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| TLJ News from March 1-5,
2013 |
Sen. Wyden Introduces Bill to Amend DMCA to
Create an Exemption for Unlocking
3/5. Sen. Ron Wyden (D-OR)
introduced S 467
[LOC |
WW], the
"Wireless Device Independence Act of 2013", a bill to amend the DMCA to
allow certain unlocking of wireless phones and other wireless devices.
This bill was referred to the
Senate Judiciary Committee (SJC). Sen. Wyden is not a member.
First, to understand how Sen. Wyden's operates, it is necessary to understand
the structure of Section 1201. Subsection 1201(a)(1)(A) contains the basic ban:
"No person shall circumvent a technological measure that effectively controls
access to a work protected under this title." Then, (a)(1)(B), which Sen. Wyden's
bill would amend, provides that the basic ban "shall not apply to persons who
are users of a copyrighted work which is in a particular class of works"
designated by the Librarian of Congress every three years pursuant to a process set
out in (a)(1)(C). These classes of works are now commonly referred to as DMCA
exemptions. Subsections
(d), (e), (f) and (g) contains permanent "exemptions" to the basic ban.
Subsection (b) provides that "No person shall manufacture, import, offer to
the public, provide, or otherwise traffic in any technology, product, service, device,
component, or part thereof, that ... is primarily designed or produced for the purpose
of circumventing ..."
Sen. Wyden's bill takes an exemption from the Librarian's 4th triennial rules, and
incorporates it into (a)(1)(B). Since this exemption is by statute, and is permanent,
it might have more logically fit the structure of the Section 1201 to put it in as a
subsection (h). The placement in (a)(1)(B) also limits its reach to the person who
circumvents. It arguably does not reach the makers of things that are used to circumvent.
This bill would amend 17
U.S.C.§ 1201(a) to exempt the following from Section 1201's ban on circumvention
of "a technological measure that effectively controls access to a work protected
under" Title 17:
"a user of a computer program, in the form of firmware or software, that
enables a wireless telephone handset, or other wireless device that can connect to
the Internet, originally acquired from the operator of a wireless telecommunications
network or retailer to connect to a different wireless telecommunications network if
-- (I) the user legally owns a copy of the computer program; (II) the use of the
computer program by the user is solely for the purpose of connecting to such wireless
telecommunications network; and (III) the access to such wireless telecommunications
network is authorized by the operator of the network"
This exemption is very similar to the language used by the Librarian of
Congress in its 5th triennial rules containing exemptions to the ban on
circumvention. That exemption expired in January of this year.
The recently expired exemption was this:
"Computer programs, in the form of firmware or software, that enable
a wireless telephone handset originally acquired from the operator of a wireless
telecommunications network or retailer ... if the operator of the wireless
communications network to which the handset is locked has failed to unlock it within
a reasonable period of time following a request by the owner of the wireless
telephone handset, and when circumvention is initiated by the owner, an
individual consumer, who is also the owner of the copy of the computer program
in such wireless telephone handset, solely in order to connect to a different
wireless telecommunications network, and such access to the network is
authorized by the operator of the network."
This bill is broad to the extend that it would allow consumers to unlock a
wide range of devices, and that it contains no requirement that the term of a
contract with the wireless service provider have reached its end. A consumer
could sign a service contract, obtain a subsidized and locked phone, and then
unlock, and switch service providers, without violating the DMCA. Of course, the
original service provider might still attempt to collect money from the customer
due under the contract.
This bill pertains to "a user of a computer program", while the
expired rule pertained to the "Computer programs". The DMCA directs the
Librarian of Congress to adopt regulations that exempt classes of copyrighted works.
The bill exempts the person who unlocks his or her phone (under certain circumstances).
What then of the manufacturer, importer or retailer of the things that
consumers use to unlock their phones? Could they still be at risk of violating
the DMCA, and being sued by service providers, device makers, or others under
the DMCA's Section 1203 private right of action?
This would arguably be the most literal interpretation of the bill as
introduced.
