Tech Law Journal Daily E-Mail Alert
October 10, 2001, 9:00 AM ET, Alert No. 283.
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Ways & Means Committee Passes Trade Promotion Authority Bill
10/9. The House Ways and Means Committee amended and approved HR 3005 [PDF], the Bipartisan Trade Promotion Authority Act of 2001, by a vote of 26 to 13 on Tuesday night, October 9. All of the Republican members of the Committee voted for the bill. Two Democrats voted for the bill, while several more did not vote.
See, HR 3005 [57 pages in PDF] as introduced. The Committee approved an amendment in the nature of a substitute offered by Chairman Bill Thomas (R-CA), which did not alter the key provisions of the bill. The Committee also approved an amendment offered by Rep. Benjamin Cardin (D-MD) regarding foreign corrupt practices.
Trade promotion authority (TPA), which is also known as fast track, gives the President authority to negotiate trade agreements which can only be voted up or down, but not amended, by the Congress. TPA strengthens the bargaining position of the President, and the U.S. Trade Representative, in negotiations with other nations.
Technology companies that export equipment, software, or services, and that seek greater protection abroad for their intellectual property rights, stand to benefit from enactment of TPA.
This bill gives the President authority to negotiate agreements that only reduce tariffs without the need for any implementation from the Congress. (See,  3(a).) The bill also gives the President trade promotion authority to negotiate agreements that address both tariff and non-tariff barriers. (See,  3(b).)
TPA is a controversial issue, but not primarily because of the basic authority granted to the President. Rather, the intense debate has focused on the appropriate role of labor and environmental standards in free trade agreements (FTAs). Free traders and Republicans have tended to argue that these are social issues that are not appropriately included in trade agreements. In addition, there are concerns in Congress about surrendering constitutional authority to the President. Moreover, there are also some important, but not frequently debated, standards in the bill pertaining to intellectual property rights and e-commerce.
HR 3005 attempts to strike a compromise on both labor and environmental standards, and maintaining a significant role for the Congress in trade agreement negotiations. The bill sets "overall trade negotiating objectives" and "principal trade negotiating objectives". Among the principal trade negotiating objectives are "to ensure that a party to a trade agreement with the United States does not fail to effectively enforce its environmental or labor laws, through a sustained or recurring course of action or inaction ..." and "to strengthen the capacity of United States trading partners to protect the environment ..." Moreover, the bill also provides that trade agreements that cover tariff and non-tariff barriers "may be entered into ... only if such agreement makes progress in meeting the applicable objectives ..."
HR 3005 attempts to involve Congress in the process by mandating various consultations with the Congress.
Rep. Sander Levin (D-MI) was the most vocal opponent of the bill. He argued that the bill does not go far enough to promote labor and environmental standards. Rep. Charles Rangel (D-NY), the ranking Democrat on the Committee, also condemned the bill. He accused Republicans of being partisan in a time of national crisis. He then offered a substitute amendment, which was sponsored only by Democrats. It was rejected.
The meeting, which was scheduled to start at 5:00 PM, started late, broke for several floor votes, and finally concluded over four hours later. The USTR, Robert Zoellick, was present to answer technical questions about the bill. However, much of the time was taken up in substantive debate between Zoellick, who supports the bill, and some of the Democrats on the Committee who oppose the bill. The two Democrats on the Committee who voted for the bill were Rep. William Jefferson (D-LA) and Rep. John Tanner (D-TN).
TPA Bill Sets IPR and E-Commerce Objectives
10/9. HR 3005, the Bipartisan Trade Promotion Authority Act of 2001, which was approved by the House Ways and Means Committee on October 9, also sets detailed objectives for the President to meet regarding intellectual property rights (IPR) and electronic commerce.
HR 3005, at  2(b)(4), provides that the "principal trade negotiating objectives" of the President shall include intellectual property. This section states, in part, that "The principal negotiating objectives of the United States regarding trade-related intellectual property are (A) to further promote adequate and effective protection of intellectual property rights, including through (i)(I) ensuring accelerated and full implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights ..."
