|4/5. The Wall Street Journal writes in its Thursday edition
that the FCC is expected to approve Deutsche Telekom's
acquisition of VoiceStream as early as Friday. See, full
story. (Subscription web site.)
|4/4. The House
Commerce Committee's Telecom Subcommittee held a hearing
titled the E-Rate and Filtering: A Review of the Children's
Internet Protection Act. Last year, the Congress passed,
and President Clinton signed, legislation containing the CIPA.
The statute requires schools and libraries receiving e-rate
subsidies to use filtering technologies on computers with
Internet access that are used by children. The ACLU and American Library Association
have filed lawsuits challenging the constitutionality of the
CIPA as applied to libraries.
Hearings on legislation are usually held before legislation is
enacted. Nevertheless, this hearing gave proponents and
opponents of the CIPA another opportunity to state their
views. Rep. Chip
Pickering (R-MS) and Rep. Steve Largent
(R-OK) argued that the statute is necessary to protect
children, and that it is constitutional. On the other hand, Rep. Jane Harmon
(D-CA) said that "I am not sure that these tools should
be mandated by the government." Rep. Roy Blount (R-MO)
said that "there are good arguments on both sides."
Marvin Johnson of the ACLU verbally sparred with Reps.
Pickering and Largent. He testified that the statute is
unconstitutional, that filtering does not work, and that pormography
does not harm children. One librarian (Laura Morgan of the
Chicago Public Library) testified in support of the bill, and
argued that men who view pormography at the public libraries
create a hostile environment for the women who work in or use
the libraries. Another librarian (Carolyn Caywood of Virginia
Beach's library system) testified that local libraries, not
the federal government, should set Internet access policies.
Two representatives of companies that provide filtering
software testified that filtering does work, as did Bruce
Taylor, of the National
Law Center for Families and Children.
|4/4. Rep. John
Dingell (D-MI), the Ranking Member of the House Commerce Committee,
gave an address
in Washington DC in which he advocated FCC reform and passage
of the Tauzin Dingell bill. "The FCC must be transformed
to meet the needs of the Information Age," said Dingell.
"Too often the FCC is hamstrung by dint of its antiquated
design. Separate bureaus assigned to each segment of the
industry may have worked well enough in days gone by. But
today the FCC's fiefdom mentality is simply a relic –
ill-equipped to handle the convergence of technology that is
at the heart of this modern industry." He added that
"It makes no sense for broadband services offered by a
cable company to be regulated differently than broadband
services offered by a telephone company, wireless provider, or
any other communications company for that matter. That is why
Chairman Tauzin and I introduced HR
2420 last Congress" and "intend to re-introduce
broadband regulatory reform legislation shortly after the
|4/4. Telephone and Data Systems filed a comment
[PDF] with the FCC in support of Verizon Wireless's petition
to the FCC [PDF] of March 27 to defer action on ITFS
applications. "TDS agrees with Verizon Wireless that the
FCC should not now take actions which may preclude use of the
2500-2690 MHz band for 3G purposes." TDS continued that
"it is, at present, difficult to discern a clear path to
an adequate allocation of spectrum for 3G purposes. Yet the
public interest requires that a path to an adequate frequency
allocation for 3G must somehow be found. Such a path may
involve innovative forms of spectrum sharing or segmentation
or new types of frequency pairing. And, given the Defense
Department's adamant opposition to giving up many of the
frequencies it uses, the FCC may have to consider reallocation
or sharing of some of the MDS/ITFS frequencies, if there is to
be a 3G allocation. Thus, TDS believes Verizon Wireless to be
entirely correct that the FCC's Mass Media Bureau should not
now grant the pending two-way applications."
|Privacy & Security
|4/4. The House Veterans'
Affairs Committee's Oversight and Investigations
Subcommittee held a hearing on information technology. See,
prepared testimony of witnesses: Richard
Griffin (Inspector General, Department of Veterans
McClure (General Accounting Office), Ken
Brandt (Tiger Testing), Scott
Sherman (EMC2 Corporation), Karl
Ware (BioNetrix Systems Corporation), and Anthony
Principi (Secretary, Department of Veterans). McClure
testified that "the department has encountered numerous
and consistent challenges associated with managing IT,
including ... ineffective computer security management."