The clause "access to the network is authorized by the operator of the
network" would exclude from the exemption unlocking when, hypothetically, the
purpose is to access an open network.
This bill would be effective retroactively to January 23, 2013. This is the
date that the Librarian's 5th triennial rules took effect.
Google Discloses that it Receives FBI
NSLs
3/5. Google released a
statement regarding its receipt of, and compliance with, National Security
Letters (NSLs) from the Federal Bureau of
Investigation (FBI).
It is significant merely that Google is publicly addressing this subject. Most
companies do not. Also, over many years many representatives of internet and
communications companies have refused to discuss this subject with TLJ.
However, Google's letter discloses little. For example, it states that for
the year 2012, Google received somewhere between 0 and 999 NSLs that pertained
to somewhere between 1,000 and 1,999 "Users/Accounts". For the year
2011, the numbers fell within the same ranges.
Google wrote that is used these ranges "to address concerns raised by the
FBI, Justice Department and other agencies that releasing exact numbers might
reveal information about investigations".
An NSL, which is just one of many surveillance tools available to the FBI,
enables the FBI to demand from phone companies, and anything that the FBI considers
to be an "electronic communication service", records regarding its
customers or users, such as their names, addresses, and billing information. The
FBI does not need any kind of court approval. It issues the NSL itself. However,
the FBI cannot use an NSL to listen to a phone conversation.
Also, Google wrote in its statement that it requires "that government
agencies use a search warrant if they're seeking search query information or
private content, like Gmail and documents, stored in a Google Account".
Google also stated that "people don't always use our services for good, and
it's important that law enforcement be able to investigate illegal activity.
This may involve requests for personal information. When we receive these
requests, we ... scrutinize them carefully to ensure they satisfy the law and
our policies" and "seek to narrow requests that are overly
broad".
More on NSLs. NSL authority is codified at
18 U.S.C. § 2709.
NSLs do not require a warrant or other prior court authorization, and hence, are
inherently subject to abuse, and have in fact have been widely abused. They enable the
Department of Justice's (DOJ) FBI to obtain records, including subscriber, billing
and call records of phone companies and ISPs. NSLs also apply to libraries to the
extent that they are providing an electronic communication service (ECS).
ECS is defined at 18
U.S.C. § 2510. ECS is a term created by the 1986 Electronic Communications
Privacy Act (ECPA), based upon technology as it existed prior to the enactment
of the ECPA. The application of this and other 1986 terms to current technologies
is no longer clear, and in the hands of FBI lawyers, is quite elastic and
expansive. However, one thing is clear. Google is treated as an ECS for the
purposes of Section 2709.
Section 2709 provides that "A wire or electronic communication service
provider shall comply with a request for subscriber information and toll billing
records information, or electronic communication transactional records in its
custody or possession" that is made by the FBI Director or certain other
officials at the DOJ or FBI.
NSLs require no warrant or judicial approval of any kind. They can be issued
by the FBI Director "or his designee in a position not
lower than Deputy Assistant Director at Bureau headquarters or a Special Agent
in Charge in a Bureau field office designated by the Director".
The NSL can demand production of any "name,
address, length of service, and local and long distance toll billing records of
a person or entity".
The closest thing to a standard or limitation in this section is that the
person who issues the NSL must certify in writing that the information sought
is "relevant to an authorized investigation to protect against international
terrorism or clandestine intelligence activities".
The FBI is also authorized by this section to issue a gag order that prohibits
the recipient from disclosing that it has received an NSL. This section provides
that "no wire or electronic communications service provider, or officer,
employee, or agent thereof, shall disclose to any person (other than those to whom
such disclosure is necessary to comply with the request or an attorney to obtain
legal advice or legal assistance with respect to the request) that the Federal
Bureau of Investigation has sought or obtained access to information or records
under this section." (Parentheses in original.)
The DOJ and FBI have a history of violation of Section 2709. The DOJ's
Office of the Inspector General (OIG)
released three lengthy reports in 2007, 2008 and 2010 that disclosed long running,
egregious and patently obvious disregard by the FBI for surveillance laws,
including Section 2709.
