|House Committee Votes 2
Year Extension of Net Tax Moratorium
|10/10. The House
Judiciary Committee passed a substitute version of HR
1552, the Internet Tax Nondiscrimination Act, a
bill to extend the current moratorium on Internet access
taxes, and multiple and discriminatory taxes on Internet
commerce. The current ban expires on October 20. The Committee
approved an amendment in the nature of a substitute offered by
Rep. Spencer Bachus
(R-AL) that provides a two year extension.
HR 1552, as introduced, and as approved by the Subcommittee on
Commercial and Administrative Law on August 2, would have
provided a five year extension of the ban on multiple
or discriminatory taxes, and permanently banned taxes on
Internet access. The vote on Bachus's amendment was 19 to 15.
Then, the bill, as amended, passed by a voice vote.
This Bachus amendment provides that "Section 1101(a) of
the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended
by striking "3 years after the date of the enactment of
this Act" and inserting "on November 1, 2003."
Section 1101(a) of the Internet Tax Freedom Act, which was
enacted in late 1998, provides that "No State or
political subdivision thereof shall impose any of the
following taxes during the period beginning on October 1,
1998, and ending 3 years after the date of the enactment of
this Act ... (1) taxes on Internet access, unless such tax was
generally imposed and actually enforced prior to October 1,
1998 ... (2) multiple or discriminatory taxes on electronic
Section 1101(b) provides that "Except as provided in this
section, nothing in this title shall be construed to modify,
impair, or supersede, or authorize the modification,
impairment, or superseding of, any State or local law
pertaining to taxation that is otherwise permissible by or
under the Constitution of the United States or other Federal
law and in effect on the date of enactment of this Act".
Rep. Bob Barr (R-GA),
Rep. Bob Goodlatte
(R-VA), and other proponents of the five year extension,
argued that Internet sales account for less than one per cent
of retail sales. They also argued that passage of this bill
would require fair treatment of Internet commerce, would
assist the development of the Internet, and would grow the
Several members, including Rep. Bachus and Rep. William Delahunt
(D-MA), argued that the Internet tax moratorium is harming the
ability of state and local taxing authorities to finance
schools, police, and fire protection. They also argued that
any legislation should both extend the current moratorium, and
address state collection of sales and use taxes, which is not
affected by the moratorium. Currently, Quill
v. North Dakota, 504 U.S. 298 (1992), provides that state
and local taxing authorities are barred under the Commerce
Clause from requiring remote sellers without a substantial
nexus to the taxing jurisdiction to collect sales taxes for
sales to persons in the jurisdiction; however, the Court added
that Congress may extend such authority. Congress has passed
no legislation pertaining to sales and use taxes. However,
there are several bills pending in the Congress that would
provide this authority. See, for example, HR
1410, sponsored by Rep.
Ernest Istook (R-OK), and S
512, sponsored by Sen.
Byron Dorgan (D-ND).
Rep. Bachus also offered an amendment that would have
addressed this issue. However, it was ruled non germane. Rep.
Bachus also offered an amendment that would have provided for
a mere eight month extension. It was rejected by a vote of 12
to 19. He argued that a shorter extension, as opposed to a
longer extension, was necessary to maintain bargaining
leverage on the state and local sales tax collection issue.
|Anti Terrorism Bills
|10/10. On Wednesday, October 10, the Senate continued its
consideration of S 1447, the Aviation Security Bill. It
did not take up its anti terrorism bill, S
1510, the USA Act. Nor did the House take up its version, HR
2975, the PATRIOT Act. Either or both houses may take up
their versions of these anti terrorism bills on Thursday,
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
The CDT wrote a
"Dear Activist" letter regarding the pending anti
terrorism bills. It states, in part: "Legislation to
expand government surveillance will be considered by the
Senate (and maybe the House) on Thursday, October 11. In the
Senate, Sen. Russ Feingold is planning to offer amendments
Thursday morning that will address some of the privacy
concerns raised by the pending bills, by requiring government
surveillance to be more focused and subject to meaningful
judicial controls. CDT supports the Feingold amendments."
|House Committee Considers
|10/10. The House
Science Committee held a hearing titled "Cyber
Security – How Can We Protect American Computer Networks
From Attack?" Rep.
