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October 5, 2001, 9:00 AM ET, Alert No. 280.
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FTC Chairman Opposes Privacy Legislation
10/4. Timothy Muris, Chairman of the Federal Trade Commission (FTC), gave a speech titled "Protecting Consumers' Privacy: 2002 and Beyond" at the Privacy 2001 Conference in Cleveland, Ohio. He stated that "We plan to increase resources devoted to protecting privacy by 50 percent". He also said that he opposes new privacy legislation at this time. He was silent on pending spam bills.
Privacy Legislation. Muris stated that "I have learned that there are clearly good arguments for such legislation: online privacy legislation could increase consumer confidence in the Internet by establishing a clear set of rules about how personal information is collected and used. Moreover, federal legislation could help ensure consistent regulation of collection practices across the 50 states. These are desirable goals. Nevertheless, it is too soon to conclude that we can fashion workable legislation to accomplish these goals."
Muris elaborated three reasons for opposing legislation. First, he stated that the "recent experience with Gramm Leach Bliley privacy notices should give everyone pause about whether we know enough to implement effectively broad based legislation based on notices. Acres of trees died to produce a blizzard of barely comprehensible privacy notices. Indeed, this is a statute that only lawyers could love -- until they found out it applied to them."
He also stated that he is concerned that pending legislation addresses only online privacy, and not privacy generally. He also said that "the slowing of the growth of the Internet emphasizes the need to understand the cost of online privacy legislation."
Enforcement of Privacy Policies. Muris stated that the FTC would continue to encourage businesses to adopt privacy policies, and to bring enforcement actions against those which violate their policies. He added that "Privacy promises made offline should be held to the same standard."
Muris also suggested how the FTC would catch violators. "We will seed lists with names to ensure that restrictions on disclosures to third parties are honored. We will also work with seal programs and others to get referrals of possible privacy violations."
Spam. Muris addressed unsolicited e-mail. He stated that "We will also heighten our attack on deceptive spam. It is the bane of cyberspace. Unsolicited messages from legitimate businesses may be annoying, but most businesses stop before they alienate their customers. Fraudulent spammers have no such incentive and promote shifty schemes like chain letters, pyramid schemes, and other forms of deceptive, "get rich quick" frauds." However, he took no position on any anti-spam legislation pending in the Congress. Nor did he state that the FTC would initiate any rule making proceedings.
He also addressed identity theft, pretexting (obtaining personal financial information by fraud), enforcement of the Fair Credit Reporting Act, and the Telemarketing Sales Rule.
Industry Reaction. Industry groups expressed support for Muris' statement. Jonathan Zuck, of the Association for Competitive Technology, praised the speech: "Chairman Muris is obviously aware of the problems inherent in most privacy bills floating around Capitol Hill. Generally, they concentrate on regulating new technologies instead of protecting sensitive information regardless of how it was collected. The result is anti technology rather than pro privacy policies that are ineffective and unfairly burden small online companies. Additionally, the pace of technological change makes any attempt to legislatively address specific aspects of technology extremely difficult and potentially very costly for the industry. The new direction of the FTC is exactly what ACT and the American people have been advocating." See also, US Chamber of Commerce release.
Senate Committee Holds Hearing on Information Infrastructure Protection
10/4. The Senate Governmental Affairs Committee held another hearings on the security of critical governmental infrastructure. It also held a hearing on September 12, 2001. See, prepared statements of witnesses: Ronald Dick (FBI's National Infrastructure Protection Center), Sally McDonald (GSA's Federal Computer Incident Response Center), John Tritak (BXA's Critical Infrastructure Assurance Office), Frank Cilluffo (Center for Strategic and International Studies), Joseph Nacchio (Qwest Communications), and Kenneth Watson (Partnership for Critical Infrastructure Protection Security).
