Tech Law Journal Daily E-Mail Alert
November 30, 2001, 9:00 AM ET, Alert No. 318.
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House Committee Holds Hearing on Internet Gambling Bills
11/29. The House Judiciary Committee's Subcommittee on Crime held a hearing on HR 556, the Unlawful Internet Gambling Funding Prohibition Act, and HR 3215, the Combating Illegal Gambling Reform and Modernization Act.
HR 3215 -- Goodlatte Bill. This bill was introduced by Rep. Bob Goodlatte (R-VA) on November 1, 2001, and now has 115 cosponsors. The bill would amend 18 U.S.C. §§ 1081 and 1084, which contain the definitions and prohibition, respectively, of the Wire Act. The Wire Act currently criminalizes the use of "wire communications facilities" in interstate commerce for gambling. The Wire Act does not ban gambling. This is a matter of state law. The Goodlatte bill expands the prohibition to cover all communications between states or with other foreign countries. It maintains the principle that gambling is otherwise a matter of state law. Hence, under the Goodlatte bill, use of the Internet for gambling purposes would become illegal (if interstate or foreign). This hearing was the first hearing on his bill. However, Rep. Goodlatte sponsored similar bills in prior Congresses.
HR 556 -- Leach Bill. This bill was introduced by Rep. Jim Leach (R-IA) on February 12. It was approved by the House Financial Services Committee on October 31 by a vote of 34 to 18. However, the House Judiciary Committee also has jurisdiction. This 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.
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".
Hearing Testimony. Reps. Goodlatte and Leach both testified at the hearing. They covered the risks of Internet gambling, including increased bankruptcies, money laundering, and identity theft. Another witness, Timothy Kelly, the former Executive Director of the National Gambling Impact Study Commission, testified regarding the social consequences of Internet gambling, including crime, addiction, pathological gambling, and broken families. See, prepared statements of Goodlatte and Kelly.
Frank Catania testified on behalf of the Interactive Gaming Council. He opposed the two bills, and called on Congress to regulate Internet gambling, rather than pass prohibitions. See, prepared statement [PDF]. Rep. Goodlatte responded that it would be "totally impossible" for the U.S. to regulate Internet gambling, since almost all Internet gambling operations are located outside of the United States. Rep. Bobby Scott (D-VA), the ranking Democrat on the Subcommittee, also spoke critically of the two bills.
Rep. Lamar Smith (R-TX) presided; he called Internet gambling a "growing and serious problem". Rep. Steve Chabot (R-OH) asked about the affect of the two bills on charities that raise money through gambling. Timothy Kelly responded that states would still have the authority to make such activities legal. Rep. Howard Coble (R-NC) and Rep. Sheila Lee (D-TX) also participated.
Justice Department Support. Michael Chertoff, the Assistant Attorney General in charge of the Criminal Division at the Justice Department submitted prepared testimony. He wrote this: "The Justice Department believes that it is important to update existing federal law to cover gambling over emerging technologies, such as the Internet and wireless communication media. Given the extent to which the Internet gambling industry has flourished, it is clear that technology has far outpaced current law. In that regard, the Department strongly believes that federal law should be technology neutral. Congressman Goodlatte's bill, H.R. 3215, would update current law in a technology neutral manner."
He continued that "We support that approach. In conclusion, unlawful Internet gambling continues to be a serious problem. Both Congressman Goodlatte's bill and H.R. 556 offer useful approaches to combating this problem. While we have some technical and other concerns about both of these bills – which we intend to communicate to you in the near future, following additional interagency consultations – we support their sponsors’ efforts to address gambling on the Internet."
Chertoff did not attend the hearing; as head of the Criminal Division, he is taking a lead role in the war on terrorism. His testimony marks a shift in position. Under the Clinton administration the DOJ had opposed Rep. Goodlatte's prior bills. However, Rep. Goodlatte's prior bills would have created a new ban on Internet gambling, rather than amended the Wire Act to make it technology neutral.
ISP Immunity. The Goodlatte bill provides that "No relief requiring the blocking of websites may be granted under paragraph (1) against an interactive computer service (as defined in section 230(f) of the Communications Act of 1934), unless the service is acting in concert with a person who is violating the law and the service receives actual notice of the relief." Similarly, the Leach bill provides 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 ..."
CDT Criticizes GovNet Plans
11/19. The Center for Democracy and Technology (CDT) submitted a comment to the General Services Administration (GSA) regarding the planned government intranet known as GovNet. The CDT stated that if GovNet is over utilized, then "important public information and meetings that should take place on the Internet will be held in secret". It also stated that "the model will encourage similar efforts for companies, governments and organizations thus sapping important resources from the public Internet".
CDT also wrote that, on the other hand, if GovNet is under utilized, then "vast public resources that could have gone to create research and services to better secure Internet services will have gone to waste".
On October 10, the GSA issued an RFI [MS Word] titled "Request for Information for a Government Network Designed to Serve Critical Government Functions (GOVNET)". This RFI states that "GOVNET will be a private Internet Protocol (IP) network shared by government agencies and other authorized users only.  GOVNET will provide connectivity among users to a defined set (to be determined) of service delivery points.
