Tech Law Journal Daily E-Mail Alert
May 3, 2001, 8:00 AM ET, Alert No. 179.
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Charles James Confirmation Hearing
5/2. The Senate Judiciary Committee held a hearing on the nomination of Charles James to be an Assistant Attorney General. If confirmed by the Senate, he will oversee the Antitrust Division of the Department of Justice (DOJ). He will have major responsibility for determining whether or how to proceed with the government's antitrust case against Microsoft. He cruised through the hearing with no opposition, no criticism, and almost no questions relevant to the Microsoft case. He revealed little about how he would proceed.
James was introduced and praised by Sen. George Allen (R-VA) and Sen. John Warner (R-VA). Sen. Orrin Hatch (R-UT), the Chairman of the Committee, called James "one of the most qualified people for this job." He added that "you appear to be well on your way to being confirmed." Hatch said that "I intend to put you on our markup for tomorrow," but any member could hold the matter over until next week.
Sen. Maria Cantwell (D-WA), the newly elected Senator from Microsoft's home state of Washington, asked James about antitrust issues involving apples -- the fruit, not the computers. She expressed her concern about concentration in the apple processing market. Similarly, Sen. Charles Grassley (R-IA) devoted all of his questions to the impact of antitrust on rural communities. He too is concerned about increased agribusiness concentration.
Sen. Pat Leahy (D-VT), the ranking Democrat on the Committee, asked James not to involve himself in any matters affecting his former clients at the law firm of Jones Day. He also asked James not to seek recusal waivers.
Sen. Arlen Specter (R-PA) asked James a thinly veiled question about how he will proceed in the Microsoft case. Specter asked James for his "views regarding the continuity of the Department." James gave a rambling and vague response that left observers scratching their heads and comparing their notes. "Well, Senator Specter, it is certainly my perspective that, whenever the Department begins a litigation, commences, if there is at some juncture of the case, an adverse ruling, the appropriate thing for the Department to do, and that is, is to evaluate the nature of the ruling, and evaluate (inaudible word) the procedural posture is, and determine whether there are appropriate issues that can be carried forward legitimately to an appeal, and certainly, with the, my expectation, is (inaudible) to follow that procedure in the future." Then James concluded, "We will look as closely as possible to preserving victories, and rectifying defeats."
Sen. Hatch also addressed antitrust and high tech generally. He asked, "Should the antitrust laws be applied to the high tech industry?" James responded, "Absolutely." Hatch also referenced "network effects" and asked, "Do you think monopoly is more likely to occur in high tech industries than in other industries? And if so, what are the implications of your conclusions for antitrust enforcement." James addressed network effects, and added that he hopes to publish "some clear statements of policy" -- in the future.
Telecom Act
5/2. The Senate Judiciary Committee's Antitrust, Business Rights, and Competition Subcommittee held a hearing titled The Telecom Act Five Years Later: Is it Promoting Competition? Sen. Mike DeWine (R-OH) and Sen. Herb Kohl (D-WI), the Chairman and ranking Democrat on the Subcommittee conducted the hearing. Both Senators suggested that it might be time to revisit the Telecom Act of 1996. "We've been waiting for local phone competition for five years, and we are still being kept on hold," said Sen. Kohl. "The biggest lesson seems to be this: Congress can't mandate competition, and if competition doesn't make sense, laws like the Telecom Act won't really work." He concluded: "maybe we need to tinker with the Act a little more. We need to ask whether the Act needs more enforcement authority -- through antitrust laws or by the FCC -- and we also should ask whether we need to give the Regional Bells more of an incentive to open up their networks."
However, witnesses praised the competitive and deregulatory provisions of the 1996 Act, and urged Congress to give it more time. Pat Wood, Chairman of the Texas Public Utilities Commission, stated that "the Act can work," and discussed his State of Texas as an example. See, Wood's prepared testimony. "We did the right thing in 1996. Stick with it," said former FCC Chairman Reed Hundt. See, Hundt's prepared testimony. See also, prepared statements of other witnesses: David Dorman (AT&T), James Robbins (Cox Communications), Larissa Herda (Time Warner Telecom), and James Ellis (SBC).
Reed Hundt also commented to reporters afterwards regarding HR 1542, the Internet Freedom and Broadband Deployment Act of 2001, sponsored by Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI). He said that "a lot of people on the Senate side think the bill is a solution in search of a problem." He also added that even if it were passed, "it may not happen soon enough to matter to the businesses."
More News
5/2. Sen. Charles Grassley (R-IA) and Sen. Max Baucus (D-MT) sent a letter to the Congressional Budget Office (CBO) asking for economic data on how consumers, state and local governments and Internet businesses would fare under additional Internet sales taxes. See, release and letter.
5/2. The National Academies' Computer Science & Telecommunications Board and the FCC's Office of Engineering and Technology hosted a tutorial titled Internet's Coming of Age.
5/2. The House Science Committee's Subcommittee on Research held a hearing titled Improving Math and Science Education so that No Child is Left Behind.
