Tech Law Journal Daily E-Mail Alert
May 24, 2001, 8:00 AM ET, Alert No. 194.
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R&D Tax Credit
5/23. The Senate approved the Restoring Earnings to Lift Individuals and Empower Families (RELIEF) Act of 2001, the $1.35 trillion tax cut compromise bill, by a vote of 62 to 38. Several amendments were adopted, including one offered by Sen. Orrin Hatch (R-UT) which makes permanent the research and development tax credit, and increases the increases alternative incremental credit.
Export Administration Act
5/23. The House International Relations Committee held a hearing on the Export Administration Act. Rep. Henry Hyde (R-IL), Chairman of the Committee, said in his opening statement that "the Commerce Department has in place a series of regulations providing for the control and monitoring of the export of sensitive commodities, including high performance computers, software, machine tools and other items." Sen. Mike Enzi (R-WY) introduced S 149, the Export Administration Act, in the Senate on January 23. It was amended and approved by the Senate Banking Committee on March 22 by a vote of 19 to 1. It eases restraints on the export of most dual use products, such as computers and software. Rep. Hyde added that in light of S 149's "significance to our economic and national security interests, we will give this legislation all the time and attention it deserves ensuring that it receives a thorough review and vetting." Kenneth Juster, the recently confirmed Under Secretary for Export Administration, testified at the hearing. He stated in his prepared testimony that the Bush administration supports S 149.
Privacy News
5/23. The House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing titled "How Secure Is Private Medical Information? A Review of Computer Security at the Health Care Financing Administration and Its Medicare Contractors." See, prepared testimony of witnesses: John Van Walker and Jared Adair (Health Care Financing Administration), Joseph Vengrin and Ed Meyers (Department of Health and Human Services), and Michael Neuman (En Garde Systems, Inc.).
5/23. The FTC announced that TRUSTe, an Internet privacy seal program, has been approved as a "safe harbor" program under the terms of the Children's Online Privacy Protection Act (COPPA). See, FTC letter to TRUSTe and FTC release.
FCC E-Rate Rules
5/23. Wednesday, May 23 was the deadline to file comments with the FCC in response to its Notice of Proposed Rulemaking (NPRM) regarding revisions to the method of subsidizing schools and libraries under its e-rate program. The FCC's e-rate program subsidizes schools' and libraries' expenses for telecommunications, Internet access, and internal connections. The FCC has set the total subsidy level at $2.25 Billion per year. The total annual requests for these free subsidies now exceeds $2.25 Billion. The FCC published 13 comments received on May 23 in in web site. See, for example, comments submitted by Qwest, WorldCom, NY Public Library, American Library Association. (The NPRM is published at Federal Register, May 8, 2001, Vol. 66, No. 89, at Pages 23204 - 23208.)
Online Fraud and Crime
5/23. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection held a hearing titled On-line Fraud and Crime: Are Consumers Safe? See, prepared testimony of witnesses: Bruce Swartz (Criminal Division, DOJ), Thomas Kubic (FBI), Eileen Harrington (FTC), Bruce Townsend (Secret Service), Scott Charney (Price Waterhouse Coopers), Susan Grant (National Consumers League), and Mark MacCarthy (Visa USA).
5/23. The FBI, Department of Justice, and the National White Collar Crime Center announced that criminal charges have been brought against approximately 90 individuals and companies as part of a nationwide series of investigations into Internet fraud, code named "Operation Cyber Loss". See, FBI release.
5/23. The U.S. Attorneys Office (SDCal) unsealed an indictment returned by a grand jury of the U.S. District Court (SDCal) against 20 individuals charging wire fraud, mail fraud, securities fraud, and other crimes, in connection with an operation that designed, developed and marketed of a series of high tech and telecom related securities which were not registered and which were fraudulently described to investors as general partnerships. See, USAO release.
House Judiciary Committee Adopts Anti Spam Bill
5/23. The House Judiciary Committee amended and approved HR 718, an anti spam bill, on a voice vote, after a day long mark up session. Rep. Heather Wilson (R-NM) and Rep. Gene Green (D-TX) introduced the bill on February 14. The House Commerce Committee approved an amended version on April 4. The two Committees' versions are now substantially different. See, Commerce Committee version adopted on April 4; see also, Judiciary Committee's amendment in the nature of a substitute, Goodlatte amendment, and Hart amendment, which were all adopted by the Judiciary Committee on May 23.
The Commerce Committee version would criminalize sending unsolicited commercial e-mail (UCE) to someone who has asked to be removed from a distribution list. The bill would also require UCE to be labeled as such. It would also give individuals and ISPs separate causes of action for violation of the act; and, it would give civil enforcement authority to FTC, and a parens patriae cause of action to the states. The Judiciary Committee version eliminates any authority or cause of action for the FTC, states, or individuals. It would criminalize sending UCE with false header information, give a private right of action to ISPs to recover actual or statutory damages for sending UCE with false header information, and require that e-mail that contains contains sexually oriented advertisements to be labeled as such.
5/23. Rep. James Sensenbrenner (R-WI), the Chairman of the Judiciary Committee, stated that the "Wilson bill utilizes almost every legal enforcement tool know to lawyers to regulate and to litigate issues relating to unsolicited commercial e-mail. These provisions are disproportionate to the harm or damage caused by spam." He also stated that he is "skeptical of the regulation of online commerce, including e-mail marketing." He offered an amendment in the nature of a substitute to HR 718 as reported by the Commerce Committee. He then described it: "the substitute would create new misdemeanor criminal provision to address the issue of technical fraud. Technical fraud includes forging or falsifying header and return information, thereby concealing the sender's identity. Those who send fraudulent e-mail or pormography often use technical fraud to conceal their true identities. Furthermore, technical fraud is used to defeat Internet service providers' and computer users' e-mail filters, preferences, and other technologies designed to block unwanted e-mail."