This section also sets as objectives "providing strong protection for new and emerging technologies and new methods of transmitting and distributing products embodying intellectual property" and "ensuring that standards of protection and enforcement keep pace with technological developments, and in particular ensuring that rightholders have the legal and technological means to control the use of their works through the Internet and other global communication media, and to prevent the unauthorized use of their works".
Similarly,  2(b)(8) provides that the "principal negotiating objectives of the United States with respect to electronic commerce are (A) to ensure that current obligations, rules, disciplines, and commitments under the World Trade Organization apply to electronic commerce; (B) to ensure that (i) electronically delivered goods and services receive no less favorable treatment under trade rules and commitments than like products delivered in physical form; and (ii) the classification of such goods and services ensures the most liberal trade treatment possible; (C) to ensure that governments refrain from implementing trade-related measures that impede electronic commerce; (D) where legitimate policy objectives require domestic regulations that affect electronic commerce, to obtain commitments that any such regulations are the least restrictive on trade, nondiscriminatory, and transparent, and promote an open market environment; and (E) to extend the moratorium of the World Trade Organization on duties on electronic transmissions."
These provisions were the subject of very little debate or discussion at the Committee mark up meeting. There was some discussion of IPR. This was mostly regarding patent protection in the context of pharmaceuticals. However, Rep. Sander Levin (D-MI) also stated that "we are imposing" on other countries by requiring them to comply with TRIPS. USTR Robert Zoellick responded bluntly: "we object to people stealing property."
Rules Committee Adopts Rule for Distance Education Bill
10/9. The House Rules Committee adopted a modified closed rule for consideration of HR 1992, the Internet Equity and Education Act of 2001. This bill would make it easier to obtain student loans for Internet based education, and other distance learning. The bill is sponsored by Rep. Johnny Isakson (R-GA).
This rule allows for one hour of debate in the House equally divided and controlled by the chairman and ranking minority member of the Committee on Education and the Workforce. It also allows Rep. Patsy Mink (D-HI) to offer her amendment in the nature of a substitute [PDF].
The bill would remove the burden of the "12-hour rule" for non-traditional programs. This rule requires educational institutions to keep voluminous attendance records to demonstrate that their students attended certain types of work sessions. The bill also makes exceptions to the 50% requirement by allowing a limited number of institutions to offer more than 50 % of their courses by telecommunications, or to serve more than 50 % of their students through telecommunications courses. The bill also addresses incentive compensation provisions.
Supreme Court Denies Certiorari in Microsoft Case
10/9. The Supreme Court of the United States denied, without opinion, Microsoft's petition for writ of certiorari in the antitrust case brought against it by the government. See, Order List [PDF] at page 4. The Department of Justice issued a release which quoted a spokesman as saying, "We're pleased with the Court's decision. We'll continue our progress in the District Court." (SCUS No. 01-236, Microsoft Corporation v. United States, et al.)
House and Senate Set to Vote on Anti Terrorism Bills
10/9. Neither the House nor the Senate passed their versions of the anti terrorism bill on Tuesday. However, both bodies are poised to take up the bills this week. Senate Majority Leader Tom Daschle (D-SD) sought unanimous agreement on Tuesday to proceed to a vote on the USA Act without debate or amendments. However, Sen. Russ Feingold (D-WI) objected.
The House bill is HR 2975, titled the PATRIOT Act. See, HTML version in the Library of Congress web site, and PDF version in the CDT web site. (However, both of these lack the amendments adopted by the House Judiciary Committee on October 3.) The Senate bill is S 1510, titled the USA Act. See, HTML version in the Library of Congress web site, and PDF version in Sen. Patrick Leahy's (D-VT) web site. See also, Sen. Leahy's summary [PDF] of the bill.