In addition, House Speaker Dick
Armey (R-TX) submitted a statement
for the record, in which he stated that the VA "is not
the only agency with such a poor track record." He cited
the Horn subcommittee report on agency computer security, and
last year's GAO report that found that 97% of federal agency
web sites failed to meet the privacy standards recommended by
the FTC for private sector web sites. He concluded by
condemning "the Clinton Administration's eleventh hour
imposition of new regulations addressing medical privacy
issued under the Health Insurance Portability and
Accountability Act (HIPAA)" for "putting even more
private, personally identifiable medical information in the
hands of health care bureaucrats."
4/4. The GAO
released a report
[PDF] titled Information Security: Safeguarding of Data in
Excessed Department of Energy Computers. It stated that the
"DOE does not have standardized instructions,
verification procedures, or training for agency and contract
employees on how to properly clear excessed computers. DOE
also does not ensure that procedures used to remove all
software, information, and data from systems are effective. As
a result, some of the excessed computers we inspected at DOE
headquarters had information still stored on the hard
|4/4. The NTIA published in its web site electronic comments
that it has received regarding the benefits and burdens of requiring
consumer consent to receive information electronically. On
April 3 the NTIA
and FTC held a public
workshop on this topic. These agencies are required by the E-SIGN
Act, passed last year, to conduct a study. See,
comments from United
Parcel Service, Federal
Express Corporation, Register.com,
|Business Method Patents
|4/4. The House
Judiciary Committee's Subcommittee on Courts, Internet,
and Intellectual Property held a hearing on business method
patents. Rep. Howard
Coble (R-NC), the Chairman of the Subcommittee, defended
business method patents in his opening
statement. He stated that "intellectual property and
the Internet are compatible. In fact, there is a long history
of method patents and software enabled inventions." Rep. Howard Berman
(D-CA) and Rep. Rick
Boucher (D-VA) advocated legislation to reform the
business method patents process. On April 3 they introduced HR
1333, the Business Method Patent Improvement Act of 2001. Rep. Zoe Lofgren
(D-Silicon Valley) and Rep. Asa Hutchison
(R-AR) also attended, but did not speak. Rep. John Conyers
(D-MI), the Ranking Member of the full committee, did not
attend, but submitted a statement
for the record.
Rep. Berman stated two concerns about business method
patents in his opening
statement. First, "Should patent protection be
granted to processes for achieving a business objective when
such processes involve no physical transformation, physical
element, technological innovation, or industrial application?
Put another way, should an abstract idea for conducting or
organizing business operations receive patent
protection?" He continued that "My second set of
concerns involves the quality of some business method patents
issued by the PTO in recent years." See also, April 3 statement
in the Congressional Record.
Rep. Boucher stated that "something is
fundamentally wrong with a system that enables individuals to
get patents for doing the seemingly obvious. Some examples.
Priceline today is utilizing a business method patent on a
reverse auction, name your own price system, on the Internet.
This patent was awarded even though the market economy of the
western world, and the entire theory of microeconomics, is
predicated on individuals setting the price at which they are
willing to purchase something." He added that the
awarding of business method patents results in "the
restriction of competition, and the lessening of innovation,
precisely the opposite of the result that the patent laws are
designed to achieve."
Nicholas Godici, the acting head of the USPTO, reviewed the
"Business Methods Patent Initiative," a program
intended to improve the process. The USPTO is establishing
partnerships with affected industries so that they can educate
patent examiners, establishing "Electronic Information
Centers" which provide examiners with access to over 900
databases, giving patent examiners authority to ask for
information that may be necessary to examine a patent
application, and instituting a second level review of allowed
business method patent applications. He stated that the result
of the initiative has been a decrease in the allowance rate.
Michael Kirk, Exec. Dir. of the American Intellectual Property
Law Association (AIPLA), and Ronald Myrick, President of
the Intellectual Property Owners
Association (IPO) both stated their opposition to any
legislation in the area of business method patents.
Steinberg, General Counsel of Travelocity, was the
sole witness to oppose business method patents. He said that
"we believe that the proliferation of these patents
represents a serious threat to the growth of electronic
commerce and, if left unchecked, could impede the ability of
many businesses to adapt to the Internet. We urge Congress to
take prompt action to prevent this from occurring." He
also expressed support for the Berman Boucher bill.
|Diversion of USPTO Fees
|4/4. Rep. Coble stated at the hearing on business method
patents that "My number one priority in Congress is to
work to ensure that the PTO can retain all of its fees to
improve the quality of examination to be as high as humanly
possible." On April 3, Reps. Berman and Boucher
110, a resolution that would accomplish this. Rep. Conyers
suggesting in his statement that one of the root problems with
business method patents is that the diversion of fees deprives
the USPTO of the funds necessary to modernize. The IPO's
Myrick, and the AIPLA's Kirk, both stated their support for
ending the diversion. However, the Kirk noted that under
President Bush's budget, $200 Million may be diverted in FY
|4/3. The FTC and Microsoft and Hewlett Packard (HP) reached
agreements regarding their marketing of handheld computers.
