Tech Law Journal Daily E-Mail Alert
November 1, 2001, 9:00 AM ET, Alert No. 299.
TLJ Home Page | Calendar | Back Issues
House Committee Passes Internet Gambling Funding Bill
10/31. The House Financial Services Committee amended and approved HR 556, the Unlawful Internet Gambling Funding Prohibition Act, by vote of 34 to 18. The bill would attempt to stem illegal Internet gambling by preventing the use of credit cards, wire transfers, and other financial instruments in connection with illegal Internet gambling.
Rep. Mike Oxley (R-OH), the Chairman of the Committee, offered an amendment in the nature of a substitute that was approved on a voice vote. It provides 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 ... (including credit extended through the use of a credit card); (2) an electronic funds transfer ... ; (3) any check ...; or (4) the proceeds of any other form of financial transaction as the Secretary may prescribe by regulation ..."
The bill further provides the "district courts of the United States shall have original and exclusive jurisdiction to prevent and restrain violations". It allows both the U.S. and states to bring actions under the act for injunctive relief. However, the bill states that "No provision of this section shall be construed as authorizing an injunction against an interactive computer service ... unless such interactive computer service is acting in concert or participation with a person who violates this section ..."
Then, the bill provides that "any appropriate Federal banking agency" may issue an order directed to "any insured depository institution" to stop extending credit, electronic funds transfers, or money transmitting service, and to stop paying, transferring, or collecting any check, draft or other instrument, if it has "actual knowledge" of a violation of this act.
Rep. Oxley offered this explanation: "This bill makes nothing legal now that isn't currently so, nor does it make illegal anything that law enforcement does not currently consider unlawful. What it does is make it a crime to accept payment by credit card, check or electronic funds transfer for unlawful Internet gambling transactions, and requires a bank, credit card company or EFT entity to stop payment to a particular named site when ordered by a court to do so."
He continued that "No dramatic shift in business practices is mandated or authorized under this legislation. This bill does not require that banks or credit card companies stop processing all Internet gambling transactions. Rather, institutions must only make a good faith effort to discontinue processing transactions to or from specific unlawful Internet gambling businesses that have been singled out in court orders."
Rep. Michael Castle (R-DE) spoke in opposition to the bill. He stated that it would place too much burden on financial institutions, and not enough on the Justice Department. Rep. Barney Frank (D-MA) opposed the bill on other grounds. He stated that the federal government should not be regulating gambling. "People often spend their money unwisely," said Rep. Frank. "I don't think we should set ourselves up as the household budget manager." Rep. Maxine Waters (D-CA) and Rep. Mel Watt (D-NC) also argued against passage of the bill.
Rep. Jim Leach (R-IA), the sponsor of the bill, stated that "Internet gambling is the single easiest way to launder money". He also made the point that "this is the single biggest privacy vote this committee will ever take". He said the online gamblers give their credit card information to illegal businesses, and do not know what use those entities will make of this information.
Rep. John LaFalce (D-NY) also spoke in favor of the bill. He said that this bill "falls short of providing a definitive prohibition, it offers a number of improvements to current law and may be the strongest bill we can achieve at this time."
USTR Announces Out of Cycle Special 301 Reviews
10/31. U.S. Trade Representative (USTR) Robert Zoellick announced the outcome of "out-of-cycle" Special 301 reviews for the adequacy and effectiveness of intellectual property protection in Malaysia, Costa Rica, and Lithuania. Malaysia was moved from the Priority Watch List to the Watch List. Costa Rica was maintained on Priority Watch List. Lithuania was maintained on the Watch List. See, USTR release.
Section 301 is the statutory means by which the United States asserts its international trade rights, including its rights under WTO Agreements. In particular, under the "Special 301" provisions of the Trade Act of 1974, the USTR identifies trading partners that deny adequate and effective protection of intellectual property or deny fair and equitable market access to U.S. artists and industries that rely upon intellectual property protection. Placement on the Watch List or Priority Watch List indicates that a country does not provide an adequate level of protection.