The General Counsel at the time of the violations covered by these reports
was Valerie Caproni. She is now Deputy General Counsel at
Northrop Grumman Corporation.
President Obama nominated her to be a Judge of the
U.S. District Court (SDNY) on November
14, 2012, and re-nominated her on January 3, 2013. Her nomination is pending.
For more on NSLs, FBI violation of its NSL authority, and Caproni, see
story
titled "Obama Nominates Caproni to District Court" in
TLJ Daily E-Mail
Alert No. 2,474, November 19, 2012.
The DOJ/OIG surveillance abuse reports are as follows:
- January 20, 2010 redacted
report [306 pages
in PDF] titled "A Review of the Federal Bureau of Investigation's Use of
Exigent Letters and Other Informal Requests for Telephone Records"
- March 13, 2008,
report [PDF]
titled "A Review of the FBI's Use of National Security Letters: Assessment of
Corrective Actions and Examination of NSL Usage in 2006"
- March 9, 2007,
report [PDF] titled "A Review of the Federal Bureau of Investigation's Use
of National Security Letters"
Obama Administration Urges Creation of DMCA
Anti-Circumvention Exemption for Unlocking Cell Phones
3/4. David Edelman, Senior Advisor for Internet, Innovation, & Privacy
in the Executive Office of the President (EOP), wrote a
short policy statement titled "It's Time to Legalize Cell Phone
Unlocking".
He wrote that it is the position of the "White House" that
"consumers should be able to unlock their cell phones without risking criminal
or other penalties". Also, "the same principle should also apply to
tablets".
Unlocking is the circumvention of computer programs on mobile phones or
tablets to enable such devices to connect to alternative wireless networks.
Carriers sell consumer phones at discounted prices, in return for the consumers
signing wireless service contracts with a minimum fixed term. Carriers use
locking to prevent these consumers from switching service providers.
Edelman asserted that this as a "telecommunications issue", and wrote
that "the Federal Communications Commission (FCC), with its responsibility for
promoting mobile competition and innovation, has an important role to play
here."
In fact, this is a Title 17 matter involving copyright and Digital Millennium
Copyright Act (DMCA), over which the Library of Congress's (LOC)
Copyright Office (CO) has rulemaking
authority. The LOC released a
statement that
suggests that it will not reopen this matter.
FCC Chairman Julius Genachowski, like FCC Chairmen and other Commissioners
before him, has often adopted rules and taken adjudicatory action without
statutory authority. Moreover, while the President has no authority to direct or
fire the Register of Copyright, Genachowski has often acted as if he were a
loyal member of the Obama administration.
Genachowski wrote in a
statement on March 4 that "From a communications policy perspective,"
the CO's decision "raises serious competition and innovation concerns, and for
wireless consumers, it doesn't pass the common sense test. The FCC is examining
this issue, looking into whether the agency, wireless providers, or others
should take action to preserve consumers' ability to unlock their mobile
phones."
It might be recalled also that the FCC under the leadership of former
Chairman Michael Powell ventured into copyright policy with the adoption of
broadcast flag rules in 2003. However, the Court of Appeals held that it lacked
statutory authority. See,
story
titled "DC Circuit Reverses FCC's Broadcast Flag Rules" in
TLJ Daily E-Mail
Alert No. 1,131, May 9, 2005.
Edelman also wrote that "The Obama Administration would support a range of
approaches to addressing this issue, including narrow legislative fixes in the
telecommunications space that make it clear: neither criminal law nor
technological locks should prevent consumers from switching carriers when they
are no longer bound by a service agreement or other obligation."
Edelman's statement refers to an
online petition titled "Make Unlocking Cell Phones Legal" in an
Obama administration web site. That petition states, "We ask that the White
House ask the Librarian of Congress to rescind this decision, and failing that,
champion a bill that makes unlocking permanently legal."
There is no law that prohibits cell phone or tablet unlocking. However, there
are contracts between service providers and consumers, which the President is
powerless to abrogate.