Both bills contain many provisions that would increase the ability of law enforcement, intelligence, and other government agencies to combat terrorism, including expanded authority to conduct electronic surveillance of phone and Internet communications. Both bills have broad bipartisan support. The Bush Administration favors the Senate bill, in part because it lacks the two year sunset provision contained in the House bill.
Gov. Davis Vetoes E-Mail Monitoring Bill
10/9. California Gov. Gray Davis vetoed Senate Bill 147, sponsored by Sen. Debra Bowen (D-Marina del Rey). This bill would prohibit an employer from secretly monitoring the electronic mail or other computer records generated by an employee.
Gov. Davis stated that "This bill would require employers, by March 1, 2002, to execute signed or electronically verifiable agreements between an employer and employees regarding the right of the employer to monitor the e-mail traffic and computer files of employees. If such agreements are not provided, the bill prohibits employers from monitoring business computers by employees to guard against inappropriate business or personal uses."
He continued that "Under current law, employers are potentially liable if the employer's agents or employees use the employer's computers for improper purposes, such as sexual harassment, defamation and the like. It therefore follows that any employer has a legitimate need to monitor, either on a spot basis or at regular intervals, such company property, including e-mail traffic and computer files stored on either employer owned hard drives, diskettes or CD ROMs."
Gov. Davis concluded in his veto statement that "This bill places unnecessary and complicating obligations on employers and may likely to lead to litigation by affected employees over whether the required notice was provided and whether it was read and understood by the employee."
Covad Rebuts Intel and PFF on Broadband Deployment
10/9. October 9 was the 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. Covad submitted a reply comment [PDF] which criticized comments submitted by Intel, the Progress and Freedom Foundation (PFF), and Bell companies regarding broadband deployment.
On September 24, Intel submitted a comment [PDF] in which it stated that "current regulations are unnecessarily undermining the reasonable and timely deployment of broadband". It stated that the FCC "should begin a comprehensive Section 706 rulemaking to review the regulations that apply to all broadband providers." Intel concluded that "the Commission should tentatively propose deregulating all new, last mile broadband investment to encourage the fastest possible deployment of the highest speed technology. For example, it is premature to require cable companies to make their cable modem facilities available to unaffiliated ISPs at regulated rates. Similarly, new last mile DSL investment should not be encumbered by excessive regulation."
See also, comment [PDF] submitted by the PFF on September 24. The PFF also submitted a reply [PDF] on October 9 to its original comments.
Covad wrote in response that "To preserve competition, and to retain invaluable competitive pressures on broadband deployment, the Commission should not adopt the proposals of the BOCs, Intel, and PFF. It can, however, take concrete steps to further the goals of Congress by acting on the petition to adopt concrete federal rules for UNE provisioning that will allow facilities- based CLECs to continue to offer customers a real choice in broadband services. It has been five years since the Act was passed, and the BOCs still do not provide parity treatment to their CLEC wholesale customers. Adopting real provisioning rules, and associated self-executing penalties, will give CLECs and consumers the equitable treatment Congress envisioned."
This FCC 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.)
FBI Files Affidavit Regarding Key Logger System
10/4. An FBI agent filed an affidavit [PDF] with the U.S. District Court (DNJ) in USA v. Nicodemo Scarfo. As a part of its criminal investigation, the FBI surreptitiously installed on Scarfo's personal computer its "Key Logger System" to record the keystroke entry of his encryption passphrase. Scarfo now seeks to suppress evidence gathered as a result of this.
Nicodemo Scarfo is an encryption savvy mobster involved in illegal gambling and loan sharking operations. Previously, the FBI obtained court authority to surreptitiously install on Scarfo's computer "recovery methods" that could capture password and encryption key information. The Court order stated: "IT IS ORDERED ... that Special Agents of the F.B.I. ... deploy recovery methods which will capture the necessary key related information and encrypted file(s) ... that Special Agents of the F.B.I. ... be authorized to enter the TARGET LOCATION surreptitiously, covertly, and by breaking and entering, if necessary, in order to deploy recovery methods which will capture the necessary key related information and encrypted file(s) whether they are stored on Nicodemo S. Scarfo's computer hard drive in the TARGET LOCATION or on removable media."
