Tech Law Journal Daily E-Mail Alert
July 11, 2001, 9:00 AM ET, Alert No. 224.
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Bush Picks Bybee for OLC
7/10. President Bush announced his intent to nominate Jay Bybee to be Assistant Attorney General for the Office of Legal Counsel (OLC). Other former heads of the OLC include Chief Justice William Rehnquist, Justice Antonin Scalia, former Attorney General William Barr, and 4th Circuit Judge Mike Luttig.
Bybee is a professor at the University of Nevada Law School. Prior to that he was a professor at Louisiana State University Law School from 1991 to 1998. He was an Associate Counsel to former President Bush. Prior to that he worked at the Department of Justice in the Office of Legal Policy and then in the Civil Division. And before that he was an associate in Washington DC law firm of Sidley & Austin. See, White House release and UNLV bio.
Walker to Leave SEC
7/10. Richard Walker, Director of the Division of Enforcement at the SEC, announced that he will leave the SEC and return to the private sector. He has not yet accepted a new position. See, SEC release. During his tenure, the Enforcement Division created an Office of Internet Enforcement and began the SEC's efforts against online securities fraud.
More People and Appointments
7/10. President Bush announced his intent to nominate Mark Olson to be a Member of the Board of Governors of the Federal Reserve System, for the remainder of a 14 year term expiring January 31, 2010. He was previously Staff Director of the Securities Subcommittee for the Senate Banking Committee. See, release.
7/10. President Bush nominated Harvey Pitt to be a Member of the SEC for a term expiring June 5, 2005. He will replace Isaac Hunt. See, release.
7/10. President Bush nominated Michael Melloy to be a U.S. Circuit Judge for the Eighth Circuit. See. release.
7/10. Senate Democrats announced new additions to committees to reflect the Democratic control of the Senate following Sen. Jim Jeffords' (VT) switch. Sen. John Edwards (D-NC) was added to the Senate Judiciary Committee. Also, Sen. Bill Nelson (D-FL) was added to the Senate Commerce Committee.
Trade Subcommittee Holds Hearing on China Trade
7/10. The House Ways and Means Committee's Subcommittee on Trade held a hearing on renewal of Normal Trade Relations with the People's Republic of China. Rep. Philip Crane (R-IL), Chairman of the Subcommittee, said in his prepared statement that "we must keep the momentum moving forward toward our common goal of integrating China into the international system of rules and standards. It is my judgment that, after 15 years, we are almost there. ... slapping China through revocation of NTR will not bring about the changes that we all seek in China."
See also, prepared statements of witnesses: Rep. Frank Wolf (R-VA), Nancy Pelosi (D-CA), Rep. Dana Rohrabacher (R-CA), Rep. Earl Blumenauer (D-OR), Jeffrey Bader (Assistant USTR China, Hong Kong, Mongolia, and Taiwan), Bob Stallman (American Farm Bureau Federation), Gary Benanav (New York Life), Robert Kapp (U.S. China Business Council), and Calman Cohen (Emergency Committee for American Trade).
GAO Reports Information Security Weaknesses at Interior Dept.
7/10. The GAO released a study [PDF] titled "Information  Security: Weak Controls Place Interior's Financial and Other Data at Risk." The GAO examined "information system general controls over the financial systems maintained by the Department of the Interior at its National Business Center (NBC) in Denver, CO." It concluded that "weaknesses were identified in NBC-Denver’s information system control environment. Specifically, NBC-Denver had not adequately limited users access, controlled system software, secured network access, or established a program to comprehensively monitor access. Also, NBC-Denver was not providing adequate physical security, segregating computer functions, controlling changes to application programs, or ensuring that all aspects of its service continuity needs were addressed. These weaknesses placed sensitive NBC-Denver financial and personnel information at risk of disclosure, critical financial operations at risk of disruption, and assets at risk of loss."