Second, there is the anti-circumvention provisions of the Digital Millennium
Copyright Act (DMCA). The DMCA directs the LOC to conduct a proceeding every
three years to adopt rules that create exemptions to the ban on circumvention.
Nominally the rules are adopted by the Librarian of Congress, but in fact the
Register of Copyright and her staff attorneys write these rules. These triennial
rules are codified at 37 C.F.R. § 201.40.
Unlocking of wireless devices may violate the anti-circumvention provisions
of the DMCA. Only the CO can create an exemption for this.
The CO's fourth triennial rules contain exemptions related to unlocking. See,
story titled "Copyright Office Releases 4th Triennial DMCA Exemptions" in
TLJ Daily E-Mail
Alert No. 2,115, July 30, 2010.
The CO's fifth set of rules, now in effect, do contain an exemption for
unlocking phones, but only through the end of January of 2013. See, story titled
"Librarian of Congress Adopts 5th Triennial § 1201 Exemptions" in
TLJ Daily E-Mail
Alert No. 2,467, October 24, 2012.
The purpose of the exclusive rights of copyright is to incent creation, by
protecting the creator's or assignee's ability to derive revenue from the sale,
licensing or streaming or copyrighted works. The object of the DMCA is to
further this purpose by banning circumvention of technological measures that
effectively control access to copyrighted works.
The process of unlocking entails circumventing a technological measure that
controls access to copyrighted software. But, that software is not being sold or
licensed. Rather, it is part of the process of enforcing a business model that
ties a phone to a wireless service contract. That is, the DMCA is
being invoked by service providers in a manner not envisioned by the members of
the Congress that enacted the DMCA back in 1998.
Text of the CO Exemptions. The 4th set of rules which are not longer
in effect contained two exemptions that relate to the app store business models,
and wireless service provider business models:
"Computer programs that enable
wireless telephone handsets to execute software applications, where
circumvention is accomplished for the sole purpose of enabling interoperability
of such applications, when they have been lawfully obtained, with computer
programs on the telephone handset."
"Computer programs, in the form of firmware or software, that enable
used wireless telephone handsets to connect to a wireless telecommunications
network, when circumvention is initiated by the owner of the copy of the
computer program solely in order to connect to a wireless telecommunications
network and access to the network is authorized by the operator of the network."
The 5th set of rules which are now in effect include these two exemptions:
"Computer programs that enable wireless telephone handsets
to execute lawfully obtained software applications, where circumvention is
accomplished for the sole purpose of enabling interoperability of such
applications with computer programs on the telephone handset."
"Computer programs, in the form of firmware or software,
that enable a wireless telephone handset originally acquired from the operator
of a wireless telecommunications network or retailer no later than ninety days
after the effective date of this exemption to connect to a different wireless
telecommunications network, if the operator of the wireless communications
network to which the handset is locked has failed to unlock it within a
reasonable period of time following a request by the owner of the wireless
telephone handset, and when circumvention is initiated by the owner, an
individual consumer, who is also the owner of the copy of the computer program
in such wireless telephone handset, solely in order to connect to a different
wireless telecommunications network, and such access to the network is
authorized by the operator of the network."
That is, the exemption first created in the 4th set of rules applies only to
mobile phones acquired prior to the effective date of the exemption or within 90
days thereafter. The effective date was October 28, 2012. 90 days thereafter
fell in late January. Hence, there is now no phone unlocking exemption.
More Reaction. The Library of Congress, of which the Copyright Office
is a component, released a polite but unbending
statement regarding
the Obama administration statement. It noted that the DMCA "does not permit the
U.S. Copyright Office to create permanent exemptions to the law".
It also explained that the CO conducted a thorough rule making proceeding.
Most significantly, the statement makes no reference to re-examining its
decision.
On the other hand, the CO will likely commence its 6th triennial rulemaking
proceeding in less than two years.
The CTIA stated in a release that "The
Librarian of Congress concluded that an exemption was not necessary because the
largest nationwide carriers have liberal, publicly available unlocking policies,
and because unlocked phones are freely available in the marketplace -- many at
low prices."
