsets of three provisions of surveillance law -- related to Section 215 authority, roving wiretaps, and lone wolf terrorists. For more on the surveillance provisions at issue, and the history of extension of their sunset dates, see story titled "House and Senate Extend Expiring Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,054, March 3, 2010.

This bill would extend the Section 215 and roving wiretaps sunsets to December 31, 2017. It would permanently extend lone wolf authority.

The House Judiciary Committee (HJC) will meet to mark up this bill at 10:00 AM on Thursday, May 12, 2011. See, HJC notice. The HJC's Subcommittee on Crime, Terrorism and Homeland Security  will first hold a hearing titled "The USA PATRIOT Act: Dispelling the Myths" at 10:00 AM on Wednesday, May 11.

These three provisions are set to expire on May 27, 2011. See, story titled "Obama Signs Three Month Extension of Surveillance Provisions" in TLJ Daily E-Mail Alert No. 2,198, February 25, 2011.

PK and NAF Want FCC to Investigate Anticompetitive Caps on Broadband Usage

5/6. The Public Knowledge (PK) and New America Foundation (NAF) sent a letter to the Federal Communications Commission (FCC) asking it to "investigate" "Caps on broadband usage imposed by Internet Service Providers". The letter suggests that these could have anticompetitive purposes.

The two Washington DC based interest groups are particularly interested in an FCC investigation of AT&T's policies regarding usage caps and pricing for exceeding these caps.

However, while the letter suggests interrogatories for the FCC to send to service providers, it stops short of advocating any new price, service, or other regulation. It merely raises the specter of anticompetitive conduct, and asks the FCC to collect evidence that the PK and NAF would site in future comments and complaints.

The letter, signed by the PK's Harold Feld and the NAF's Sacha Meinrath, acknowledges that "broadband caps are not inherently problematic". But, "they carry the omnipresent temptation to act in anticompetitive and monopolistic ways".

The letter explains that caps on "those services, such as voice telephony and video programming, that compete with internet-delivered non-ISP controlled offerings" could be anticompetitive.

That is, the argument may be that if a broadband internet access service (BIAS) provider were to charge its customers extra for exceeding a monthly usage cap as a result of use of a VOIP service that competes with the BIAS provider's voice service, and use of the BIAS provider's service does not count towards the cap, then that cap policy might be anticompetitive behavior directed at competing voice service providers.

And, a similar allegation of anti-competitive behavior might be made regarding video services that compete with the BIAS provider's video services.

The FCC articulated such a concern in its 2008 Comcast order. It concluded that BitTorrent, with whom's peer to peer service Comcast interfered, is "a competitive threat to cable operators such as Comcast because Internet users have the opportunity to view high-quality video with BitTorrent that they might otherwise watch (and pay for) on cable television. Such video distribution poses a particular competitive threat to Comcast's video-on-demand (``VOD´´) service." (See, paragraph 5, at page 3. Parentheses in original.)

The FCC order also stated that Comcast's network management practices pose "significant risks of anticompetitive abuse". (Paragraph 47, at page 28.)

The FCC adopted this order [67 pages in PDF] on August 1, 2008. It released that order on August 20, 2008. That order is FCC 08-183 in WC Docket No. 07-52. See also, story titled "FCC Asserts Authority to Regulate Network Management Practices" in TLJ Daily E-Mail Alert No. 1,805, Monday, August 4, 2008.

But then, on April 6, 2010, the U.S. Court of Appeals (DCCir) issued its opinion [36 pages in PDF] in Comcast v. FCC, vacating the August 2008 order. See, story titled "Court of Appeals Vacates FCC's Comcast Order" in TLJ Daily E-Mail Alert No. 2,072, April 7, 2010.

The PK/NAF letter adds that "If used properly, data caps can" be "a tool in easing network congestion. However, there is a constant threat that ISPs use network congestion as a pretext to act on other motives."

It also states that "the caps recently implemented by AT&T are particularly aggressive. Unlike competitors whose caps appear to be at least nominally linked to congestions during peak-use periods, AT&T seeks to convert caps into a profit center by charging additional fees to customers who exceed the cap".

Commentary: Internet Censorship as Protectionism

5/6. Sen. Dick Durbin (D-IL) announced in a letter to Baidu on May 4, 2011 that as a result of US companies' actions in support of foreign governments' censorship of the internet, he is preparing a bill that "would require technology companies to take reasonable steps to protect human rights or face liability".