Powell Meets with CLEC CEOs
7/10. FCC Chairman Michael Powell met with the CEOs of a dozen competitive local exchange carriers (CLECs). See, FCC release. The agenda included "what has worked and what has not worked in terms of CLEC market entry; what issues relate to the successes or failures of CLEC access to capital markets;  to what extent CLEC success or failure can be attributed to business/market decisions as compared to policy/regulatory decisions; what is necessary for the CLEC industry to succeed; are there any technological limitations that pose challenges to the success of the CLEC industry; and what, if anything, can the FCC do, consistent with the law and principled economics, to support local communications competition beyond what it has already done."
Computerized Voting Systems
7/10. The FEC published a notice in the Federal Register that it requests comments on proposed revisions to the 1990 national voluntary performance standards for computerized voting systems. Comments are due by September 10, 2001. See, Federal Register, July 10, 2001, Vol. 66, No. 132, at Pages 35978 - 35980.
SEC Files Complaint Against PacketSwitch
7/10. The SEC announced that it filed a civil complaint in U.S. District Court (NDCal) against Packet Switch and its principal, Steven Ristau, alleging violation of federal securities laws in connection with the sale of securities in a corporation set up to develop a wireless Internet technology by which movies could be viewed via the Internet. The complaint alleges that the defendants misrepresented that they had a new technology that allowed it to broadcast movies wirelessly over the Internet, and that they had or were in the process of obtaining patents. The complaint alleges violation of §§ 5 and 17(a) of the Securities Act of 1933 and § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against Ristau and Packet Switch. It also alleges violation of § 15(a) of the Exchange Act (broker dealer registration) against Ristau. See, release.
Markle Foundation Advocates Internet Regulation
7/10. The Markle Foundation released a report [3.86 MB in PDF] based on public opinion polls and focus groups studies titled "Toward a Framework for Internet Accountability" at events at the National Press Club and on Capitol Hill. The report advocates taxing sales over the Internet, and regulation of the Internet. See also, Markle release.
The poll was conducted by Greenberg Quinlan & Rosner. Stan Greenberg, who was a pollster for Bill Clinton, and Zoe Baird, President of the Markle Foundation, presented the report. It is a massive 108 pages, packed with tables, bar charts, and thermometers depicting responses to poll questions. It is part study, and part advocacy. The questions were selected and worded to provide support for the policy objectives of the authors.
Among the major conclusions of the report are that a majority of the American public believe that "the government should develop rules to protect people when they are on the Internet", that "Businesses and people on the Internet can't be trusted to regulate themselves", that companies should have opt-in privacy policies, and that e-commerce should be taxed.
Other than regulation in general, and privacy and taxes in particular, the report reveals little about public attitudes about many other current Internet public policy issues. For example, the poll asked individuals to rate their concerns about the Internet, from a list provided by the pollster. The list included Internet pormography, privacy, hacking, and other topics. However, respondents were not given the option of naming spam. Nor did this question, or any other question contained in the report, address antitrust issues (such as Microsoft's conduct), or intellectual property issues (such as peer to peer music file copying). Nor does the Markle report examine public attitudes about the "digital divide" or promoting broadband access (such as with the Tauzin Dingell bill).
Privacy. The report states by 64% to 32% the public favors the government developing new rules for the Internet. Then, on the next page, the report states that the public favors opt-in to opt-out privacy practices by 58% to 37%. The wording of this question did not reference the government mandating privacy practices.
Taxes. The report contains poll results on taxing Internet commerce. It found that 60% of respondents answered affirmatively to the statement, "On-line commerce should be subject to the same taxes as other commerce, so that Internet businesses do not have an artificial advantage over other businesses." The report contains no questions regarding bans on multiple taxes, discriminatory taxes, or taxes on Internet access, which are the subject of the current tax moratorium, as well as the legislation that is likely to pass later this year extending the moratorium.
Filtering. When the pollsters asked respondents to name their concerns about the Internet, "pormagraphy and violence on the Internet" was named most (49%). "Protecting children on the Internet" came in second (46%). "Privacy of information on the Internet" was third (34%). The report presents follow up questions on privacy. The report contains no follow up questions on pormagraphy or protecting children. There is no question in the report regarding whether respondents favor mandating the use of filtering by schools and libraries, or protecting children from material on the Internet that is harmful to minors. Also, while the report touts the statistic that 64% favor government rules, the report does not explore what kinds of rules the public wants -- i.e., privacy rules, filtering rules, spam rules, or what.
