|FEC Adopts NPRM Regarding
Political Activity on the Internet
|9/27. The Federal Election
Commission (FEC) approved a Notice of
Proposed Rulemaking (NPRM) [PDF] at its September 27
meeting regarding political activity on the Internet. The FEC
is the agency charged with enforcing the Federal Election
Campaign Act (FECA), which regulates political contributions
and expenditures. While the FEC had previously considered wide
ranging regulation of political speech on the Internet, this
NPRM merely proposes to permit certain personal political web
sites, and to allow corporations and unions to put certain
hyperlinks and press releases in their web sites.
This NPRM proposes three rule changes. First, it would provide
that there would be no contribution or expenditure within the
meaning of the FECA when individual, without receiving
compensation, uses his or her own computer equipment,
software, Internet services or domain names to attempt to
influence a federal election. Second, it would allow
corporations and unions to include hyperlinks to the web sites
of candidates and political committees. Third, it would allow
corporations and unions to publish in their web sites copies
of press releases endorsing candidates.
Notice of Inquiry. This NPRM is a part on an ongoing
process at the FEC that began years ago, and will likely
continue for some time. On November 1, 1999, the FEC issued a Notice
of Inquiry (NOI) regarding campaign activity and the
Internet. That NOI revealed that the FEC was considering
treating common activities such as email and hyperlinking as
political contributions or expenditures under the FECA, and
hence subject to FEC regulation, reporting requirements,
and/or contribution limits. See, TLJ story, FEC
to Review Campaign Activity on the Internet, November 8,
Response to NOI. The FEC received about 1,300 comments
in response to its NOI. Almost all were critical of the FEC
for considering regulation of the Internet or freedom of
speech. See, TLJ story, Citizens
Urge FEC to Stay Away from the Internet, January 12, 2000.
Zach Exley. One of the events which preceded the FEC's
NOI was the filing of a complaint with the FEC regarding a
personal web site operated by Zach Exley. Benjamin
Ginsburg, an elections lawyer with the law firm of Patton Boggs,
who was also affiliated with the George Bush presidential
campaign, filed a complaint
with the FEC on May 4, 1999. The complaint alleged that Zach
Exley's anti-Bush web site violated various technical rules
governing campaign money in federal elections. In particular,
he alleged that Exley violated the FECA by failing to file
campaign expenditure reports. Zach Exley's web site was
parodic, defamatory, immature, low budget, and highly critical
of George Bush. After receiving public comment in response to
its NOI, the FEC determined to take no action against Exley.
It released a letter
to Exley, and an FEC
narrative, on or about April 14, which stated that the FEC
would take "no action" against him. See, TLJ story, FEC
Takes No Action Against Anti Bush Web Site, April 20,
NPRM. The FEC's latest action, its NPRM, is limited in
scope. Moreover, it focuses on defining activities that are
permissible under the FECA, rather than proscribing conduct.
However, while the rule changes proposed in this NPRM are
narrow, the FEC cautioned that it "may take additional
action on some or all of the other issues raised in the NOI at
a later time." The 32 page NPRM reviews the comments
which it received in response to its NOI, and lists and
discusses three proposed changes to the FEC regulations.
Personal Web Sites. First, the NPRM states that the FEC
"is proposing to add a new section 117.1, which would
describe certain types of individual Internet activities that
would not be treated as contributions or expenditures. Section
117.19(a) would contain an exception from the definition of
"contribution" in section 100.7(a) of the current
regulations. Section 117.1(b) would contain a parallel
exception from the expenditure definitions in sections
100.8(a) and 109.1. Proposed sections 117.1(a) and (b) would
state that no contribution or expenditure results where an
individual, without receiving compensation, uses computer
equipment, software, Internet services or Internet domain
name(s) that he or she personally owns to engage in Internet
activity for the purpose of influencing any election to
Corporate and Union Hyperlinks. Second, the NPRM states
"New section 117.2 would state that the establishment and
maintenance of a hyperlink from the web site of a corporation
or labor organization to the web site of a candidate or party
committee for no charge or for a nominal charge would not be a
contribution or expenditure ..." However, there are also
limitations on this rule.
Corporate and Union Press Releases. Third, the NPRM
states that "a corporation or labor organization may make
a press release announcing a candidate endorsement available
to the general public on its web site ..." However, to
qualify, the corporation or union must regularly publish press
releases in its web site, the release must be limited to the
announcement of the endorsement and the reasons, the release
must be made available in the same manner as other releases,
and the cost must be de minimis.