It added that "Customers have numerous options when purchasing mobile
devices. They may choose to purchase devices at full price with no lock, or at a
substantially discounted price -- typically hundreds of dollars less than the
full price -- by signing a contract with a carrier. When the contract terms are
satisfied, or for a reason that is included in the carrier's unlocking policy --
such as a trip outside the U.S. -- carriers will unlock a phone at their
customer's request."
Sherwin Siy of the Public Knowledge
(PK) wrote in a
short piece on March 5 that "the White House statement doesn't reverse the
Library's decision".
He added that "The problem here is one created by statute, and thus it falls
to Congress to repair the damage. The Library of Congress's statement certainly
doesn't suggest that it's likely to start some new process of reversing itself".
More on the DMCA. The anti-circumvention provisions are codified at
17 U.S.C. § 1201,
et seq. Subsection 1201(a)(1)(A) provides that "No person shall circumvent a
technological measure that effectively controls access to a work protected under
this title ...".
Then, § 1201(a)(2)(A) provides that "No person shall manufacture, import,
offer to the public, provide, or otherwise traffic in any technology, product,
service, device, component, or part thereof, that --- (A) is primarily designed
or produced for the purpose of circumventing a technological measure that
effectively controls access to a work protected under this title;"
Furthermore, § 1201(b)(1)(A) provides that "No person shall manufacture,
import, offer to the public, provide, or otherwise traffic in any technology,
product, service, device, component, or part thereof, that --- (A) is primarily
designed or produced for the purpose of circumventing protection afforded by a
technological measure that effectively protects a right of a copyright owner
under this title in a work or a portion thereof; ..."
Then, Subsections 1201(a)(1)(B) through (E) provide for rulemaking proceedings
conducted by the Copyright Office (CO) every three years to establish exemptions
to the prohibition of (a)(1)(A) for certain non-infringing uses.
Cato Urges Free Trade in Online
Education
3/4. The Cato Institute released a
paper titled "Liberalizing Cross-Border Trade in Higher Education: The
Coming Revolution of Online Universities". The author is the Cato's Simon
Lester.
The paper states that higher education is moving online, that this increases
international competition between universities, that this is international
trade, and that US universities will seek protectionist policies, but that the
government should reject such demands.
The Cato Institute has a long history of free trade advocacy.
Lester wrote that "Recent developments in higher education, with leading
institutions starting to offer courses online, suggest that the Internet is going
to disrupt this industry, just as it has already disrupted the music and book
industries and many others. We are entering a period of experimentation with new
business models for higher education, with MOOCs (massive open online courses)
the most prominent among these." (Parentheses in original.)
He predicted that "there is likely to be more competition, lower costs,
and higher quality. This is great news for consumers of higher education. However,
some existing institutions may fare badly in this transition and are likely to
call for government support."
He added that "demands for government protection will be even stronger
where foreign online competition is hurting traditional domestic institutions."
He urged that "One way to promote free trade in higher education is with
international trade agreements.
Through these agreements, governments can make commitments not to discriminate
against foreign online higher education programs."
He elaborated that current General Agreement on Trade in Services (GATS) rules are
old and inadequate for addressing online services. Hence, these rules must be updated to
specifically address online higher education.
He offers numerous recommendations. "Treat foreign and domestic online
programs alike in accreditation" and "Online degrees should be recognized all
over the world".
He also argues that "Subsidies should be for students, not for domestic
educational institutions." That is, a government may subsidize education for its
lower income students, but "these subsidies should not be used to
discriminate against foreign online universities".
He argues that state universities should no longer favor students who are
state residents, but "for political reasons, this may be a difficult change to
make".
There are also other political reasons for not adopting the GATS rules
changes that Lester recommends. For example, this paper focuses on governments,
universities and students. However, in addition, faculty have interests, and
tend to be organized and politically active. Much of government spending on higher
education pays for faculty salaries and benefits. Some spending might be viewed
merely as transfer payments from taxpayers to faculty. The sort of international
competition envisioned by Lester would threaten the financial interests of many
US based faculty.