Sherwood Boehlert (R-NY), the Chairman of the Committee,
said in his opening
statement that "American society has become vastly
more dependent on computers and the Internet in recent years,
making us more vulnerable to criminal or terrorist attacks on
our computer networks. Yet research and development on
computer security have not kept pace with the growing
significance of the threat." He said that he intends to
follow up with legislation.
William Wulf (AT&T) said in his prepared
statement that "We have virtually no research base on
which to build truly secure systems and only a tiny cadre of
academic, long term, basic researchers who are thinking deeply
about these problems. ... Well funded, long term basic
research on computer security is crucial to our national
security." See also, prepared statements of Eugene
Spafford (Purdue University's CERIAS), Terry
Benzel (Network Associates), and Robert
Weaver (Secret Service). See also, Committee release.
|Pelosi Elected House
|10/10. House Democrats elected Rep. Nancy Pelosi
(D-CA) to be House Minority Whip, the second ranking position
in the House Democratic leadership. She defeated Rep. Steny Hoyer (D-MD).
The previous Minority Whip, Rep.
David Bonior (D-MI), stepped down, because he is running
for Governor of Michigan. The top position in the House
Democratic leadership is House Minority Leader. Rep. Dick Gephardt
(D-MO) continues in this position.
|House Passes Internet
|10/10. The House passed HR
1992, the Internet Equity and Education Act of 2001, by a
vote of 354 to 70. See, Roll
Call No. 375. 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
The House rejected an amendment
in the nature of a substitute [PDF] that was offered by Rep. Patsy Mink (D-HI),
by a vote of 99 to 327. See, Roll
Call No. 374. She had argued that the relaxed standards of
the bill would facilitate fraud, and increase student loan
The bill amends the Higher Education Act of 1965 by removing
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.
On September 21, Sen. Mike
Enzi (R-WY), and others, introduced S 1445,
a companion bill in the Senate. It has been referred to the Senate Committee on Health,
Education, Labor and Pensions.
Financial Services Antifraud Network Act
|10/10. The House
Judiciary Committee approved HR 1408,
the Financial Services Antifraud Network Act of 2001, by a
voice vote. This bill, which was approved by the House
Financial Services Committee on August 2, provides that
"financial regulators shall ... develop procedures to
provide a network for the sharing of antifraud
information", such as formal findings in disciplinary
proceedings of various regulatory bodies. One of the purposes
of the bill is to "to take advantage of Internet
technology and other advanced data-sharing technology to
modernize the fight against fraud in all of its evolving
manifestations and permutations."
|House Committee to Mark Up
Internet Gambling Bill
|10/10. The House
Financial Services Committee is scheduled to mark up HR 3004,
the Financial Anti Terrorism Act of 2001, on Thursday morning,
October 11. This is a large bill introduced by Rep. Mike Oxley (R-OH)
and others on October 3 which is intended to combat the
financing of terrorism and other financial crimes. Title III
of the bill pertains to combating international money
laundering. However, it also contains, at §§ 303 and 304,
provisions which are aimed at drying up the flow of money in
§ 303 provides, in part, that: "No person engaged in the
business of betting or wagering may knowingly accept, in
connection with the participation of another person in
unlawful Internet gambling (1) credit, or the proceeds of
credit, extended to or on behalf of such other person
(including credit extended through the use of a credit card);
(2) an electronic fund transfer or funds transmitted by or
through a money transmitting business, or the proceeds of an
electronic fund transfer or money transmitting service, from
or on behalf of the other person; (3) any check, draft, or
similar instrument which is drawn by or on behalf of the other
person and is drawn on or payable at or through any financial
institution; or (4) the proceeds of any other form of
financial transaction as the Secretary may prescribe by
regulation which involves a financial institution ..."
§ 304 requires the U.S. government to encourage foreign
governments and international fora to further to goals of the
bill with respect to illegal Internet gambling.
|FTC Files Complaint Against
|10/10. The FTC filed an
alleging violation of the Clayton Act. The FTC challenges
MSC's 1999 acquisitions of Universal Analytics and
Computerized Structural Analysis & Research on the basis
that the acquisitions eliminate competition in the market for
a type of computer aided engineering software known as Nastran.
The FTC seeks the establishment of two competing businesses.
See also, FTC
|10/10. The U.S.
District Court (DDC) issued its Order [PDF]
approving the stipulation for dismissal of the State of New
Mexico in the Microsoft
10/10. The Senate
Judiciary Committee's Subcommittee on Administrative
Oversight and the Courts postponed its hearing to examine new
priorities and challenges for the FBI, which had been
scheduled for October 10.