Lessig Condemns Congress and Courts on Intellectual Property
7/10. Lawrence Lessig, a professor at Stanford Law School, participated in a panel discussion on the Markle Report at the Capitol Hill event. He did not discuss the report. Instead, he offered his analysis of intellectual property on the Internet, discrimination in Internet architecture, and other issues not addressed by the Markle report.
Copyright. Lessig stated that "if we focus now on what have the priorities of the government been, both the legislative and judicial priorities, it, of course, has been the priorities of Hillary Rosen and Jack Valenti, and not the priorities of the American people." He continued that "Privacy is an extremely important issue. The legislative response has been, 'Well, let's go slow. Let's let the market take care of itself.' " In contrast, "the legislative response has been to radically increase the legislative support for the protection of copyrights. The same thing in the context of the judiciary branch. In context of the number one priority of protecting children from access to pormography in cyberspace, the judicial response has been, 'We have got to go slow; we have got to make sure that any regulations are actually effective, and we don't harm free speech in cyberspace.' In the context of copyright, the courts' response has been 'Let's go as quickly as we can to make sure that we stop all violations of copyright in cyberspace.' " (Hillary Rosen is P/CEO of the Recording Industry Association of America; Jack Valenti is P/CEO of the Motion Picture Association of America.)
Code. Lessig also reiterated the thesis of his book, Code and other Laws of Cyberspace. He stated that "the significant issue about governance in cyberspace is the way in which the architecture matters. The architecture of cyberspace is the space where rules are set. And it is a pathetic, incomplete analysis that most of us have about cyberspace to think that it is really about what legislators say. The real legislators are the code writers."
Discriminatory Internet Architecture. Lessig also lamented that the Internet is becoming less of a neutral platform. He stated that "the Internet is a library because its architecture is neutral. It is a neutral platform. ... Barnes and Noble is not a library. Cable companies are not a libraries. The problem with the emerging architecture of cyberspace is that the architecture itself is becoming a platform where discrimination is enabled. The generation of broadband technologies is the generation where the owners of the platform, the cable companies, will have the rights, and in Broward County, a First Amendment right, to discriminate in the kind of content ... ." (See, District Court opinion in Comcast v. Broward County.)
Fed Circuit Rules in Patent Case
7/10. The U.S. Court of Appeals (FedCir) issued its opinion in Door Master v. Yorktowne, a patent infringement case involving cabinet door design. The Appeals Court held that the District Court correctly declined to enter judgment as a matter of law, thereby allowing the jury's findings of validity and infringement to stand. Also, the District Court did not abuse its discretion in declining to award attorney fees. Affirmed.
Davis and Moran Reintroduce Cyber Security Bill
7/10. Rep. Tom Davis (R-VA) and Rep. Jim Moran (D-VA) introduced the Cyber Security Information Act of 2001. They also sponsored similar legislation in the 106th Congress. The bill is intended to give critical infrastructure industries incentives to share information in order to fight cyber threats. Rep. Davis stated that "Many in the private sector have expressed strong support for information sharing models, but have also expressed concerns about voluntarily sharing information with the government and the unintended consequences they could face for acting in good faith. There has been concern, for example, that industry could potentially face antitrust violations for sharing information with other industry partners; have their shared information be subject to the Freedom of Information Act; or face potential liability concerns for information shared in good faith. This bill addresses all of those concerns." See, Davis release.
Industry groups praised the bill. See, release of the Information Technology Association of America, and release of the Chamber of Commerce.
Wednesday, July 11
9:30 AM. The Senate Governmental Affairs Committee will hold a hearings on S 803, a bill to establish a Federal Chief Information Officer within the Office of Management and Budget. Location: Room 342, Dirksen Building.
