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October 1, 2001, 9:00 AM ET, Alert No. 276.
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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, 1999.
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, 2000.
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 Federal office."
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 in Dow 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 October 1
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. Computer Associates
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 House release.
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 Order [PDF].
Excite@Home Seeks Bankruptcy Protection
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 Division."
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 Governmental Affairs.
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 also, Allen 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 Institute.
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 [PDF].
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 Gates).
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 Institute), 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, Washington DC.
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 Terrorism." Sen. Russ Feingold (D-WI) will preside. Location: Room 226, Dirksen Building.
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, Dirksen Building.
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 notice [PDF].
FCC Grants CALEA Extension
9/27. The FCC's Common Carrier Bureau adopted and released an Order [PDF] in which it granted extensions of time to named carriers to comply with the FCC's implementation of the Communications Assistance or Law Enforcement Act (CALEA). See also, FCC Public Notice [PDF] of September 28.
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.
More News
9/27. The Recording Industry Association of America (RIAA) gave Rep. John Conyers (D-MI) an honorary community service award for his contributions in support of the music community at a reception in his honor. Rep. Conyers is the ranking Democrat on the House Judiciary Committee, which has jurisdiction over bills affecting copyright law. See, RIAA release.
9/28. The NTIA published in its web site Amendment 4 to the Department of Commerce - ICANN Memorandum of Understanding, and Amendment 2 to the Cooperative Research and Development Agreement (CRADA) with ICANN.
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