The Electronic Privacy Information Center (EPIC) has collected and published case documents from this proceeding. See, index.
More News
10/9. The Recording Industry Association of America (RIAA) released a one page report [PDF] titled "2001 Mid Year Anti-Piracy Statistics". See also, RIAA release.
10/9. The National Music Publishers' Association (NMPA), The Harry Fox Agency (HFA) and the Recording Industry Association of America (RIAA) announced that they reached an agreement on the licensing of musical works for new subscription services on the Internet. See, RIAA release.
10/9. California Gov. Gray Davis vetoed Assembly Bill 148, sponsored by Assembly Member Charlene Zettel (R-Poway). Gov. Davis stated that "This bill would have required a study to determine the cost and the most cost-effective means of providing Internet access to every middle and junior high school. While I am most supportive of technology in schools, AB 148's study is duplicative of existing and very current information."
Bush Names Special Advisor for Cyberspace Security
10/9. President Bush picked Richard Clarke to be the President's Special Advisor for Cyberspace Security. He will report to Thomas Ridge, the Assistant to the President for Homeland Security, and to Condi Rice, the Assistant to the President for National Security Affairs. Clarke was Deputy Assistant Secretary of State for Intelligence under President Reagan. He was also Assistant Secretary of State for Political Military Affairs under the elder President Bush. In May 1998, he was appointed National Coordinator for Security, Infrastructure Protection, and Counter Terrorism. See also, White House release and transcript of event announcing Clarke appointment.
Wednesday, Oct 10.
POSTPONED. 9:00 AM - 3:30 PM. The Federal Communications Commission (FCC) will hold a Public Forum and Technology Expo on telecommunications relay services (TRS). TRS, which is required by Title IV of the Americans with Disabilities Act (Section 225 of the Communications Act of 1934), pertains to services for hearing impaired persons. Location: Commission Meeting Room, Room TW-C305 and adjacent rooms, 445 12th St., SW, Washington DC. See, FCC notice and agenda [MS Word]. See also, notice in Federal Register, August 28, 2001, Vol. 66, No. 167, at Pages 45310 - 45312.
10:00 AM - 12:00 NOON. The House Science Committee will hold a hearing titled "Cyber Security How Can We Protect American Computer Networks From Attack?" Location: 2318 Rayburn Building.
POSTPONED. 10:00 AM. The Senate Judiciary Committee's Subcommittee on Administrative Oversight and the Courts will hold a hearing to examine new priorities and challenges for the FBI. Sen. Charles Schumer (D-NY) will preside. Location: Room 226, Dirksen Building.
The Supreme Court of the United States will hear oral argument in Verizon v. FCC (00-511), WorldCom v. Verizon (00-555), FCC v. Iowa Utilities Board (00-587), AT&T v. Iowa Utilities Board (00-590), and General Communications v. Iowa Utilities Board (00-602), consolidates. There will be 90 minutes for argument.
12:00 NOON - 1:30 PM. The Federal Communications Bar Association's (FCBA) International Practice Committee will host a brown bag lunch titled "Survey of Issues Facing the International Bureau." The speaker will be Donald Abelson, Chief of the FCC's International Bureau.
2:00 PM. The House Judiciary Committee will hold a meeting to mark up several bills, including HR 1408, the Financial Services Antifraud Network Act of 2001 and HR 1552, the Internet Tax Nondiscrimination Act. Location: Room 2141, Rayburn Building.
POSTPONED. 2:00 PM. FCC Chairman Michael Powell will hold an informal press conference with reporters who cover the FCC. Location: FCC Meeting Room, 12th Street Level, 445 12th Street SW, Washington DC.