Zoellick stated that "Pirating U.S. intellectual property is theft. It cheats Americans and hurts those countries that need strong IP protection to promote investment, innovation, and technology in the marketplace." He added that "We are gratified that some countries have made progress and are showing a commitment to sustained enforcement. For example, in the last year pirated products are harder to find in Malaysia, and the thieves are moving out. Strong legislation regarding optical disks has been passed and is being implemented largely on schedule. The Malaysian Government campaign to stamp out piracy has been steady, and they have given us no reason to believe that the progress will not continue."
See also, International Intellectual Property Alliance release [PDF].
Rep. Boehlert Discusses Computer Security
10/31. Rep. Sherwood Boehlert (R-NY), Chairman of the House Science Committee, moderated a "webchat" with representatives of companies that address computer security. The participants were Paul Kurtz (National Security Council), John Conlin (Vericept), Peter Tippett (TruSecure Corp.), Bob Brennan (Connected Corp.), Randy Sandone (Argus Systems Group), Buky Carmeli (SpearHead Security Technologies), and Joe Magee (Top Layer Networks, Inc.).
Rep. Boehlert stated that "What the recent anthrax attacks and the attacks of September 11 have in common is that they turn our own basic systems of daily connections against us -- in those cases, our postal system and our transportation system. Turning our computer systems against us would seem to be a logical extension of that mode of operation. And, as we noted last week, we are more and more reliant on those computer networks."
Rep. Armey Says House Will Insist on Two Year Extension of Net Tax Ban
10/31. House Majority Leader Dick Armey (R-TX) released a statement regarding legislation to extend the Internet tax moratorium. The House passed HR 1552, a bill that provides a two year extension, on October 10, 2001. The Senate has not acted. The moratorium expired on October 21.
Rep. Armey stated that "The Senate should immediately take up and pass the two-year extension passed by the House." He added that the House bill already marks a significant compromise. We will not consider anything less than the clean, two-year extension we passed."
"If the Senate continues to refuse to take up and pass the House bill as-is, the conclusion is obvious," said Rep. Armey. "The Senate wants to tax the Internet."
Bill Limits Collection of Personal Data by Government Web Sites
10/31. The House passed the conference report on HR 2590, the appropriations bill for the Treasury Department, U.S. Postal Service, the Executive Office of the President, and certain Independent Agencies for FY 2002. Section 638 of the bill contains a limitation on the use of web sites by government agencies to collect personally identifying information. The vote was 339 to 85.
Section 638 provides that "None of the funds made available in this or any other Act may be used by any Federal agency (1) to collect, review, or create any aggregate list, derived from any means, that includes the collection of any personally identifiable information relating to an individual's access to or use of any Federal Government Internet site of the agency; or (2) to enter into any agreement with a third party (including another government agency) to collect, review, or obtain any aggregate list, derived from any means, that includes the collection of any personally identifiable information relating to an individual's access to or use of any nongovernmental Internet site."
However, this section also provides exceptions for "any voluntary submission of personally identifiable information", "any action taken for law enforcement, regulatory, or supervisory purposes, in accordance with applicable law" and "any ... system security action taken by the operator of an Internet site and is necessarily incident to the rendition of the Internet site services or to the protection of the rights or property of the provider of the Internet site."
People and Appointments
10/31. Thomas Pickard, the Deputy Director of the FBI, will retire at the end of November. Pickard, 50, has been overseeing the investigations into the "Pentbom" terrorist attacks of September 11 and the anthrax mailings. See, FBI release.
10/31. Richard Smith, CTO of the Privacy Foundation, will leave, effective November 1, to become an independent security consultant.
10/29. David Cohen joined the Washington DC law firm of Wilmer Cutler & Pickering as counsel in the firm's Litigation Section. He was previously Acting Deputy General Counsel and Associate Deputy General Counsel with the Department of the Treasury. He will specialize in complex civil and white collar criminal defense, including representing financial institutions in enforcement matters, money laundering issues, and internal and congressional investigations. See, release [PDF].
10/31. Peter Bonfield, Chief Executive of BT Group, will stand down at the end of January 2002. See, BT release.
10/31. The Board of Directors of Qwest Communications extended the employment contract of Chairman and CEO Joseph Nacchio through December 31, 2005. See, Qwest release.