9:30 AM. The Senate Commerce Committee will hold a hearing on Internet privacy issues. The scheduled witnesses are Marc Rotenberg (EPIC), Paul Misener (, Fred Cate (Indiana University School of Law), Hans Brondmo, Paul Schwartz (Brooklyn Law School), Les Seagraves (Earthlink), Ira Rubinstein (Microsoft), and Erik Olbetter (Schwab Capital Markets). Location: Room 253, Russell Building.
10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will meet to mark up S 487, the Technology, Education, and Copyright Harmonization (TEACH) Act of 2001. Location: Room 2141, Rayburn House Office Building.
10:15 AM. The House International Relations Committee will hold its third hearing on S 149, The Export Administration Act. Sen. Mike Enzi (R-WY) will testify. Location: Room 2172, Rayburn Building.
10:30 AM. The House Science Committee's Subcommittee on 21st Century Competitiveness will meet to mark up HR 1992, the "Internet Equity and Education Act of 2001." Location: Room 2175, Rayburn House Office Building.
12:00 NOON. The House Commerce Committee's Subcommittee on Commerce, Trade and Consumer Protection will hold a hearing titled "The Potential for Discrimination in Health Insurance Based on Predictive Genetic Tests." Location: Room 2322, Rayburn House Office Building.
2:00 PM. The Hispanic Council on International Affairs, the U.S. Hispanic Chamber of Commerce, the Latin American Management Association and the U.S. Mexican Chamber of Commerce will hold a press conference to announce their support for trade promotion authority (formerly known as fast track) and the free trade area of the Americas. For more information, contact Peter Hickman at 301-530-1210. Location: National Press Club, Holeman Lounge, 529 14th St. NW, 13th Floor, Washington DC.
Thursday, July 12
9:30 AM. The Federal Communications Commission will hold a meeting to announce decisions in several matters, including a Fourth Report and Order concerning the collocation obligations of incumbent local exchange carriers. (See, Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket No. 98-147). Location: FCC, Portals II, 445 12th Street, SW, Room TW-C305.
10:00 AM. The Senate Banking Committee will hold a hearing on several pending nominations, and vote on several other nominations. The agenda includes votes on the nominations of Roger Ferguson to be a member of the Board of Governors of the Federal Reserve System, Donald E. Powell to be Chairman of the FDIC, and Donald Rosenfeld to be President of the Government National Mortgage Association. Location: Room 538, Dirksen Building.
10:00 AM - 12:00 NOON. The American Enterprise Institute (AEI) will host a panel discussion titled Broadband Access - Competition, Regulation, and Consumer Welfare. The speakers will be Harold Furchtgott-Roth, James Glassman, Thomas Hazlett, and Christopher DeMuth. See, online registration page. Location: AEI, 1150 17th Street, NW, Washington DC.
11:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold a hearing titled The Whois Database: Privacy and Intellectual Property Issues. Location: Room 2141, Rayburn Building.
1:45 PM. The House Ways and Means Committee will meet to mark up following:
 • HJRes 50, disapproving the extension of the waiver authority contained in § 402(c) of the Trade Act of 1974 with respect to the People's Republic of China.
 • HJRes 55, disapproving the extension of the waiver authority contained in § 402(c) of the Trade Act of 1974 with respect to Vietnam.
 • HR 1954, the ILSA Extension Act of 2001.
Location: Room 1100, Longworth Building.
2:00 PM. The House Financial Service Committee's Oversight and Investigations Subcommittee will hold a hearing on Internet gambling. See, release. The scheduled witnesses are John Suarez (New Jersey Division of Gaming Enforcement), Sebastian Sinclair (Christiansen Capital Advisors), Keith Whyte (National Council on Problem Gambling), Valerie Lorenz (Compulsive Gambling Center), Frank Fahrenkopf (American Gaming Association), Bill Saum (National Collegiate Athletic Association), Mark MacCarthy (VISA), Sue Schneider (Interactive Gaming Council), Penelope Kyle (Virginia Lottery), Greg Avioli (National Thoroughbred Racing Association). Location: Room 2128, Rayburn Building.
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