Tech Law Journal Daily E-Mail Alert
October 12, 2001, 9:00 AM ET, Alert No. 285.
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House Committee Passes Internet Gambling Ban
10/11. The House Financial Services Committee adopted an amended version of HR 3004, the Financial Anti Terrorism Act of 2001, by a vote of 62 to 1. See, the manager's amendment [PDF], which was approved. Rep. Mike Oxley (R-OH), the Chairman of the Committee, and the sponsor of the bill, said in his opening statement that the bill "will strengthen the ability of law enforcement to disrupt the financing of terrorism, enhance the partnership between government and industry to detect terrorist related transactions, and prevent terrorists from accessing the U.S. financial system through foreign countries and institutions." See also, committee release.
However, the bill also contains, at 307 and 308, provisions which are aimed at Internet gambling. This language is similar to stand alone bills that the Committee has been considering.
307 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; or (3) the proceeds of any other form of financial transaction as the Secretary may prescribe by regulation which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of the other person."
Senators Introduce Bill to Extend Net Tax Ban
10/10. Sen. George Allen (R-VA), Sen. Barbara Boxer (D-CA), Sen. Conrad Burns (R-MT), Sen. Judd Gregg (R-NH), and Sen. John Warner (R-VA) introduced S 1525, the Defense of Internet Tax Freedom Act, a bill to extend the moratorium on Internet access taxes and multiple and discriminatory taxes for five years. The existing moratorium, contained in the Internet Tax Freedom Act, expires on October 21.
Sen. Boxer stated in the Senate that "Because Internet commerce and technology firms are not now fairing well, I support a five year extension of the tax moratorium. I believe that renewed investment in the Internet is crucial to the welfare of the entire economy and we need to support its growth as much now as we did in 1998. Through a clean extension of the tax moratorium, Congress can promote an environment for Internet growth that avoids the uncertainty, inefficiencies, and barriers to entry that new taxes would create."
Sen. Allen stated in the Senate that "by taxing Internet access, States and localities are actually contributing to an already growing economic 'digital divide.' For every dollar added to the cost of Internet access, we can expect to see lost utilization of the Internet by thousands of poor and impoverished families nationwide."
Fed Circuit Reverses in Asyst v. Empak
10/10. The U.S. Court of Appeals (FedCir) issued its opinion in Asyst v. Empak, a patent infringement case involving semiconductor manufacturing. Asyst Technologies provides integrated automation systems for the semiconductor manufacturing industry. It is the assignee of U.S. Patent No. 4,974,166, titled "Processing systems with intelligent article tracking", and U.S. Patent No. 5,097,421, titled "Intelligent waxer carrier". They describe systems used in processing semiconductor wafers into integrated circuits. Asyst filed a complaint in U.S. District Court (NDCal) against Empak, Jenoptik and others, alleging infringement. The District Court ruled on summary judgment that defendants did not infringe Asyst's patents. The Court of Appeals ruled that the District Court's claim construction and analysis was flawed. Reversed and remanded.
USTR to Appeal WTO FSC Ruling
10/10.The U.S. Trade Representative (USTR) announced that the U.S. will appeal a World Trade Organization (WTO) ruling that the U.S. foreign sales corporation (FSC) replacement statute constitutes an illegal export subsidy. See, USTR release.
On August 20 a WTO panel made public its final report on the legality of the FSC Repeal and Extraterritorial Income Exclusion Act of 2000. The Congress passed, and former President Clinton signed, this Act late last year. It replaced the FSC provisions of US tax law, which had previously been held to constitute an illegal export subsidy by the WTO.
The FSC tax regime, and its replacement, benefit US exporters, including software and hardware producers with significant sales abroad, such as Microsoft, Cisco, and Motorola. The EU has complained to the WTO about these tax regimes.
More Trade News
10/11. Sen. Max Baucus (D-MT), Chairman of the Senate Finance Committee, gave a speech on trade promotion authority. The House Ways and Means Committee passed HR 3005, the Bipartisan Trade Promotion Authority Act of 2001, by a vote of 26 to 13 on October 9. It is sponsored by Rep. Bill Thomas (R-CA), Rep. Cal Dooley (D-CA), and others. Sen. Baucus stated that the House bill "addresses a number of the key issues that many Members of Congress have expressed support for. I was especially pleased to see many of the measures I have been pushing - particularly on labor and environment - were included in this legislation. The Thomas Dooley bill is far from perfect. But it is a good effort and an important step in the right direction."
10/9. WTO Director General Mike Moore gave a speech in Paris titled "Preparations for the Fourth WTO Ministerial Conference." The 4th WTO Ministerial Conference will take place in Doha, Qatar, next month.
Anti Terrorism Bills Still Pending
10/11. On Thursday, October 11, the House debated and passed HR 3061, a bill to make appropriations for the Departments of Labor, Health and Human Services, and Education, and related agencies. The House has not yet passed its anti terrorism bill, HR 2975, the PATRIOT Act. Also on October 11, the Senate passed S 1447, the Aviation Security Act. The Senate has yet to pass its anti terrorism bill, S 1510, the USA Act.
Interception of Computer Trespasser Communications
10/11. Senators have agreed to debate four amendments offered by Sen. Russ Feingold (D-WI) to the Senate anti terrorism bill, S 1510. One amendment pertains to  217, regarding interception of computer trespasser communications. This section is intended to enable companies and other entities obtain the assistance of law enforcement agencies to fight distributed denial of service, and other, attacks on their systems.