New Documents
Armey: letter to HHS Sec. Thompson re medical privacy, 5/2 (HTML, Armey).
CDT: letter to Atty Gen Ashcroft re privacy issues, 5/2 (HTML, CDT).
Baucus: address re PNTR and China, 5/1 (HTML, State).
Copyright Office Oversight Hearing
5/2. The House Judiciary Committee's Subcommittee on the Courts, the Internet, and Intellectual Property held an oversight hearing on the U.S. Copyright Office. Rep. Howard Coble (R-NC), the Chairman of the Subcommittee presided. Rep. Howard Berman (D-CA), the ranking Democrat, and Rep. Tammy Baldwin (D-WI), a new member of the Subcommittee, also participated. Marybeth Peters, the Register of Copyrights, was the sole witness. See, Peters' prepared testimony.
Rep. Baldwin asked Peters for an update on distance learning issues. On March 7, Sen. Orrin Hatch (R-UT) and Sen. Pat Leahy (D-VT) introduced S 487, the Technology, Education and Copyright Harmonization (TEACH) Act. On March 13, the Senate Judiciary Committee held a hearing on bill; Peters provided testimony. The bill would amend 110(2) and 112 of the Copyright Act to extend the distance learning exemptions enacted in 1976 to digital delivery media. The TEACH Act incorporates many of the recommendations made by the Copyright Office in 1999 in a study mandated by the the DMCA. Under current law, there are exemptions for "face-to-face" and "transmission" teaching activities; but Internet based education is not referenced. Peters told Baldwin that there are some differences between the two sides -- the education community and copyright owners. Peters said that talks began last week to work out their differences, and "hopefully they will be able to reach an agreement, and that will form the basis of the bill."
Rep. Coble questioned Peters regarding the Copyright Office's Section 104 proceeding. This section of the Digital Millennium Copyright Act [PDF] directs the Copyright Office and the NTIA to prepare a report for the Congress examining the effects of the amendments made by Title 1 of the DMCA and the development of electronic commerce on the operation of 109 and 117, and the relationship between existing and emerging technology and the operation of these sections. Peters stated that the 104 report would be completed, "hopefully in the month of May." See also, Copyright Office web page on 104.
Copyright Office Budget
5/2. The Senate Appropriations Committee's Legislative Branch Subcommittee held a hearing on proposed budget estimates for FY 2001 for the Library of Congress, Joint Economic Committee, Joint Tax Committee, and the Congressional Research Service. The Librarian of Congress, James Billington, submitted prepared testimony on the Library of Congress, including its Copyright Office. He stated that the "The Library requests a decrease in the Copyright Office's Offsetting Collections Authority -- from $23,500,000 to $21,880,000. The $1,620,000 decrease in Offsetting Collections Authority is based on projected annual registration receipts of $21,500,000 and the use of $380,000 from the Copyright Office no-year account."
Billington's testimony also addressed DMCA proceedings. "The DCMA requires the Copyright Office to conduct a rulemaking every three years on exemptions that permit circumvention of technological access control measures in order to engage in noninfringing uses of copyrighted works. Two relatively narrow exemptions were granted on October 28, 2000, but at the conclusion of this process of conducting the rulemaking, I expressed several concerns that might warrant congressional consideration. The rapid changes in technology may require the rulemaking process to be conducted at intervals shorter than the triennial review enacted under the DMCA. In addition, I ask that the Congress address the further refinement of the appropriate criteria for assessing the harm to noninfringing uses in scholarly, academic, and library communities as well as guidance on the precise scope of the term "class of works." 
USPTO
5/2. Rep. Howard Coble (R-NC) stated at the oversight hearing for the Copyright Office that he is opposed to the diversion of USPTO user fees to fund other government programs. "I spoke with the President about it, in fact, ten days ago. I don't mean to be -- you never know who is listening to you -- I don't mean to put the President on the spot. But, he seemed to be very understanding. And he seemed to share my concern. I don't want to that in the Post tomorrow that I am quoting the President as defending it. But, he said, "This doesn't seem right." And it doesn't seem right. Well, these exclusively, exclusive user fees, that all of a sudden become fair game for everybody who wants to appropriate here, there, and yonder."
TLJ asked Rep. Coble after the hearing about the next head of the USPTO. He stated that he was aware of reports that it would be former Rep. James Rogan (R-CA). He stated that "I would be very comfortable with him at the helm." Rogan was a member of the Courts and Intellectual Property Subcommittee until he lost his bid for re-election last November.
New Bill
5/1. Rep. Mark Green (R-WI) introduced HR 1655, a bill to amend Title 18 to punish the placing of sezual explicit photographs on the Internet without the permission of the persons photographed. The bill was referred to the House Judiciary Committee.