The FEC adopted the NPRM by a vote of 6-0. The FEC also
requests public comments on its proposed rule changes.
Comments are due within 60 of publication of a notice in the
Federal Register, which has not yet occurred. Also, the FECA
and this NPRM only pertain to federal law. This NPRM does not
affect state laws pertaining to state and local elections.
|Federal Circuit Rules in
Dow v. AVI
|9/28. The U.S.
Court of Appeals (FedCir) issued its opinion
Chemical v. Astro-Valcour, a patent
infringement case. The patents
in suit involve processes for the production of
polyethylene sheet foam. The issue on appeal was whether, when
challenging the validity of a patent under 35 U.S.C.
§ 102(g), a prior inventor must have known that he was an
inventor. The Appeals Court held that such a state of mind is
not required. Affirmed.
|Patent Fees Increase on
|9/28. The USPTO
released a statement
regarding the new patent fees which take effect October 1,
2001. Fees are being increased to reflect changes in the
Consumer Price Index over the last twelve months.
|Antitrust Division v.
|9/27. The Department of
Justice filed a civil complaint in U.S. District Court
against Computer Associates
(CA) in connection with its 1999 acquisition of Platinum
Technologies International. CA SVP and General Counsel Steven
Woghin stated in a release
that "From the moment we announced our intention to
acquire Platinum until the DOJ approved the transaction, CA
acted reasonably and lawfully ... We have been cooperating
fully with the DOJ for the past two and-a-half years, and we
are extremely disappointed by their actions today."
|Anti Terrorism Bill
|9/29. President Bush used his weekly radio address on
Saturday to advocate quick passage of the Anti
Terrorism Act of 2001 [PDF]. He stated, "I'm asking
Congress for new law enforcement authority, to better track
the communications of terrorists, and to detain suspected
terrorists until the moment they are deported. I will
also seek more funding and better technology for our country's
intelligence community." See, transcript.
The bill would expand the authority of law enforcement
agencies to conduct surveillance of phone and Internet
communications, among other things. House and Senate members,
their staff, federal agency officials, and interest groups
have been negotiating revisions to the bill for over a week.
The House Judiciary
Committee is likely to mark up the bill on either
Wednesday or Thursday. Sen.
Patrick Leahy (D-VT), Chairman of the Senate Judiciary
Committee, may delay the bill even longer.
|Bush Signs U.S. Jordan FTA
|9/28. President Bush signed HR
2603, a bill implementing the U.S.
Jordan Free Trade Agreement (FTA) [PDF]. See, White
This FTA is significant for Middle Eastern politics. In
addition, Jordan is only the fourth country to sign a FTA with
the U.S. This document also contains some potentially trend
setting provisions pertaining to intellectual property rights
(IPR) and electronic commerce. It addresses patents,
trademarks, copyright, and enforcement of IPR. Jordan agreed
to ratify and implement the WIPO's
Copyright Treaty and WIPO Performances and Phonograms Treaty
within two years. The FTA also provides that "each Party
shall seek to refrain from: (a) deviating from its existing
practice of not imposing customs duties on electronic
transmissions; (b) imposing unnecessary barriers on electronic
transmissions, including digitized products; and (c) impeding
the supply through electronic means of services ..."
The Senate passed the bill by a voice vote on September 24.
The House passed the bill on July 31. The FTA was negotiated
by the Clinton Administration last year.
|Kotelly Sets Schedule for
Remedy Proceeding in Microsoft Case
|9/28. The U.S.
District Court (DDC), Judge Colleen Kotelly presiding,
held a status hearing in the Microsoft antitrust case. The
Court also issued its Scheduling
|9/28. Excite@Home (ATHM) filed a Chapter 11 petition for
bankruptcy in the U.S. Bankruptcy Court
(NDCal). See, ATHM
release. In addition, it stated that "it has agreed
to sell essentially all of its broadband Internet access
business assets and related services to AT&T for $307
million in cash".
|AOLTW Seeks FTC Approval of
Alternative Cable Broadband ISPs
|9/26. AOL Time Warner submitted to the FTC's
Bureau of Competition a motion titled "Motion for
Approval of Non Affiliated ISP and Alternative Cable Broadband
ISP Service Agreement". AOLTW is required, pursuant to
¶ II.A.2 of the FTC's Decision and
Order [PDF] approving the merger of AOL and Time Warner,
dated April 17, 2001, to enter into such agreements, and to
obtain FTC approval. The FTC published a redacted
version of the motion [PDF] in its web site. This motion
seeks FTC approval of its agreement with Internet Junction Corp., a
regional ISP based in Florida.