Rep. Zoe Lofgren (D-CA), who supported the Chairman's amendment in the nature of a substitute, stated that "my desire is to legislate as little as possible where the Internet is concerned." She added that recipients of spam already have a remedy: "hit the delete button."
Rep. Rick Boucher (D-VA) elaborated on criminalizing false header information: "the Internet service providers have now begun to use software that can detect large volumes of e-mail that originate from a common source simultaneously. And the software used by the ISP correctly interprets that e-mail to be spam. And so, that filter employed by the ISP is sufficient to keep that spam from reaching the recipient. What the spammers have now started to do in order to defeat that software is change in each of the items of e-mail that goes out, and each of the items of the spam that is sent, a little bit of the header information. The origination information may be altered in each subsequent message. ... And what the legislation ... would help to implement, is a means of criminalizing the way in which spammers are now defeating the ISPs software, because it would say that you cannot falsify any of the header information."
Rep. Bob Goodlatte (R-VA) offered an amendment to the amendment in the nature of a substitute to add a cause of action for Internet service providers. It was approved. Rep. Melissa Hart (R-PA) offered an amendment to the amendment in the nature of a substitute to require the labeling of e-mail that includes "sexually oriented advertisements." Several members stated that it would be held unconstitutional as a violation of the First Amendment. Rep. Hart argued that is contains the same language as a provision regulating U.S. Postal Service mail, which has been upheld by the courts. Her amendment was approved on a voice vote.
The Committee also rejected a pair of amendments that would have created a private right of action for recipients of UCE. The Committee also rejected an amendment offered by Rep. Schiff that would have required UCE to be labeled as such. The Committee then approved the amendment in the nature of a substitute, as amended by the Goodlatte and Hart amendments. It then reported HR 718, as so amended.
The bill may now proceed to the House floor, via the Rules Committee, which might work with members of the Commerce and Judiciary Committees to produce a compromise version. Last year, the House overwhelmingly passed an earlier version of Rep. Wilson's anti spam bill. HR 3113 (106th Congress) was passed by the House on July 18, 2000, by a vote of 427 to 1; but it was not acted upon by the Senate.
E-Mail Address Harvesting
5/23. Rep. Chris Cannon (R-UT) offered an amendment to the SPAM bill that would have banned the harvesting of e-mail addresses from web sites for the purpose of sending UCE to those addresses. Rep. Sensenbrenner stated that this was "not the proper time and place to offer this amendment." He stated that it "prejudices the database and privacy debates." Rep. Sensenbrenner promised to work on this issue with Rep. Cannon, who then withdrew his amendment.
9:30 AM. The Senate Commerce Committee will hold a mark up session. The agenda includes votes on pending nomination to the FCC (Michael Powell, Michael Copps, Kevin Martin, and Kathleen Abernathy), the FTC (Timothy Muris), and the Department of Commerce (Bruce Mehlman, Kathleen Cooper, and Mari Cino). Location: Room 253, Russell Building.
10:00 AM - 12:00 NOON. The FCC's Advisory Committee for the 2003 World Radiocommunication Conference will hold its a meeting. Location: FCC, Portals II, Room TW-C305 (Commission Meeting Room), Washington DC.
10:30 AM. The House Judiciary Committee's Crime Subcommittee will hold an oversight hearing titled Fighting Cyber Crime: Efforts by State and Local Officials. Location: Room 2237, Rayburn Building.
2:00 PM. The Senate Judiciary Committee has scheduled a hearing on competition in the pharmaceutical marketplace, focusing on the antitrust implications of patent settlements. Location: Room 226, Dirksen Building.
Friday, May 25
Deadline to file reply comments with the FCC in response to its request for comments regarding the cable ownership limits imposed upon AT&T by the FCC in its AT&T Time Warner merger review proceeding, in light of the March 2, 2001, opinion of the U.S. Court of Appeals in Time Warner v. FCC, 249 F.3d 1126 (D.C. Cir. 2001). (CS Docket No. 99-251.) See, FCC notice.
Deadline to file comments with the SEC in response to its web based survey concerning investor use of electronic media in making investment decisions. See original notice setting deadline of July 1, and May 21 notice moving the deadline up to May 25.
People and Appointments
5/23. FCC Commissioner Harold Furchtgott- Roth announced that, after leaving the FCC, he will join the American Enterprise Institute (AEI) as a visiting fellow. At AEI, he will write a book on telecommunications policy. See, FCC release.
5/23. Sarah Whitesell will become the Associate Chief of the FCC's Cable Services Bureau, effective June 21, 2001. She is currently a legal advisor to FCC Commissioner Gloria Tristani. Before joining the FCC she was an associate at the law firm of Wilmer Cutler & Pickering. See, release.
5/23. FCC Commissioner Gloria Tristani announced several changes to her personal staff. Senior Legal Advisor William Friedman and Legal Advisor Sarah Whitesell will depart in June. Former advisors Paul Gallant and Deena Shetler will rejoin Tristani's staff. Gallant will be Legal Advisor for mass media and cable issues, and Shetler will be Legal Advisor for common carrier issues. Adam Krinsky, who covers wireless and international issues, will be Senior Legal Advisor. See, release.
5/23. President Bush announced his intent to nominate William Riley to serve as a Judge on the United States Court of Appeals for the Eighth Circuit. See, release.
5/23. The House Judiciary Committee added Rep. Adam Schiff (D-CA) and Rep. Anthony Weiner (D-NY) to the membership of the Subcommittee on Courts, Internet and Intellectual Property. Rep. Weiner also left the Subcommittee on Crime.
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