Also, on April 6, 2011, Rep. Chris Smith (R-NJ), Rep. Frank Wolf (R-VA), and Rep. Thaddeus McCotter (R-MI) introduced HR 1389 [LOC | WW], the "Global Online Freedom Act of 2011", a bill would establish statutory prohibitions for US companies.

Both HR 1389 and Sen. Durbin's proposal are built on the premise that internet censorship is a moral wrong, and that it violates human rights such as free expression.

However, there also exists the argument that some nations that engage in internet censorship, and particularly the People's Republic of China (PRC), also have trade protectionism as a motive. That is, it is non-PRC service providers who are predominantly harmed or excluded from the PRC market by PRC censorship, and domestic PRC service providers who are protected from this competition. Hence, there exists the argument that the US should also view internet censorship as a trade issue, and deal with it accordingly.

This argument has been articulated by Gil Kaplan (an attorney at King & Spalding), Ed Black (head of the Computer and Communications Industry Association), Nate Anderson (Ars Technica), and others.

For example, Kaplan, who previously held trade related positions at the Department of Commerce (DOC), wrote an opinion piece published in the Huffington Post on March 16, 2010, titled "If China Throws Out Google, We Should Throw Out their Computers".

Kaplan wrote that "not only is Google being forced out by a series of actions and deliberate inactions of the Chinese government, but Google's affiliate, YouTube, was never even let into China in the first place. It is perennially blocked by their ``great firewall´´. Nor do most other U. S. websites have unfettered access to China. eBay has left China. Many newspaper websites are regularly censored. The Chinese competitive sites that are willing to go along with the censorship and the dictates of the Chinese government, like Baidu and Alibaba, are the dominant players on the Chinese internet."

Hence, Kaplan argued that "This is not only a question of freedom of speech. It is also a trade barrier".

Similarly, the CCIA's Black wrote in January of 2010 that "It is increasingly apparent that censorship is a barrier to trade, and that China cannot limit the free flow of information and still comply with its international trade obligations".

He wrote in his March 24, 2010, testimony [PDF] for the Congressional Executive Commission on China titled "Google, the Internet and China: A Nexus Between Human Rights and Trade?" that "Internet censorship is a human rights issue and a trade issue".

Black elaborated that the US "is an information economy, and U.S. companies are leading vendors of information products and services. In this context, information discrimination by other countries fundamentally undermines U.S. economic interests, including the interests of U.S. companies seeking to access foreign markets, including those engaged in electronic commerce. Filtering American content and services has the effect of filtering American competition, and combating it should top our trade agenda."

He continued that "When a foreign government stifles online freedom or otherwise restricts the Internet, it creates a hostile market environment by preventing its consumers from fully using new products, applications and services offered by or through U.S. tech companies."

He added that the "the unreasonable demands the Chinese government has continuously placed on U.S. companies -- from censorship coercion to Green Dam to Indigenous Innovation -- all seem to have the added objective of clearing the competitive deck of foreign companies".

See, story titled "OUSTR and Department of Commerce Write PRC Regarding Green Dam Mandate" in TLJ Daily E-Mail Alert No. 1,962, June 29, 2009.

See also, Ed Black March 2, 2010, written statement for the Senate Judiciary Committee (SJC) in which he wrote that "we may not get very far lecturing the Chinese government about human rights, but treating Internet censorship as a trade barrier is a multilateral approach worth pursuing".

He added that "the Chinese government’s actions seem to constitute violations of its WTO-GATT obligations, as well as specifically scheduled commitments in relation to GATS and China’s WTO Accession Protocol. The WTO is a viable forum because it represents a global rules-based trade system that China, as the world’s largest exporter and the world’s most export-driven economy, must appear to respect."

On May 2, 2011, the Office of the U.S. Trade Representative (OUSTR) released it report [53 pages in PDF] titled "2011 Special 301 Report". The Special 301 process, which was created by the Trade Act of 1974, requires the OUSTR to identify countries that fail to protect the intellectual property rights (IPR) and market access of US companies that rely on IPR.

