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Tech Law Journal
Daily E-Mail Alert
Oct. 3, 2000
7:45 AM ET.
Alert No. 33.

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News Briefs

10/2. The House rejected HR 4049, the Privacy Commission Act, on a roll call vote of 250-146. The bill was considered under a suspension of the rules, meaning that a 2/3 majority was required for passage. It fell 14 votes short. The bill, which is sponsored by Rep. Asa Hutchinson (R-AR) and Rep. James Moran (D-VA), would create a 17 member commission to study a broad range of privacy issues, involving both the government and private sector, and including medical and financial records. See, statement by Rep. Hutchinson. A companion bill is pending in the Senate. The Congress is on the verge of recessing.
10/2. The House Government Reform Committee's Government Management, Information, and Technology Subcommittee held a hearing titled " Is it a Good Idea?" The site is a portal for government information. Its primary function is a search engine. Eric Brewer, Chairman of the Federal Search Foundation (and co-founder of Inktomi) stated that the site has indexed 27 Million documents in government web sites. Witnesses from OMB and GSA praised the web site. The GAO witness offered several criticisms: the site lacks adequate security, the site can be used for malicious electronic searches, and, there are questions about the relationship between the government and private parties involved.
10/2. The Gartner Group released the summary of a study [PDF] regarding a "digital divide" which found that 50% of U.S. households have Internet access. It also projects that by 2005 75% of U.S. households will be connected. See, release.
10/2. The U.S. Court of Appeals (9th Cir.) heard oral argument in Napster v. A&M Records. See also, statement of RIAA CEO Hillary Rosen. 
10/2. Napster CEO Hank Barry released a statement about attempts to settle with record companies. "Napster has made serious proposals to each of the major record companies and their publishing affiliates that involve payments of substantial percentages of expected company revenues to compensate artists and rights holders - proposals whose most conservative estimates would result in payments of over $500 million to the industry in just the first year alone. Every one of these proposals has been rejected, and the record companies have made no counterproposals. Just as we will continue to press our case in court and on Capitol Hill, we will continue to seek an agreement with the recording industry because we believe that our 32,000,000 users deserve nothing less."
10/2. The Supreme Court of the U.S. denied the petition for writ of certiorari in Sony Computer Entertainment v. Connectix. See, S.C.U.S. Docket No. 00-11. San Mateo, CA, based Connectix produces cross platform technologies, including Virtual PC for Microsoft Windows, Virtual PC for Red Hat Linux, and Virtual Game Station. Sony filed a complaint in U.S. District Court in Jan. of 1999 alleging that the Virtual Game Station, which allows users to run PlayStation games on PCs, infringes Sony copyrights. The District Court issued a preliminary injunction of sale of the Virtual Game Station. In Feb. 2000, the U.S. Court of Appeals (9th Cir.), issued it opinion lifting the District Court injunction. [Appeal No. 99-15852.] Other legal claims are also pending in the District Court. Sales of the Virtual Game Station continue.
10/2. Former rivals Microsoft and Corel announced a strategic alliance. Microsoft has purchased 24 million non-voting convertible preferred shares of Corel at a total purchase price of  $135 Million. The companies will also work together to support the development, testing and marketing of new products related to Microsoft's .NET platform. Microsoft's and Corel's release also referenced that "both companies have agreed to settle certain legal issues between Corel and Microsoft", but did not specify what the legal issues were, or how they were settled.
10/2. The NIST announced that its new Advanced Encryption Standard will be Rijndael. This is developed by Belgian cryptographers Joan Daemen of Proton World International and Vincent Rijmen of Katholieke Universiteit Leuven. The proposed selection of Rijndael as the AES will be formally announced in the Federal Register in several months, and then NIST will receive public comments for 90 days. Under Sec. for Technology Cheryl Shavers said in a statement that "This is a proposed standard that will be used by federal civilian agencies -- if adopted by the Secretary of Commerce after the public comment process." She added that "those in the private sector may use any encryption technique they choose." See also, statement by NIST Director Ray Kramer.