As currently written,  217 provides, in part, that "It shall not be unlawful under this chapter for a person acting under color of law to intercept the wire or electronic communications of a computer trespasser, if -- (i) the owner or operator of the protected computer authorizes the interception of the computer trespasser's communications on the protected computer; (ii) the person acting under color of law is lawfully engaged in an investigation; (iii) the person acting under color of law has reasonable grounds to believe that the contents of the computer trespasser's communications will be relevant to the investigation; and (iv) such interception does not acquire communications other than those transmitted to or from the computer trespasser."
217 further defines "computer trespasser" as "a person who accesses a protected computer without authorization and thus has no reasonable expectation of privacy in any communication transmitted to, through, or from the protected computer". However, a computer trespasser does not include "a person known by the owner or operator of the protected computer to have an existing contractual relationship with the owner or operator of the protected computer for access to all or part of the protected computer".
Sen. Feingold's amendment would limit the surveillance under  217 to electronic communications. It would also provide that it is the trespassory communications, and not the trespasser, that the government is allowed to monitor. It would also limit the duration of surveillance under this section to 48 hours.
FCC Dismisses Texas.net Complaint
10/5. The FCC released its order [PDF] dismissing Texas Networking, Inc.'s complaint and petition seeking a declaratory ruling that AOL Time Warner (AOLTW) has not complied with the FCC's Memorandum Opinion and Order released January 22, 2001 in its AOL Time Warner merger proceeding. Texas.net alleged in its August 9 complaint that AOLTW has not complied with the provisions regarding allowing access by unaffiliated ISPs to AOLTW's cable system.
Oct 11 FCC Meeting
Multi-Association Group (MAG) Plan. The FCC announced, but did not release, at its October 11 meeting, an Order and a Further Notice of Proposed Rulemaking in which it modified its interstate access charge rules and universal service support system for rate of return ILECs. See, FCC release. (CC Docket Nos. 00-256, 98-77 and 98-166.)
Accounting Rules. The FCC announced, but did not release, a Report and Order and Further Notice of Proposed Rulemaking modifying its accounting rules and its financial and operating data reporting requirements for ILECs. See, FCC release. (CC Docket Nos. 00-199, 97-212, 80-286, 00-199, 99-301 and 80-286.)
Exclusive Contracts. The FCC announced, but did not release, a Notice of Proposed Rulemaking (NPRM) which initiates a proceeding to examine whether or not to extend the prohibition on exclusive contracts for satellite delivered cable or satellite delivered broadcast programming between vertically integrated programming vendors and cable operators. See, FCC release. (CS Docket No. 01-290.)
Digital TV Task Force. FCC Chairman Michael Powell announced the creation of an FCC Digital Television (DTV) Task Force, to be chaired by Rick Chessen, Associate Chief of the FCC's Mass Media Bureau. This task force will review the ongoing transition to DTV, and make recommendations to the FCC concerning priorities to facilitate the transition and promote the rapid recovery of broadcast spectrum for other uses. See, FCC release.
NCE DTV. The FCC announced, but did not release, a Report and Order regarding ancillary or supplementary use of digital TV capacity by noncommercial licensees. The FCC ruled that Noncommercial Educational (NCE) Television licensees are required to use their entire digital television (DTV) bitstream capacity primarily for nonprofit, noncommercial, educational broadcast services. See, FCC release, statement by Chairman Powell, and statement by Commissioner Copps. (MM Docket No. 98-203).
Rep. Stearns to Outline Privacy Bill
Rep. Cliff Stearns (R-FL), announced that he will hold a press conference on Friday, October 12, to discuss possible provisions for a federal baseline privacy statute. He stated in a release that "The free flow of this information yields major economic benefits. At the same time, consumers have legitimate concerns over the availability and use of their personal information concerns that could impede the growth of e-commerce and other information-based activities. My goal, and that of the Committee, is to address these concerns without unduly burdening these vital industries."
Rep. Stearns is the Chairman of the House Commerce Committee's Subcommittee on Commerce, Trade & Consumer Protection. This subcommittee has held nine hearings this year that have addressed privacy issues.
Friday, Oct 12
9:00 AM - 4:00 PM. The National Telecommunications and Information Administration (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. Rep. Cliff Stearns (R-FL), Rep. Billy Tauzin (R-LA), and other members of the House Commerce Committee will hold a press conference to outline possible provisions for a federal baseline privacy statute. Location: Room 2218, Rayburn Building.
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
POSTPONED. 10:00 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 Baca (Precursor Group), George Reed-Dellinger (Washington Analysis), Harold Furchtgott-Roth (AEI), John Thorne (Verizon), and Thomas Hazlett (AEI).
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.
Tuesday, Oct 16
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in COMSAT Corp v. FCC, No. 00-1458. Judges Ginsburg, Williams and Henderson will preside. Location: 333 Constitution Ave., NW, Washington DC.
9:30 - 11:30 AM. The American Enterprise Institute (AEI) will host a seminar at which Jeffrey Rohlfs (Strategic Policy Research, Inc.) will present his new book titled Bandwagon Effects in High Technology Industries. He will also address the role of bandwagon effects in the debate among economists and policy analysts over whether governments should set technical standards. The price to attend is $5 (waived for AEI supporters, government employees, and media). Location: AEI, Wohlstetter Conference Center, Twelfth Floor, 1150 17th Street, NW, Washington DC.
Davis Signs Tech Schools Grant Bill
10/11. California Gov. Gray Davis signed Assembly Bill 620, sponsored by Assembly Member Howard Wayne (D-San Diego). This bill creates a High Tech High School Grant Program "to provide 10 one-time grants to eligible school districts or charter schools for purposes of establishing new high-tech high schools." 
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