10/10. The NCTA
wrote a letter
[PDF] to FCC Chairman
Michael Powell, and others at the FCC, regarding recent
"measures to facilitate the retail availability of
set-top boxes" undertaken by cable companies. It
concludes that "The policies adopted by the NCTA Board
represent a major advance towards meeting the goals of Section
629 of the Communications Act – the 'commercial
availability' provision." See also, NCTA
10/10. The Supreme
Court of the United States heard oral argument in a telric
case: 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), consolidated. See, USTA
|About Tech Law Journal
|Tech Law Journal is a free access web site and e-mail alert
that provides news, records, and analysis of legislation,
litigation, and regulation affecting the computer and Internet
industry. This e-mail service is offered free of charge to
anyone who requests it. Just provide TLJ an e-mail address.
Number of subscribers: 2,160.
Contact: 202-364-8882; E-mail.
P.O. Box 15186, Washington DC, 20003.
Copyright 1998 - 2001 David Carney, dba Tech Law Journal. All
|Thursday, Oct 11
|9:30 AM. The FCC will hold a meeting. See, agenda,
below. 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.
Section 303 prohibits the use of credit, electronics funds
transfers, or checks in connection with unlawful Internet
gambling. Location: Room 2128, Rayburn Building.
AM. The Senate
Judiciary Committee will hold an business meeting to
consider pending calendar business. Location: Room 226,
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 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.
POSTPONED TO OCTOBER 17.
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,
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 firstname.lastname@example.org 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, September 13, 2001, Vol. 66, No. 178, at
Pages 47618 - 47621.
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.)
in Federal Register, September 13, 2001, Vol. 66, No. 178, at
Pages 47621 - 47625.
|FCC Meeting Agenda
Thursday, Oct 11
|Multi-Association Group (MAG) Plan. The FCC will
consider a several reports, orders and NPRMs
concerning interstate access charge and universal service
reform for ILECs
subject to rate of return regulation, alternative forms of
regulation for such carriers, pricing flexibility, and the
"all or nothing" rule. (CC Docket Nos. 00-256, 98-77
2000 Biennial Regulatory Review. The FCC will consider
a Report and Order and a FNPRM
concerning streamlining and modifying the accounting rules and
reporting requirements for incumbent local exchange carriers.
(CC Docket Nos. 00-199, 97-212, 80-286, 00-199, 99-301 and
Ancillary or Supplementary Use of Digital TV Capacity by
Noncommercial Licensees. The FCC will consider a Report
and Order concerning the ability of noncommercial educational
(NCE) TV stations to use excess capacity on their digital
television (DTV) channels for commercial purposes. (MM Docket
The Commission will consider a NPRM concerning the exclusivity
provisions of the program access rules.
International Calling Plans. The International Bureau
and the Consumer Information Bureau will make a joint
presentation on the status of international calling prices and
an initiative to educate consumers about international calling
See also, FCC's meeting
|Friday, Oct 12
|9:00 AM - 4:00 PM. The NTIA
will hold a day long conference on the status of broadband
deployment in the United States. See, NTIA
release and agenda.
Location: U.S. Department of Commerce, Hoover Building, 1401
Constitution Ave., NW, Room 4830, Washington DC.
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. Sen. Russ Feingold
(D-WI) will preside. Location: Room 226, Dirksen Building.
10:00 AM. The Senate
Governmental Affairs Committee will hold a hearing to
examine legislative options to strengthen homeland defense.
Location: Room 342, Dirksen Building.
|Monday, Oct 15
AM - 12:00 NOON. The American
Enterprise Institute (AEI) and the Brookings Institution will
jointly host a panel discussion titled The PCS C Block
Mess: The FCC as Auctioneer and Banker. The speakers
will be Rudy
Group), George Reed-Dellinger (Washington Analysis), Harold Furchtgott-Roth
(AEI), John Thorne (Verizon),
and Thomas Hazlett (AEI). The price to attend is $5. See, online registration
page. Location: AEI, Wohlstetter
Conference Center, Twelfth Floor, 1150
17th Street, NW, Washington, DC.
12:00 NOON - 2:00 PM. The Federal
Communications Bar Association (FCBA) will host a lunch
featuring FCC Commissioner Michael Copps.
Location: Capitol Hilton, Washington DC.