10/2. The EU and the USTR reached an agreement regarding procedures for reviewing whether the Foreign Sales Corporation (FSC) repeal and replacement legislation, currently pending in Congress, is WTO consistent. See, EU release and USTR release. The FSC scheme allows a portion of a U.S. taxpaying firm's foreign-source income to be exempt from U.S. income tax. It benefits software companies, among others. The EU filed a complaint about the FSC scheme with the WTO, alleging that it is a prohibited export subsidy. A WTO dispute settlement panel sided with the EU last fall, and the WTO Appellate Body upheld its findings in February. The EU also objects to the pending replacement bill, HR 4986, the "FSC Repeal and Extraterritorial Income Exclusion Act of 2000", sponsored by Rep. Bill Archer (R-TX). For background, see May 2, 2000 press briefings by Lamy and Eizenstat and by Eizenstat and Talisman.
10/2. The EPIC announced that the FBI released 565 pages from government files on the Internet monitoring program known as Carnivore, in response to its Freedom of Information Act (FOIA) request, and law suit. EPIC filed a Complaint in U.S. District Court (DC) on July 31 under the FOIA to compel production of Carnivore records. EPIC noted in a release that "Of the material released, nearly 200 pages were withheld in full and another 400 pages were redacted, many completely except for the page numbers. The source code to the Carnivore system was withheld." EPIC Exec. Dir. Marc Rotenberg stated: "We intend to pursue the litigation until the relevant documents are disclosed." For background, see EPIC's  Brief in Support of Motion for TRO.
10/2. Commerce Sec. Norman Mineta gave a speech to the NAM's "Get Tech" event regarding high tech workers. He stated that "the Commerce Department has been focusing on ways to help industry meet the demand for technology workers. We have held town meetings, worked with business and community leaders, and tried to determine why more young people aren't training for these good, high paying jobs. One of the most important reasons given was this: students are not getting information about new economy jobs early enough to effectively guide their educational and career decisions."
10/2. Alan Larson, Under Secretary of State for Economic Affairs gave a speech at the "Net Diplomacy 2000 Conference on the Internet & Diplomacy" in Washington DC. He stated: "If you look at the websites of even some of the most major US e-commerce merchants --,,, and others -- you will find that they are refusing to ship overseas. Shipping difficulties and the magnitude and unpredictability of taxes and tariffs are constraints on international e-commerce. ... A major international effort must be made to help developing countries assess their readiness for electronic commerce and to provide help to those who wish to improve policies that are deficient." He offered several recommendations, including: "competition in the telecommunications market", "enable goods to move efficiently through customs", adopt "open skies civil aviation agreements", "open postal and delivery service regimes to competition", and "examine the regulatory environment".
10/2. ICANN announed its review procedure for applications for new TLDs. (The application deadline was Oct. 2.)
10/2. Bill Clinton announced his intent to nominate Philip Bredesen to the National Commission on Libraries and Information Science. Bredesen is a former Mayor of Nashville, TN. See, release.
9/30. California Gov. Gray Davis signed AB 1767, sponsored by Assemblywoman Charlene Zettel (R-Poway). This bill expands the computer and high-tech equipment forfeiture statute to most crimes in which such equipment could be used to commit the crime. It also provides for forfeiture of computer equipment of parents where the defendant is a minor, unless "the parent or guardian files a signed statement with the court at least 10 days before the date set for the hearing that the minor shall not have access to any computer or telecommunications device owned by the parent or guardian for two years after the date on which the minor is sentenced."
9/30. California Gov. Gray Davis signed AB 2720, sponsored by Assemblyman Keith Olberg (R-Victorville). This bill creates a Bipartisan California Commission on Internet Political Practices to examine issues posed by campaign activity on the Internet in relation to the goals and purposes of the Political Reform Act of 1974, and to make recommendations for appropriate legislative action. Compare, FEC Notice of Inquiry Regarding Use of Internet for Campaign Activity (Nov. 99).
Editor's Note: This column includes all News Briefs added to Tech Law Journal since the last Daily E-Mail Alert. The dates indicate when the event occurred, not the date of posting to Tech Law Journal.
New Documents

Calif: AB 1767 re expanding the computer and high-tech equipment forfeiture statute, signed 9/30 (HTML, Cal.).
Calif: AB 2720 re creating a commission to study political activity on the Internet, signed 9/30 (HTML, Cal.).
Larson: Speech re promoting electronic commerce around the world, 10/2 (HTML, State).
New and Updated Sections

Calendar (updated daily).
News from Around the Web (updated daily).
Quote of the Day

"It will not be possible to have a successful information economy if governments attempt to suppress or control the flow of information in their societies or between countries."

Alan Larson, Under Secretary of State


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