Telecom Subcommittee Approves Database Bill

(July 30, 1999) The House Telecom Subcommittee amended and approved HR 1858, a bill regarding database protection, on Thursday, July 29.

There are two competing bills in the House: HR 1858 IH and HR 354. Both deal with the appropriation of other people's databases. HR 1858, the Consumer and Investor Access to Information Act, is sponsored by members of the Commerce Committee. It is a database protection bill in name only. Except in the very limited case of real time market data, database developers are denied a cause of action. The bill also contains many exceptions to the scope of its coverage.

The Subcommittee approved by a unanimous voice vote an amendment to Title I of the bill offered by Rep. Billy Tauzin (R-LA) which further weakens protections for database developers. It adds legal materials to long list of exclusions from the bill. It also adds the requirement that databases must be large to qualify for protection.

HR 354, the Collections of Information Antipiracy Act, is sponsored by members of the Judiciary Committee. It provides a Lanham Act type remedy for database developers. It was approved by that Committee on May 25.

Title II of the HR 1858, which the Finance Subcommittee marked up on July 21, deals only with real time market data. This is the stock price information developed and then sold by exchanges, such as the New York Stock Exchange. The NYSE then sells this real time data to brokerages and others. This is a major source of revenue for the exchanges.

While the Tauzin amendment, and the bill as amended, were approved by the subcommittee by unanimous voice votes, several members criticized the bill or called for further amendment. Rep. Al Wynn (D-MD) was the most direct.

Rep. Wynn

He stated that HR 1858 "may not offer sufficient protection that would actually deter the plundering of databases. My concern is basically that if you do not have adequate protection, you run the risk of having too little investment as we enter the 21st Century. And we need investment in database development."

He cited the needs of realtors and "newspaper publishers, agricultural publishers, and others who have grave concerns about the preservation of their databases and their work product."

Rep. Tauzin, the Chairman of the House Telecom Subcommittee, presided at the short markup session. He stated that "databases are also critical to the growth of electronic commerce. In the electronic marketplace consumers depend on upon the availability of cheap information."

Rep. Ed Markey (D-MA), the Ranking Minority Member of the Subcommittee, was involved in the negotiations which produced the amendment. He described the changes. "It incorporates suggestions and improvements to the bill, especially in defining the scope and applicability of the measure. First, it will change the definition of database to narrow its scope to exclude databases that are made up of only a few items. Thus to qualify, a database, and any section of the database, would have to be compromised, would have to comprised of a large number of items, and could not include only a limited number of facts or items."

"And secondly, the amendment changes the definition of duplicate of a database to clarify that the duplicate must be the result of an extraction from another source."

"And third, it incorporates a changed suggested for the definition of information in order to make clear that works of authorship relate to the statutory definition in existing law. The new language which Chairman Tauzin will offer will also clarify committed scientific and research uses to track the bill's general prohibition against selling or distributing duplicate databases, as opposed to simply making a duplicate database."

Rep. Mike Oxley (R-OH), and original cosponsor of the bill, spoke in support. He said that it protects "the public's access to information."

Rep. Boucher

One Representative who sits on both the Judiciary Committee and its Courts and Intellectual Property Subcommittee, and the Commerce Committee, and its Telecom Subcommittee, Rep. Rick Boucher (D-VA), came out squarely in support of HR 1858. He also suggested not passing any legislation. This would have the same effect, except that it would not protect the stock exchanges.

Rep. Boucher stated: "Having had an opportunity to review this issue, both in the House Judiciary Committee, and in this Committee, I am persuaded that the better approach is offered by Chairman Bliley through this legislation. It is better targeted. It is more narrowly focused."

In his statement to the subcommittee he added: "I support this legislation with some degree of reluctance. And that reluctance doesn't stem from any of its provisions, which I think are well drafted. My reluctance is that I am not completely convinced that Congress needs to legislate in this area."

Rep. Tom Bliley (R-VA), the Chairman of the full Commerce Committee, and the sponsor of HR 1858, also read a statement in support of the bill. "This legislation is important to this Committee's agenda on electronic commerce," said Rep. Bliley. "The intent of this bill is to ensure that consumers will continue to have that critical access to information ..."

Rep. William Luther (D-MN) was another member to voice dissatisfaction with the bill. "There have been concerns raised to me, and perhaps to others, about the legislation before us. Specifically, and perhaps this can be addressed by members of the Committee, but specifically, that the legislation would allow database providers relief after a database has been pirated, or is on the verge of being destroyed. And even then, that the sole restriction would be had by the Federal Trade Commission."

Rep. Luther continued: "Apparently, the FTC would have the sole authority to protect database producers from privacy. So the question that has been raised by persons concerned about the legislation to me, and perhaps to others, is whether or not the legislation goes far enough to fully recognize that value of information databases that companies do provide."

Another Representative who sit on both the Telecom and Courts and Intellectual Property Subcommittees, Rep. James Rogan (R-CA), offered his disgruntled support for HR 1858. First, he "echoed" the comments of Rep. Luther. Then, he said he would support the bill "to keep the process moving." He added that the "many of the realtors in my district are very concerned that if this bill were enacted it would impair their livelihood substantially." He explained that "local realtors depend upon real estate listings as part of their livelihood."

After Rep. Rogan expressed this concern, Rep. Gene Green (D-TX) added that realtors in his Houston district are likewise concerned, and that he wants new language in the bill. Similarly, Rep. Bobby Rush (D-IL) spoke in favor of protecting realtors' listings.

The members of the subcommittee who were present for the votes to adopt the Tauzin amendment, and to report the bill, were Rick Boucher (D-VA), Nathan Deal (R-GA), John Dingell (D-MI), Anna Eshoo (D-CA), Gene Green (D-TX), Bart Gordon (D-TN), Ron Klink (D-PA), William Luther (D-MN), Ed Markey (D-MA), Mike Oxley (R-OH), James Rogan (R-CA), Bobby Rush (D-IL), Tom Sawyer (D-OH), John Shimkus (R-IL), Cliff Stearns (R-FL), Billy Tauzin (R-LA), Heather Wilson (R-NM), and Al Wynn (D-MD).