FCC Common Carrier Bureau Announces Appointments
10/31. Eric Einhorn was named Deputy Division Chief of the Accounting Policy Division of the FCC's Common Carrier Bureau. Before joining the FCC in 1999, he was an associate at the law firms of Swidler Berlin and Cadwalader Wickersham & Taft. See, FCC release.
10/31. John Stanley was named Assistant Division Chief of the Policy and Program Planning Division of the FCC's Common Carrier Bureau. Before joining the FCC in 1999, he worked at the law firm of Wiley, Rein & Fielding. See, FCC release.
10/31. Tamara Preiss was named Chief of the Competitive Pricing Division of the FCC's Common Carrier Bureau. Before joining the FCC in 1997, she worked for the law firm of Sidley & Austin. See, FCC release.
10/31. Deena Shetler was named Deputy Chief of the Competitive Pricing Division of the FCC's Common Carrier Bureau. Most recently, she was a Legal Advisor to former Commissioner Gloria Tristani on common carrier matters. Before joining the FCC in 1996, she was an antitrust and commercial litigation associate at the law firm of Howrey & Simon. See, FCC release.
10/31. Jack Zinman was named Deputy Chief of the Competitive Pricing Division of the FCC's Common Carrier Bureau. See, FCC release.
More News
10/31. U.S. Secretary of Commerce Don Evans met with Romanian Prime Minister Adrian Nastase. Afterwards Sec. Evans released a statement in which he said that "I fully support the new partnership between Qualcomm, of San Diego, California, and the Government of Romania for the standardization and implementation of Code Division Multiple Access (CDMA) wireless technology in that country."
10/24. Assistant Secretary of Stated Anthony Wayne gave a speech to the Global Business Forum in Washington DC titled "The Administration's International Economic Policies." He stated that "the President must have Trade Promotion Authority."
10/30. Sen. Larry Craig (R-ID) and others introduced S 1588, a bill to provide a one year extension of the date for compliance by certain covered entities with the administrative simplification standards for electronic transactions and code sets issued in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Sen. Craig stated in the Senate that this bill "includes language to clearly differentiate between this provision and the privacy provision of HIPAA. It was our intention all along that the medical privacy regulations not be affected by our legislation, and we believe this bill accomplishes that goal."
10/30. The U.S. Court of Appeals (FedCir) issued opinions in Special Devices v. OEA (Nos. 01-1053 and 01-1078) and Special Devices v. OEA (No. 01-1201). In the former opinion, issued on October 26, the Appeals Court held that OEA's U.S. Patent 5,404,263 is invalid under the on-sale bar of 35 U.S.C. 102(b). In the later opinion, issued on October 30, the Appeals Court dismissed for lack of jurisdiction appeals from the District Court's holding that the underlying patent infringement suit was exceptional, thus justifying an award of attorney fees. These are both appeals from the U.S. District Court for the Central District of California, Judge Dickran Tevrizian presiding.
10/31. The U.S. Court of Appeals (10thCir) issued its opinion in Craig Neon Inc. v. Trent McKenzie, a case involving the Oklahoma Uniform Trade Secrets Act.
Thursday, Nov 1
9:00 AM - 5:00 PM. National Institute of Standards and Technology (NIST) will hold first session of a two day workshop to discuss the development of cryptographic key management guidance for federal government applications. Location: Administration Building (Bldg. 101), Lecture Room A, National Institute of Standards and Technology, Gaithersburg, MD. See, notice in Federal Register, June 27, 2001, Vol. 66, No. 124, at Page 34155.
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in MCI WorldCom v. FCC, No. 00-1406. Judges Edwards, Williams and Randolph will preside. Location: 333 Constitution Ave., NW, Washington DC.
10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a legislative hearing on HR 2417, the Dot Kids Domain Name Act of 2001. The witnesses will be Nancy Victory (NTIA chief), David Hernand, (CEO of Neu.Net) Page Howe (P/CEO of KidsDomain), Bruce Taylor (President and Chief Counsel of the National Law Center for Children and Families), Donna Hughes (former COPA Commissioner). Location: Room 2123, Rayburn Building.