9/24. AOL Time Warner also submitted a second redacted
motion [PDF] seeking approval of its agreement with New York Connect.Net, Ltd., a
regional ISP based in New York City.
¶ II.A.2. provides: "Within ninety (90) days after
the date that Respondents make Available to any Subscriber an
Affiliated Cable Broadband ISP Service, Respondents shall
enter into Alternative Cable Broadband ISP Service Agreements
that have received the prior approval of the Commission with
at least two (2) Nonaffiliated ISPs (other than the
Non-affiliated ISP that is party to the Alternative Cable
Broadband ISP Service Agreement approved by the Commission
pursuant to ¶ II.A.1. of this Order in that Identified
Cable Division) that have received the prior approval of the
Commission to make Available additional Non- affiliated Cable
Broadband ISP Services to Subscribers in that Identified Cable
The deadline to submit public comments to the FTC on these two
motions is October 24, 2001.
|GAO Reports that Agencies
Will Not Comply with GPEA
|9/28. The GAO
released a report
[41 pages in PDF] titled "Electronic Government: Better
Information Needed on Agencies' Implementation of the
Government Paperwork Elimination Act". The GPEA, which
became law in 1998, requires that by October 21, 2003, federal
agencies provide the public, when practicable, with the option
of submitting, maintaining, and disclosing required
information electronically, instead of on paper. The report
finds that "many agencies may be at risk of not meeting
GPEA objectives." The report was prepared for Sen. Joe Lieberman
(D-CT), Chairman of the Senate Committee on
|Internet Tax News
|9/28. Sen. George Allen
(R-VA) sent a "Dear Colleague letter" to members of
the Senate urging passage of legislation to extend the
existing moratorium on certain Internet taxes, which is set to
expire on October 21. Sen. Allen is the sponsor of S 777,
a bill that would make the existing moratorium permanent. See
release. See also, HR
1675 (permanent moratorium) and HR
1552 (five year extension), both sponsored by Rep. Chris Cox (R-CA).
This is one of many issues that was sidetracked by the events
of September 11. The House
Judiciary Committee had scheduled a hearing on HR
2526, the "Internet Tax Fairness Act of 2001",
for the morning of September 11.
9/28. The Progress and Freedom
Foundation (PFF) issued a paper
[PDF] titled "The Internet, Taxation, and the
Constitution". The paper concludes that "there are
constitutionally permissible methods for taxing the
Internet." However, it also concludes that there are
"constitutional means available to Congress to prevent
further taxation, and even to roll back some of the existing
taxation." The paper also recommends "extending, or
making permanent, the current moratorium on e-commerce."
It also offers a caution about multistate tax cartels: "A
careful look at the Constitution -- and the Commerce, Import-
Export, and Compact Clauses, in particular -- together with
legal precedents should give any citizen ample reason to be
suspicious of multi-state tax-collection cartels. Such efforts
would undermine the federalist principles on which this nation
was founded -- and on which it has thrived." The paper
was written by Kent Lassman and Anna Duff for the Claremont
9/25. California Gov. Gray Davis signed into law SB
394, a bill to extend the California Internet Tax Freedom
Act (CITFA). This act extends California's current moratorium
on new and discriminatory taxes, taxes on Internet access, and
bandwidth taxes; the previous act was scheduled to expire on
January 2, 2002. Under this act, the CITFA will expire on
January 1, 2003, or January 1, 2004, depending on whether
certain conditions are met. SB 394 was sponsored by Sen. Byron
Sher (D-Palo Alto).
|Monday, October 1
|The House will not be in session. The Senate will meet a
12:00 NOON for morning business.
9:30 AM. The U.S.
Court of Appeals for the District of Columbia Circuit will
hear oral argument in AT&T Wireless Services v. FCC,
No. 00-1304. Judges Edwards, Rogers and Tatel will preside.
Location: 333 Constitution Ave., NW, Washington DC.