More Documents
Upton: HR 2981, a bill to establish a 2 year recovery period for depreciation of computers and other technological equipment, a 24 month useful life for depreciation of computer software, and a 7 year useful life for depreciation of certain spectrum licenses, 10/2 (HTML, LibCong).
Sensenbrenner: HR 2975, the PATRIOT Act, 10/2 (HTML, LibCong). This version of the bill does not include amendments adopted by the House Judiciary Committee on October 3.
Commissioner Anthony Supports Privacy Legislation
FTC Chairman Timothy Muris also stated in his speech on privacy that the views which he expressed "are those of the Chairman, and do not necessarily reflect the views of the Commission or of any other Commissioner." FTC Commissioner Sheila Anthony, a Democrat appointed by former President Clinton, issued a response stating her contrary views.
Anthony wrote, in full, that: "I support the Chairman's plans to expand the Commission’s privacy agenda in the commercial arena, but I do not believe that he has made the case for the Commission to depart from its earlier legislative recommendation. Although some companies have made a good faith effort, the private sector, as a whole, continues to fail to effectively self regulate. Absent federal legislation that sets standards to be followed by everyone, it is unlikely that consumers' privacy can be adequately protected from identity theft, commercial harassment, and hucksterism."
7th Circuit Rules in Lanham Act Case
10/4. The U.S. Court of Appeals (7thCir) issued its opinion in Bliss Salon v. Bliss World, a Lanham Act case. Bliss Salon has operated a single beauty salon in northwest Chicago for over twenty years; it never registered a mark. Bliss World is a newer New York based chain that operates spas and sells products. It registered its mark in 1997. Bliss Salon (the Chicago shop) filed a complaint in U.S. District Court (NDIll) against Bliss World (the chain) under § 43(a)(1)(A) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), seeking an injunction that would forbid Bliss World from operating within 100 miles of Chicago. The District denied the request for an injunction. The Appeals Court affirmed, on the grounds that there is no likelihood of confusion. It called the 100 mile request an "outlandish demand" for a single beauty parlor. It also noted that Bliss Salon had engaged in cyber squatting on Bliss World's marks. Hence, if there were any likelihood of confusion, it would have resulted from Bliss Salon's conduct.
Encryption Controls
10/4. The Computer and Communications Industry Association (CCIA) wrote a letter [PDF] to Sen. Judd Gregg (R-NH) and Congressional leaders in which it expressed "serious concern with your proposal to roll back important reforms in U.S. encryption policy, and implement unprecedented government controls on technology and computer networks."
The CCIA also stated that "Government controls on encryption and mandatory key escrow would do very little to prevent terrorism or protect our national security, and there is no evidence that your proposal would have even a negligible impact in anti-terrorism efforts. Furthermore, this legislation would be extremely counterproductive to our industry's efforts to promote a healthy, competitive, global economy as well as ensuring secure, authenticated, trusted communications and digital asset protection in the global business environment."
9th Circuit Affirms in Humetrix v. Gemplus
10/4. The U.S. Court of Appeals (9thCir) issued its opinion in Humetrix v. Gemplus, a contract and Lanham Act case relating to smart card technology. Humetrix, an American health care consulting company, filed a complaint against Gemplus, a French smart card technology company, in U.S. District Court (SDCal) alleging breach of contract and breach of its fiduciary duty as Humetrix's partner. Humetrix also sued Guy Guistini, a Gemplus employee, for intentional interference with contractual relations. It also sued Inovaction, a French company holding the French trademark for "Vaccicard", seeking a declaration that Humetrix was entitled to use the "Vaccicard" trademark in the U.S. The jury awarded Humetrix $15 Million in damages and declared that Humetrix was entitled to use the trademark "Vaccicard" in the U.S. The Court of Appeals affirmed.
More News
10/4. October 4 was the 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. See, FCC notice [PDF] and reply comment [PDF] submitted by Sage Communications. (CC Docket No. 01-194.)
10/4. The Senate Judiciary Committee postponed its executive business meeting which had previously been scheduled for October 4.