Also, this paper does not address the related issue of US based state run and
non-profit universities seeking government assistance in limiting competition from US
based for profit universities, which increasingly are offering online services.
Judicial Appointments
3/4. The confirmed Katherine Failla to be a Judge of the
U.S. District Court (SDNY). See,
Congressional Record, March 4, 2013, at Page S1094. President Obama first
nominated her on June 25, 2012. See, White House news office
release and
release. He nominated her again on January 3, 2013. She has been an
Assistant U.S. Attorney
since 2000. Before that, she worked for the law
firm of This report contains rhetorical support for other countries buying more
things from the U.S., and other countries removing their barriers to free trade.
However, the Obama administration has not negotiated any
bilateral free trade agreements (FTAs) that would facilitate expanded exports
and imports. Nor has it sought the trade promotion authority (TPA) that would
facilitate obtaining Congressional approval of FTAs.
However, this report states that "we will also work with Congress on Trade
Promotion Authority".
This document also states that "the Administration will continue to advance
negotiations for the Trans-Pacific Partnership (TPP)" and intends "to
launch negotiations with the EU on a comprehensive Transatlantic Trade and Investment
Partnership (TTIP)".
He added that "According to the World Trade Organization (WTO), an estimated
400 free trade agreements (FTA) were implemented around the world by the end of 2010,
more than half of which were negotiated since 2002. Yet the United States has only 14
agreements with 20 countries in force -- with two more under negotiation. Our
stagnant economy needs the boost that trade can provide."
It states that "will closely monitor implementation of China’s bilateral and
WTO commitments to respect and protect U.S. intellectual property, and will work
with China to improve intellectual property protection and enforcement".
In particularly, "we will seek prompt implementation of China’s 2012
commitments on intellectual property, including the commitments regarding the
use of legal software by Chinese enterprises, as well as audits of software on
computers used by the Chinese government. We will also closely monitor
implementation of China’s February 2012 agreement, which followed the United
States' win in a WTO dispute, to increase market access significantly for U.S.
movies being imported and shown in China’s theaters."
In TPP negotiations, the US seeks "state-of-the-art,
high-standard provisions that will protect and promote the spread of
IP-intensive products and services throughout the entire region".
It adds that the "We will continue to seek constructive input
from Congress and stakeholders on a wide range of trade issues related to the
protection and enforcement of copyrights, trademarks, patents, trade secrets,
and other forms of intellectual property. Such input helped to shape a 2012 U.S.
proposal that would, for the first time in any U.S. trade agreement, obligate
TPP Parties to seek to achieve an appropriate balance in their copyright systems
in providing copyright exceptions and limitations for purposes such as criticism,
comment, news reporting, teaching, scholarship, and research."
It also states that the US "will continue consultations with Japan on its
interest in the TPP, focusing on Japan’s readiness to meet the TPP’s high
standards and address U.S. concerns in key sectors such as automotive and
insurance. At the same time, the United States will engage with Japan through
bilateral mechanisms to reduce regulatory and other barriers to U.S. exports and
to enhance two-way trade." See also, story titled "Japan May Join TPPA
Negotiations" in TLJ Daily E-Mail Alert No. 2,527, February 25, 2013.
It also addresses the OUSTR's Special 301 process. It states that the US will
use this process "and a broad array of other trade policy tools
to identify and resolve intellectual property rights issues and related market
access issues of concern. We will continue to collaborate with our trading
partners to develop and implement solutions to issues of concern, and to
encourage reforms that support innovation and creativity through consistent
application and enforcement of the rule of law."
Sen. Hatch
(at right) continued that "Trade Promotion Authority (TPA) is the lynchpin that
brings these elements together. It articulates a shared trade vision for our country,
and lays out clear rules and procedures for consultation and consideration of
any trade agreement. And while I’m pleased that the White House has finally
heeded my call and is asking for its renewal, making TPA a reality requires more
than talk, it demands real leadership and action from the President. Every
President since FDR has sought this authority from Congress, because they’ve
understood that trade is good for America."