10:00 AM. The Senate Judiciary Committee has scheduled an executive business meeting. The agenda includes consideration one nominee for the Court of Appeals, Edith Clement (5th Circuit), and five nominees for the U.S. District Court, Christina Armijo (New Mexico), Karon Bowdre (Northern District of Alabama), Stephen Friot (Western District of Oklahoma), Larry Hicks (Nevada), and Terry Wooten (South Carolina). Location: Room 226, Dirksen Building.
11:00 AM. Rep. Bob Goodlatte (R-VA) will hold a press conference to announce the introduction of legislation "to combat the increasing problems of illegal gambling and update gambling statutes to keep pace with new technologies". Location: Room 2226, Rayburn Building.
12:00 NOON - 2:00 PM. The ABA Antitrust Section Intellectual Property Committee will host a brown bag lunch on intellectual property issues. The speakers will be Alden Abbott (FTC's Bureau of Competition), Susan Creighton (FTC's Bureau of Competition), Hewitt Pate (DOJ's Antitrust Division), and Howard Morse (ABA). RSVP to Rachelle Brown at goldenbr@dbr.com. Location: Drinker Biddle & Reath, 1500 K Street, NW, Suite 1100, Washington DC.
2:00 - 4:00 PM. The U.S. International Telecommunication Advisory Committee (ITAC) will hold a meeting regarding preparations for the 2002 World Telecommunication Development Conference (WTDC). See, notice in Federal Register. Location: State Department, Room 1408.
2:00 PM. The Senate Committee on Environment and Public Works will hold a hearings to examine infrastructure security, chemical site security, and economic recovery. Location: Room 406, Dirksen Building.
2:30 PM. The Senate Commerce Committee will hold a hearing on the nomination of Arden Bement to be Director of the National Institute of Standards and Technology (NIST). Sen. Ron Wyden (D-OR) will preside. Location: Room 253, Russell Building.
4:00 PM. The Cato Institute will host a forum on the book Rebels on the Air: An Alternative History of Radio in America. The speaker will be Jesse Walker (author) and Tom Hazlett (American Enterprise Institute). Reception to follow. See, Cato notice. Location: The Cato Institute, 1000 Massachusetts Avenue, NW, Washington DC.
Friday, Nov 2
9:00 AM - 5:00 PM. National Institute of Standards and Technology (NIST) will hold second session of a two day workshop to discuss the development of cryptographic key management guidance for federal government applications. Location: Administration Building (Bldg. 101), Lecture Room A, National Institute of Standards and Technology, Gaithersburg, MD. See, notice in Federal Register.
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in COMSAT v. FCC, No. 00-1458. Judges Edwards, Williams and Randolph will preside. Location: 333 Constitution Ave., NW, Washington DC.
9:30 AM. The Center for Digital Democracy will hold a press conference titled "The Future of the Internet". For more information, contact Jeffrey Chester at 202 232-2234. Location: First Amendment Room, National Press Club.
12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Practice Committee will host a luncheon titled "Secondary Markets: FCC Initiatives on Promoting the Lease of Spectrum." The speaker will be William Kunze, Chief of the Commercial Wireless Division. The price to attend is $15. RSVP to Wendy Parish no later than Tuesday, October 30. Location: Sidley & Austin, 1501 K Street, NW, Rm 6-E, Washington DC.
Monday, Nov 5
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in Teledesic v. FCC, No. 00-1466. Judges Edwards, Williams and Randolph will preside. Location: 333 Constitution Ave., NW, Washington DC.
10:00 AM. The FCC's Technological Advisory Council will hold a meeting. See, notice in Federal Register. Location: FCC, 445 12th St., SW., Room TW-C305, Washington DC.
Status conference in USA v. Microsoft.
9:30 AM - 5:30 PM. Day one of a three day conference and exhibition hosted by the NIST and NISO titled "4th annual Electronic Book Conference". See, Nov. 5 agenda. The price to attend is $400. See, registration page. Location: Ronald Reagan Building, 1300 Pennsylvania Ave., NW, Washington DC.
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: 2,244.
Contact: 202-364-8882; E-mail.
P.O. Box 15186, Washington DC, 20003.
Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2001 David Carney, dba Tech Law Journal. All rights reserved.