The RFI also asserts that "There will be no interconnections or gateways to the Internet or other public or private networks" and that "GOVNET will support critical government functions and will be immune from malicious service and/or functional disruptions to which the shared public networks are vulnerable".
FBI Issues Warning Re MSIE
11/29. The FBI's National Infrastructure Protection Center (NIPC) issued a warning titled "Multiple Vulnerabilities in Microsoft Internet Explorer -- All Versions". It addresses two vulnerabilities "that are primary means through which several generations of recent mass mailer computer worms ... propogate." See, Assessment No. 01-028.
GAO Reports on Online Procurement
11/29. The GAO released a report [PDF] titled "Electronic Commerce: Small Business Participation in Selected On-line Procurement Programs". The GAO examined a sample of three federal online purchasing programs. It found that "For the three federal on-line procurement programs we reviewed, the dollar share of awards to small businesses exceeded the overall small business share of total federal contract dollars awarded in fiscal years 2000 and 1999."
Nevertheless, the GAO wrote that "officials from organizations representing or working with small businesses, as well as related literature, still report that such businesses face obstacles in conducting electronic procurements with the government." The report was prepared at the request of Sen. Christopher Bond (R-MO), the ranking Republican on the Senate Committee on Small Business and Entrepreneurship.
FCC Amends Rules Re Filings
11/29. The FCC announced that it has "amended its procedural rules on an emergency, interim basis to require the filing or refiling of certain documents electronically (i.e., by facsimile or e-mail as described below), by overnight delivery service (i.e. other than U.S. Postal Service Express and Priority Mail), or by hand delivery to the Commission's Capitol Heights, Maryland location." The FCC elaborated that it has been "unable to confirm receipt of certain Commission filings that may affect processing of applications and other urgent agency business." See, FCC release.
Tauzin Dingell Bill News
11/29. The USTA, a group that represents the Bell phone companies, issued a release in which it stated that it will run another ad campaign in the Washington DC area in support of HR 1542, the Tauzin Dingell bill.
This bill has been stalled in the House since being reported adversely by the House Judiciary Committee on June 18. While the bill could be brought to the House floor before the end of the 2001 session, it faces opposition in the Senate, including from Sen. Ernest Hollings (D-SC), Chairman of the Senate Commerce Committee.
SEC Chairman Addresses Internet and Market Information
11/29. SEC Chairman Harvey Pitt gave a speech in Washington DC to the Consumer Federation of America Financial Services Conference in which he addressed the role of the Internet in providing investors information about the market.
He stated that "Technology will play a very exciting role in the process of furnishing more, better, current and understandable information to investors. The Internet is capable of disseminating critical information quickly. It is inherently customized: users can find as much or as little information as they want and quickly."
He continued that "In rethinking our existing disclosure system, we need to use technology to put user friendly information into investors' hands more promptly. The Internet enables us to keep our current periodic disclosures as hyperlinks from new, summary and trend defining, disclosure reports."
"We are searching for a Chief Technology Officer to advise us on many issues, including using technology to simplify disclosure documents without sacrificing any part of the wealth of information investors already receive."
He concluded that "Cyberspace has made it increasingly easier for individual investors to go out and look for timely information. This is both a blessing and a curse. Unfortunately, we all have witnessed the willingness of otherwise thoughtful people to believe what they read on unverified websites and unregulated Internet bulletin boards: claims of sure things by individuals who probably were (or could have been) snake oil salesmen in prior lives. Small investors are easy prey for cyberspace sharpshooters who spread disinformation, or use their virtual pulpits to promote the sale of their own holdings at a profit. While there always will be people who allow dreams of untold wealth to distort their better judgment, we have redoubled our efforts to protect investors from fraud and manipulation."
Senate Finance Committee Passes Andean Trade Bill
11/29. The Senate Finance Committee approved S 525, a bill to extend the Andean Trade Preferences Act, by voice vote, with amendments. This bill extends and expands a preferential trade program for Bolivia, Peru, Ecuador and Colombia. The House passed a different version of the bill, HR 3009, on November 16.
Intellectual Property Rights. Both versions of the bill provide that the President designates which counties are beneficiaries of the Andean Trade Preferences Act, taking into consideration several criteria, including "Whether the beneficiary country has demonstrated a commitment to ... undertake its obligations under the WTO", and "The extent to which the country provides protection of intellectual property rights consistent with or greater than the protection afforded under the Agreement on Trade Related Aspects of Intellectual Property Rights described in section 101(d)(15) of the Uruguay Round Agreements Act."
CompTel Writes USTR Re Telecom Provisions in FTAs
11/29. Carol Ann Bischoff, EVP & General Counsel of CompTel, sent a letter to USTR Robert Zoellick regarding telecommunications principles in free trade agreements being negotiated by the USTR. See, CompTel release.