In this report, the OUSTR did not identify internet censorship in the PRC as a market access issue for US IP based companies. However, the report goes into great detail on internet based infringing activities in the PRC. See also, story titled "OUSTR Releases Special 301 Report" in TLJ Daily E-Mail Alert No. 2,231, May 3, 2011.

Also, on December 23, 2010, the OUSTR released its report [124 pages in PDF] titled "2010 Report to Congress On China's WTO Compliance". It does not identify internet censorship of search companies such as Google as a form of trade protectionism.

However, it does identify one narrow censorship related issue. It states that the PRC fails to provide copyright protection for US copyrighted works that have not obtained approval from the PRC's censorship authorities.

Rep. Markey and Rep. Barton Release Draft of Do Not Track Kids Act

5/6. Rep. Ed Markey (D-MA) and Rep. Joe Barton (R-TX) released a discussion draft [32 pages in PDF] of a bill to be titled the "Do Not Track Kids Act of 2011".

This bill would amend the Children's Online Privacy Protection Act of 1998 (COPPA), which is codified at 15 U.S.C. §§ 6501-6506. The COPPA bans operators of web sites and online services that are directed to children from collecting information from children under thirteen without parental consent.

The COPPA was S 2326 in the 105th Congress. S 2326 was enacted into law as part of a large omnibus appropriations bill in October of 1998. See, TLJ story titled "Internet and Tech Bills Become Law", October 22, 1998. See also, TLJ web page titled "Children's Online Privacy Protection Act" (1998).

Rep. Markey's and Rep. Barton's bill would revise and expand the underlying regulatory regime of the COPPA regarding collection of information from children. It would also ban the tracking of children for marketing purposes and other child related activities.

First, the bill provides that "It is unlawful for an operator of a website, online service, online application, or mobile application directed to children or minors, or an operator having actual knowledge that it is collecting personal information from children or minors, to use, disclose to third parties, or compile personal information collected from children or minors, if the use, disclosure, or compilation is for targeted marketing purposes."

Second, the bill would require operators to adopt and publish a "Digital Marketing Bill of Rights for Teens" that includes seven "Fair Information Practices Principles", which principles are enumerated and defined by the bill.

Third, the bill would regulate operators' collection of "geolocation information" from kids.

Fourth, the bill would require operators' to create "erasure buttons" for certain online content. The bill would require operators "to implement mechanisms that permit users of the website, service, or application of the operator to erase or otherwise eliminate content that is publicly available through the website, service, or application and contains or displays personal information of children or minors".

The bill also directs the FTC to write implementing rules, pursuant to Administrative Procedure Act (APA) procedure, for each of these new requirements. The bill would give civil enforcement authority to the FTC, and to states. However, it does not expressly create a private right of action.

Rep. Ed MarkeyRep. Markey (at right) stated in a release that "For millions of kids today, the Internet is their new 21st century playground" and "kids growing up in this online environment also need protection from the dangers that can lurk in cyberspace".

He added that the purpose of this bill is to ensure that "kids do not have their online behavior tracked or their personal information collected or used without permission".

Rep. Barton stated in a release that "it is imperative to ensure that consumers' personal and private information remains personal and private. I understand that gathering some information from consumers is necessary when conducting business online, however it is never acceptable to abuse that information. The Do Not Track Kids Act of 2011 is a bill that makes protecting our children a priority, and I believe that this is a great first step in consumer privacy".

Sen. Rockefeller Announces Forthcoming Do Not Track and Cyber Security Bills

5/6. Sen. John Rockefeller (D-WV), the Chairman of the Senate Commerce Committee (SCC), announced that he will introduce a bill titled the "Do-Not-Track Online Act of 2011" sometime during the week of May 9, 2011.

He issued a release that states that this bill would "Create a universal legal obligation for all online companies to honor consumer choice when consumers do not want anyone to collect information about their online activities", and give enforcement authority to the Federal Trade Commission (FTC).

This release also states that the SCC "is also working on comprehensive legislation to increase cybersecurity".

More News

5/6. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) released its draft SP 800-90 A[135 pages in PDF] titled "Recommendation for Random Number Generation Using Deterministic Random Bit Generators. The deadline to submit comments is August 1, 2011.

5/6. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) released its draft SP 800-57 Part 1 Revision 3 [143 pages in PDF] titled "Recommendation for Key Management: Part 1: General". The deadline to submit comments is July 1, 2011.

Go to News from May 1-5, 2011.