Thursday, Oct 11
9:30 AM. The FCC will hold a meeting. Location: Commission Meeting Room, FCC, 445 12th Street, SW, Room TWC305, Washington DC.
9:30 AM. The House Finance Committee will hold a meeting to mark up HR 3004, the Financial Anti Terrorism Act of 2001. Location: Room 2128, Rayburn Building.
10:00 AM. The Senate Judiciary Committee will hold an business meeting to consider pending calendar business. Location: Room 226, Dirksen Building.
10:00 AM. The House Judiciary Committee will hold an oversight hearing titled "Using Information Technology to Secure America's Borders: INS Problems with Planning and Implementation." Location: Room 2141, Rayburn House Office Building. 12:00 NOON. The Federal Communications Bar Association (FCBA) will host a luncheon titled "Competition in Japan's Telecommunications Sector." The speaker will be Shogo Itoda, Commissioner, Japan Fair Trade Commission. RSVP to DC Bar Sections Office at 202-626-3463. The price is $25 for FCBA members. Location: Arnold & Porter, Paul Porter Room, 10th Floor, 555 12th Street, NW, Washington DC.
2:00 PM. The Senate Judiciary Committee will hold hearings to examine homeland defense matters. Location: Room 226, Dirksen Building.
4:15 PM. FTC Commissioner Thomas Leary will speak at the Transatlantic Business Dialogue on "Regulatory Policy Networked Economy." Location: Folger's Shakespeare Library, 201 East Capitol Street, SE, Old Reading Room, Washington DC.
6:00 - 8:00 PM. The Federal Communications Bar Association (FCBA) will host a reception featuring David Gross, Deputy Assistant Secretary of State for Communications and Information Policy, and Nancy Victory, head of the NTIA. The price of admission is $35 for private sector members and $20 for government or students. RSVP to Wendy Parish at by Tuesday, October 9, at 10:00 AM. Location: Capital Hilton Hotel, 16th & K Streets, NW, Washington DC.
Deadline to submit comments to the FCC in its rule making proceeding regarding locating spectrum bands below 3 Ghz for possible reallocation for Third Generation (3G) wireless services, and for other purposes. (ET Docket Nos. 00-258 and 95-18 and IB Docket No. 99-81.) See, notice in Federal Register.
Deadline to submit comments to the FCC in its rule making proceeding regarding permitting Mobile Satellite Service (MSS) operators flexibility to use their spectrum for land based transmitters. (IB Docket No. 01-185, ET Docket No. 95-18.) See, notice in Federal Register.
Friday, Oct 12
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in U.S. Telecom Association v. FBI, No. 00-5386. Judges Ginsburg, Williams and Henderson will preside. Location: 333 Constitution Ave., NW, Washington DC.
10:00 AM. The The Senate Judiciary Committee's Subcommittee on Technology, Terrorism, and Government Information will hold a hearing to examine the role of technology in preventing the entry of terrorists into the United States. Location: Room 226, Dirksen Building.
People and Appointments
10/9. The SEC announced that Commissioner Laura Unger plans to leave the SEC "this fall". See, SEC release.
10/9. Nancy Victory, head of the NTIA, named people to fill several top positions. Michael Gallagher will be Deputy Assistant Secretary of Commerce for Communications and Information starting on November 2. He previously worked for Verizon Wireless. William Bailey will be NTIA Senior Advisor starting on October 11. He previously worked for Coreexpress. Stephen Madden will be NTIA Special Assistant starting on October 10. He previously worked for the Department of Agriculture. See, NTIA release.
10/9. The U.S. Telecom Association (USTA) elected Arne Haynes, President and General Manager of the Rainier Group in Eatonville, Washington, to be Chairman of the Board for a term of one year. See, USTA release.
10/9. President Bush nominated Julia Gibbons to be U.S. Circuit Judge for the Sixth Circuit and William Steele to be a U.S. Circuit Judge for the Eleventh Circuit.
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