10/4. The Mississippi Public Service Commission (MPSC) endorsed BellSouth's Section 271 application to provide interLATA service in Mississippi. BellSouth now plans to file its long distance application for Mississippi with the FCC.
10/4. California Gov. Gray Davis announced the appointment of Susan Breall as a judge of the San Francisco County Superior Court. She has been with the San Francisco District Attorney's office since 1984.
10/4. California Gov. Gray Davis signed Assembly Bill 245, an identity theft bill sponsored by Assembly member Mark Wyland (R-Del Mar). It broadens the definition of identity theft to include using lawfully gained information in an illegal manner.
Friday, Oct 5
9:30 AM. There will be a press briefing on possible remedies in the Microsoft antitrust case. For more information, contact Bert Foer, American Antitrust Institute, 202-244-9800 or email. Location: West Room, National Press Club, 529 14th St. NW, 13th Floor, Washington DC.
10:00 AM. The House Government Reform Committee's Subcommittee on Government Efficiency, Financial Management, and Intergovernmental Affairs will hold a hearing titled "Information Technology -- Essential Yet Vulnerable: How Prepared Are We for Attack?" Location: Room 2154, Rayburn Building.
12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Practice Committee will host a lunch. The speakers will be Kathleen Ham and Jim Schlichting, Deputy Chiefs of the FCC's Wireless Telecommunications Bureau. The price to attend is $15. Register with by 5:00 PM on October 2. Location: Sidley & Austin, 1501 K Street, NW Conference Room 6-E, Washington DC.
6:30 PM. FTC Commissioner Mozelle Thompson will deliver the pre dinner address titled "Competition and Antitrust Policy" before the Economic Strategy Institute's Global Forum 2001 Technology Summit. Location: Mayflower Hotel, Washington DC.
Second 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 in response to its Notice of Proposed Rulemaking (NPRM) regarding the concept of a unified intercarrier compensation regime, including reciprocal compensation, and alternative approaches such as "bill and keep." See, notice in Federal Register, May 23, 2001, Vol. 66, No. 100, at Pages 28410 - 28418.
Deadline to submit comments to the USPTO regarding its notice of proposed rulemaking (NPRM) pertaining to requirements for claiming the benefit of prior filed applications under 18 month publication of patent applications. See notice, Federal Register, September 5, 2001, Vol. 66, No. 172, at Pages 46409 - 46415.
Monday, Oct 8
Columbus Day.
Day one of a two day seminar offered by the Federal Communications Bar Association (FCBA) on communications law. See, agenda [PDF]. Location: Georgetown University Law Center, 600 New Jersey Avenue, NW, Washington DC.
Tuesday, Oct 9
2:30 PM. The Senate Commerce Committee will hold a hearing on the nomination of John Marburger to be Director of the Office of Science and Technology Policy, and the nomination of Phillip Bond to be Under Secretary of Commerce for Technology. Location: Room 253, Russell Building.
Day two of a two day seminar offered by the Federal Communications Bar Association (FCBA) on communications law. See, agenda [PDF]. Location: Georgetown University Law Center, 600 New Jersey Avenue, NW, Washington DC.
Deadline to file reply comments with the FCC in its third inquiry into whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion, pursuant to Section 706 of the Telecom Act of 1996. This notice of inquiry was adopted by the FCC at its August 9, 2001, meeting. See, Aug. 9 FCC release. See also, notice in Federal Register, August 24, 2001, Vol. 66, No. 165, at Page 44636. (CC Docket No. 98-146.)
TIA Wants National Broadband Policy
10/4. The Telecommunications Industry Association (TIA) wrote a letter [PDF] to President Bush urging the "development of a national broadband policy and implementation strategy." The TIA stated that such policy should include tax credits for investing in broadband services, more spectrum for Third Generation (3G) wireless services, and various changes to FCC regulations. 
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