These matters concern the "Can Your Palm Do That?"
ads for the HP Jornada Pocket PC. The two companies agreed
that they "shall not misrepresent, in any manner,
expressly or by implication, the ability of such product to
access the Internet or email accounts, or any performance
characteristic of such product affecting access to the
Internet or email accounts." Specifically, the FTC filed
complaint [PDF] against HP, and simultaneously entered
into an agreement
to settle the matter. The FTC also filed an administrative
complaint [PDF] against Microsoft, and simultaneously
entered into an agreement
to settle the matter. Pocket PC users must purchase and carry
additional equipment such as a modem to get mobile access to
the Internet and e-mail, a fact not clearly disclosed in the
joint Microsoft-HP advertising campaign. See also, FTC release.
|4/4. A grand jury of the U.S. District Court (NDCal)
returned an indictment against Geoffrey Osowski and Wilson
Tang charging one count of conspiracy to commit computer and
wire fraud in violation of 18 U.S.C. § 371, one count of
computer fraud in violation of 18 U.S.C. § 1030(a)(4), and
three counts of wire fraud in violation of 18 U.S.C. § 1343. The
indictment states that defendants used their positions as
accountants at Cisco to
illegally obtain Cisco stock; they exceeded their authorized
access to computer systems at Cisco in order to enter a
computer system used by the company to manage stock option
disbursals, used their unauthorized access to identify control
numbers to track authorized stock option disbursals, created
forged forms purporting to authorize disbursals of stock,
faxed the forged requests to the company issuing Cisco stock,
and directed that stock be placed in their brokerage accounts.
The total value of these shares was about $2.3 Million. Joseph
Sullivan of the USAO
Computer Hacking and Intellectual Property Unit is prosecuting
the case. See, FBI
affidavit. See also, USAO
|4/4. The Senate
Judiciary Committee's Antitrust, Business Rights, and
Competition Subcommittee held a hearing to examine competitive
choices concerning cable and video. Sen. Mike DeWine (R-OH)
presided. See, prepared testimony of witnesses: Eddy
Hartenstein (DIRECTV Global), Robert
Sachs (National Cable Television Association), Jerry
Kent (Charter Communications), Robert
Currey (RCN Corporation), and Gene
Kimmelman (Consumers Union).
4/3. The U.S.
Court of Appeals (2ndCir) issued its opinion
v. The Gap, a case regarding damages in copyright
infringement actions, and the fair use doctrine. Affirmed in
part, vacated in part, and remanded.
4/4. SBC submitted a Section
271 petition to the FCC for
permission to offer long distance service in Missouri. On
March 6 the Missouri Public Service Commission endorsed SBC's
application. See, SBC
4/4. President Bush nominated Theodore Kassinger to be
General Counsel of the Department of Commerce. See, release.
|4/4. The House passed HR 8, a bill to phase out the estate
and gift tax over a 10 year period by a vote of 274 to 154,
and then recessed until April 24, for the traditional Easter
break. The Senate will recess later this week when it
completes its consideration of President Bush's budget.
|Greenspan on Trade
|4/4. The Senate
Finance Committee held a hearing titled International
Trade and the American Economy. The witnesses were Alan
Greenspan and Mickey Kantor. Greenspan said in his prepared
testimony that "there is also no doubt that this
transition to the new high-tech economy, of which rising trade
is a part, is proving difficult for a large segment of our
workforce ... . This is most evident in the rising fear of job
skill obsolescence that has induced a marked increase in
experienced workers going back to school -- often community
colleges -- to upgrade their skills for a rapidly changing
work environment. While major advances in standards of living
are evident among virtually all nations that have opened their
borders to increased competition, the adjustment trauma
resulting from technological advances as well as globalization
has also distressed those who once thrived in industries that
were once at the cutting edge of technology but that have
become increasingly noncompetitive." He added, "Yet
the protectionist propensity to thwart the process of the
competitive flow of capital, from failing technologies to the
more productive, is unwise and surely self-defeating."