China PNTR
5/1. Sen. Max Baucus (D-MT) gave an address in the Senate on U.S. China Policy. He stated that "Last year Congress approved, by a wide margin, legislation granting Permanent Normal Trade Relations status to China once they join the World Trade Organization. The benefits of incorporating China into the world trade community were clear. American farmers, businesses, and workers would be well served by a growing and liberalized economy in China. Economic growth in China would, over the long term, lead to a larger middle class making its own demands on the government for greater accountability and personal choice, just as happened in South Korea and Taiwan. Membership in the WTO would bring international disciplines to the Chinese economy. And the reformers, led by Premier Zhu Rongji, would be strengthened. If anything, nurturing growth in our economic and trade relationship with China is more important than ever." He added that "we want full access for American goods and services to the largest country in the world with the fastest growing economy. That means completing China's accession to the WTO, granting them PNTR, and supporting our businesses' efforts to penetrate the Chinese economy. It does not mean revoking China's established normal trade status."
FCC Merger Reviews
5/2. Peter Tenhula, Senior Legal Advisor to FCC Chairman Michael Powell, spoke at luncheon hosted by the Federal Communications Bar Association's Telecommunications Competition Issues Committee. He discussed Chairman Powell's approach to merger reviews and the public interest standard. "You will see less competitive analysis that is duplicative of the antitrust authorities," said Tenhula. "We are not going to spend a lot of time negotiating conditions. We have got better things to do." However, he added that while Powell may not have supported imposing certain conditions in previous merger reviews, "he is going to enforce them."
Tenhula also stated that Powell has said that the public interest standard is "an empty vessel." But, "that is not to say that the pendulum is going to swing back. We have got to live with our precedents." Nevertheless, he stated that "it is going to be more limited" and "we are not going to legislate through mergers." Tenhula spoke to, and answered questions from, a group of lawyers who work for law firms, trade groups, the FCC, and the DOJ's Antitrust Division.
Privacy
5/2. House Majority Leader Dick Armey (R-TX) wrote a letter to HHS Secretary Tommy Thompson regarding medical privacy regulations. He stated that "Now that the President has decided to finalize the medical privacy regulation under the Health Insurance Portability and Accountability Act (HIPAA), I write to suggest specific changes to that controversial regulation, in hopes you will use your authority to strengthen rather than endanger the medical privacy of all Americans." Specifically, Armey suggested that "We demand federal agents obtain a search warrant before going through our ... medical records."
5/2. The CDT, EPIC, ACLU, Free Congress Foundation, and other groups wrote a letter to Attorney General John Ashcroft regarding three privacy issues: Carnivore, electronic surveillance by law enforcement, and medical records. The letter stated that "The FBI's current use of the Carnivore system ... threatens the privacy of electronic communications and cannot be squared with the Fourth Amendment, the Electronic Communications Privacy Act, or the Foreign Intelligence Surveillance Act." The letter also stated that "The Electronic Communications Privacy Act of 1986 and the other surveillance statutes should be updated". Finally, the letter stated that the HHS Department regulation implementing HIPAA "does not meaningfully limit law enforcement access to sensitive medical information."
Today
Day one of a two day conference of the Computer Law Association (CLA) titled "Managing the Global Digital Information Technology Explosion." The price is $550.00 for CLA members and $650.00 for non-members. See, schedule and registration form [PDF]. Location: The Monarch Hotel, Washington DC.
Deadline to submit comments to the NTIA regarding "the advantages accorded signatories of the INTELSAT, in terms of immunities, market access, or otherwise, in the countries or regions served by INTELSAT, the reason for such advantages, and an assessment of progress toward fulfilling a pro- competitive privatization of that organization." See, notice in the Federal Register, April 3, 2001, Vol. 66, No. 64, Notices, at Pages 17686 - 17687. See also, copy of notice in NTIA web site.
8:30 AM - 5:00 PM. The National Science Foundation's Special Emphasis Panel in Advanced Computational Infrastructure and Research will hold the first of two days of closed meetings to review Distributed Terascale Facility (DTF) proposals for financial support. Location: Hyatt Reston, 1800 Presidents Street, Reston, VA. See, notice in Federal Register, April 20, 2001, Vol. 66, No. 77, at Page 20337 - 20338.
9:30 AM. The Senate Commerce Committee will hold a meeting to vote on several bills and nominations. The Committee may vote on the Charles James nomination to be Assistant Attorney General for the Antitrust Division. Location: Room 253, Russell Building.
12:00 NOON - 2:00 PM. The American Enterprise Institute will host a panel discussion titled "Challenges Facing China's Market Reforms." The speakers will be John Langlois (Princeton), Nicholas Lardy (Brookings Institution), and Edward Steinfeld (MIT Sloan School of Management). For more information, contact Joanna Yu at 202-862-5806. Location: Wohlstetter Conference Center, Twelfth Floor, AEI, 1150 Seventeenth Street, NW, Washington, DC.
12:30 PM. FTC Commissioner Sheila Anthony will give a speech to the 1st Annual Privacy and Data Security Summit on "The Leading Forum on Confidentiality, Security, Regulatory Requirements & Technical Tools." Location: Crystal Gateway Marriott Hotel, Arlington, VA.
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