2:00 PM. Timothy Muris, Chairman of the FTC,
and lawyers and investigators from the FTC's Bureau of
Consumer Protection, will hold a press conference to announce
an Internet fraud enforcement initiative. Location: FTC
Internet lab, 600 Pennsylvania Avenue NW, Washington DC.
|Tuesday, October 2
|The House will meet at 12:30 PM for morning hour, and at
2:00 PM for legislative business. There may be votes after
6:00 PM on bills considered under suspension of the rules.
The Supreme Court of
the United States will hear oral argument in NCTA v.
Gulf Power (No. 00-832) and FCC v. Gulf Power (No.
00-843), consolidated. See, calendar
10:00 AM. The Senate
Banking Committee will hold an oversight hearings to
examine the activities of the Trade Promotion Coordinating
Committee. The scheduled witnesses are Donald Evans (Secretary
of Commerce), John Robson (P/Ch of the Export-Import Bank),
Hector Barreto (Administrator of the SBA), Peter Watson (P/CEO
of the Overseas Private Investment Corporation), and Thelma
Askey (Director of the U.S. Trade and Development Agency).
Location: Room 538, Dirksen Building.
10:00 AM. The Senate
Judiciary Committee will continue its hearing on homeland
defense matters. (This hearing began on September 25. Attorney
General John Ashcroft testified regarding the
Administration's Anti Terrorism Act of 2001.) Sen. Patrick Leahy (D-VT)
will preside. Location: Room 216, Hart Building.
12:00 NOON. The Congressional Internet Caucus Advisory
Committee will host a panel discussion on electronic
surveillance issues. Lunch will be served. RSVP to Megan
Kinnaird or Catherine Parsons at 202-638-4370. Location:
Reserve Officers Association, One Constitution Ave, NE,
Washington DC. The speakers will be Viet Dinh (Assistant
Attorney General for Legal Policy), John Podesta (Georgetown University
Law Center), James Dempsey (Center
for Democracy and Technology), and Bruce Heiman (Preston
4:00 - 5:30 PM. The Cato
Institute will host a panel discussion titled
"Fighting Terrorism, Preserving Civil Liberties."
The speakers will be Rep.
Bob Barr (R-GA), Solveig Singleton (Competitive Enterprise
Stuart Taylor (National Journal), and Jonathan Turley
(George Washington University). The event will be web cast
from the Cato web site. Location: 1000 Massachusetts Ave., NW,
|Wednesday, October 3
|10:00 AM. The Senate
Judiciary Committee's Subcommittee on the Constitution,
Federalism, and Property Rights will hold a hearing titled
"Protecting Constitutional Freedoms in the Face of
Russ Feingold (D-WI) will preside. Location: Room 226,
10:00 AM. The House
Commerce Committee will hold a meeting to mark up three
bills. One pertains to bio terrorism. The second pertains to
threats to nuclear facilities. The third is a bill to clarify
the application of cable TV system privacy requirements to
new cable services. Location: Room 2123, Rayburn Building.
|Thursday, October 4
|9:30 AM. The Senate
Governmental Affairs Committee will continue its hearing
on the security of critical governmental infrastructure. (It
began this hearing on September 12, 2001.) Location: Room 342,
2:00 PM. The Senate
Judiciary Committee will hold a hearing titled
"Judicial Nominations." Sen. Herb Kohl (D-WI) will
preside. Room 226, Dirksen Building.
First day one of a two day conference hosted by the Department
of Commerce's Bureau of
Export Administration on export control law. This is the
14th annual east coast "Update Conference on Export
Controls and Policy." It will cover U.S. export control
policies, regulations, and procedures through a wide array of
plenary sessions and workshops. The price is $595. See, BXA's
web page on the conference. Location: Hilton Washington
Hotel, Washington DC.
Deadline to submit reply comments to the FCC regarding SBC's Section 271 application
to provide interLATA service in the states of Arkansas and
Missouri. (CC Docket No. 01-194.) See, FCC
|People and Appointments
|9/27. California Gov. Gray Davis announced the appointment
of Judge Carlos Moreno as an Associate Justice of the
California Supreme Court. He replaces former Justice Stanley
Mosk, who died in June. Moreno is currently a U.S. District
Court Judge for the Central District of California.
9/26. California Gov. Gray Davis announced the appointments of
Richard Mosk and Dennis Perluss to the
California Court of Appeal in Los Angeles.
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