See also, prepared
statement [PDF] of Chairman Charles Grassley (R-IA).
|4/4. Rep. Duncan
Hunter (R-CA) introduced a bill to revoke normal trade
relations status for the People's Republic of China. He stated
that "A favored trading partner with our country would
follow proper protocol and not continue to hold our service
men and women, along with our equipment, after being asked for
their return. The fact is, while we trade with China, they
prepare for war. The Communist regime is producing long-range
ballistic missiles, which are targeted at U.S. military bases
and American cities. They have engaged in espionage activities
in which U.S. military secrets were stolen and they have
developed weapon systems that threaten the U.S. and its
allies." See, Hunter
release. The bill would revoke the trade status that the
U.S. extends to the PRC on an annual basis. Last year the U.S.
extended permanent normal trade relations status (PNTR) to the
PRC. However, that only takes effect when the PRC joins the World Trade Organization. The
negotiations over PRC ascension to the WTO drag on.
|More New Bills
|4/3. Rep. Johnny
Isakson (R-GA) introduced HR 1349, a bill to repeal the
50% limitation on courses offered through telecommunications
for student financial assistance programs. It was referred to
the Committee on Education and the Workforce.
4/4. Rep. Mike
Rogers (MI) introduced HR 1408, a bill intended to stop
financial fraud by creating a new computerized network that
would link together the anti-fraud databases of various
financial regulators and law enforcement agencies. Rep. Michael Oxley
(R-OH), Chairman of the House Financial
Services Committee, is an original cosponsor. See, release.
4/3. Rep. Marge
Roukema (R-NJ) introduced HR 1365, a bill to amend title
III of the Elementary and Secondary Education Act of 1965 to
provide for digital education partnerships. It was referred to
the Committee on Education and the Workforce.
|9:00 AM. The USITC will
hold a Section 337 evidentiary hearing regarding the
importation of semiconductor chips with minimized chip package
size. (Inv. No. 337-TA-432.) See, notice of
investigation. Judge Sidney Harris will preside. Location:
Courtroom B, ITC Building, 500 E Street SW, Washington DC.
9:30 AM. The House
Commerce Committee's Subcommittee on Oversight and
Investigations will hold a hearing titled "Protecting
America's Critical Infrastructures: How Secure are Government
Computer Systems?" Location: Room 2322, Rayburn Building.
The committee will observe a cyber security penetration test
demonstration by Glenn Podonsky (U.S. Department of Energy).
Then the following witnesses will testify:
• Ron Dick (FBI's National Infrastructure Protection
• Sallie McDonald (GSA).
• John Tritak (Department of Commerce).
• Robert Dacey (General Accounting Office).
• Tom Noonan (Internet Security Systems, Inc).
10:00 AM. The Senate
Judiciary Committee will hold a hearing on the nominations
of Larry Thompson to be Deputy Attorney General and Theodore
Olson to be Solicitor General. Sen. Orrin Hatch (R-UT)
will preside. Location: Room 226, Dirksen Building.
10:00 AM. The Senate
Finance Committee will hold a hearing titled
"Taxpayer Beware: Schemes, Scams and Cons" that will
examine tax avoidance scams that are promoted via the
Internet. Location: Room 215, Dirksen Building. The scheduled
• Aaron Bazar (former seller of tax scams).
• JJ MacNab (American Bar Association).
• Robert Sommers (attorney).
• Jay Adkisson (financial adviser).
• Joseph Hodges (American Bar Association).
• Charles Rossotti (Commissioner, Internal Revenue
• Hugh Stevenson (FTC Bureau of Consumer Protection).
• Michael Brostek (GAO).
10:00 AM. Sen. Tom Daschle (D-SD) and Rep. Richard Gephardt
(D-MO) have scheduled an event to release the "Democrats'
High Tech Agenda." See, PPI
11:00 AM. Lawrence Grossman (former President of NBC News and
PBS), Newton Minow (frmr. chairman of the FCC and PBS),
and representatives from high tech corporations and non-profit
groups will hold a press conference at the National Press Club to
release a report. They will advocate an "Educational
Initiative Equal in Magnitude to the Historic Land-Grant
Colleges Act to Deliver the Marvels of our Nation's Libraries,
Colleges and Museums to Every Home, School and Workplace
through the Innovative Use of Technology." Location:
Murrow Room, National Press Club, 13th Floor, 529 14th St. NW,
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