Specifically, the letter states that CompTel supports inclusion in the Free Trade Agreements (FTAs) being negotiated with Chile and Singapore of "obligations requiring interconnection, unbundled access to incumbents’ network elements, timely provisioning and (where there is no effective competition) cost based pricing of incumbents' leased circuits, collocation at cost based rates, resale at appropriate wholesale rates, and access to rights of way. The FTAs should also contain requirements that ensure effective enforcement of the pro-competitive measures by an independent regulator, as such measures are of little value if they are not implemented. Finally, the FTAs should ensure that U.S. service providers are able to access and use the public telecommunications networks and services of our trading partners on a non-discriminatory basis."
Trade Promotion Authority
11/28. Rep. David Dreier (R-CA) spoke in the House about trade promotion authority, which is also known as fast track. He stated that "a week from tomorrow, we in this House are going to be voting on the very important trade promotion authority that the President of the United States needs. The administration has not had it, the past administration did not have it, it expired in 1994; and because of the fact that it was not there and has not been there, we have been a party to only 2 of the 130 free trade agreements that have been established worldwide in the last several years, basically meaning that the United States of America has ceded its very important leadership role when it comes to global economic growth." See, Cong. Rec., Nov. 28, 2001, at H8429. Rep. Sherrod Brown (D-OH) spoke in opposition to TPA. See, page H8552.
Representatives Introduce TAA Bill
11/28. Rep. Ken Bentsen (D-TX) and Rep. Anna Eshoo (D-CA) introduced HR 3359, the Trade Adjustment Assistance for Workers, Farmers, Communities, and Firms Act of 2001, a bill to amend the Trade Act of 1974 with respect to trade adjustment assistance programs, and to provide assistance for trade affected communities. It was referred to the House Ways and Means Committee.
This bill is the House version of S 1209, which was introduced in the Senate on July 19 by Sen. Jeff Bingaman (D-NM), Sen. Max Baucus (D-MT), and Sen. Tom Daschle (D-SD). Rep. Bentsen submitted a statement for the Congressional Record (at page E2156) in which he said that "proponents of trade liberalization turn a blind eye toward those sectors of our economy which do not benefit, especially our workers." He added that under his bill, "workers are eligible for up to 52 weeks of income support, provided they are enrolled in re-training. The program also provides job search and relocation assistance."
Criminal Copyright Infringement
11/27. A grand jury of the U.S. District Court (NDCal) returned an indictment [PDF] against Eric Niemi charging criminal copyright infringement in violation of 17 U.S.C. § 506(a)(1) and 18 U.S.C. § 2319(b)(1) in connection with the sale through eBay auctions of counterfeit copies of Adobe programs. He was also charged with mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343).
Niemi was previously charged by criminal complaint [PDF] on July 20. Scott Frewing and Lauri Gomez are prosecuting the case. This is D.C. Case No. CR 01-20179.
More News
11/29. The House passed HR 3210, the Terrorism Risk Protection Act, on a largely party line vote of 227 to 193. See, Roll Call No. 464.
11/29. The Senate Judiciary Committee approved S 986, a bill to allow electronic media coverage of court proceedings.
11/26. Verizon submitted a Section 271 application to provide in region inter LATA service in Rhode Island. See, FCC release [PDF] and Verizon release. (CC Docket No. 01-324.)
11/29. President Bush gave a speech in Washington DC to U.S. Attorneys in which he discussed the war on terrorism. He also defended his decision to use military tribunals for foreign terrorists. He stated: "I have also reserved the option of trial by military commission for foreign terrorists who wage war against our country. Non citizens, non-U.S. citizens who plan and/or commit mass murder are more than criminal suspects. They are unlawful combatants who seek to destroy our country and our way of life. And if I determine that it is in the national security interest of our great land to try by military commission those who make war on America, then we will do so." He added that "we must not let foreign enemies use the forums of liberty to destroy liberty, itself."
11/29. Sen. Patrick Leahy (D-VT), Chairman of the Senate Judiciary Committee, scheduled a series of hearings for next week to provide a forum for critics of President Bush's use of military tribunals, and other anti terrorism policies. In addition to the use of military tribunals, Sen. Leahy has criticized detention practices, and policy regarding the monitoring of attorney client communications of certain terrorists.
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Friday, Nov 30
8:00 AM - 5:00 PM. Day two of a two day meeting of the National Science Foundation's Advisory Committee for Cyber Infrastructure. See, notice in Federal Register, November 16, 2001, Vol. 66, No. 222, at Page 57743. Location: Room 1150, National Science Foundation, 4201 Wilson Boulevard, Arlington, VA.
9:00 - 10:00 AM. The Electronic Privacy Information Center (EPIC) will host a panel discussion titled "Security or Surveillance II". The topics will include "the technical reliability and privacy implications of new security systems and legal measures being considered both domestically and internationally since September 11." The participants will be Bruce Schneier (Counterpane Internet Security), Simon Davies (Privacy International), Chris Hoofnagle (EPIC), and Marc Rotenberg (EPIC). See, agenda. For more information, contact Sarah Andrews at andrews or 202 483-1140 ext 107. Location: National Press Club, First Amendment Lounge, 529 14th St. NW, 13th Floor.
9:00 AM - 5:00 PM. The FCC's Consumer Disability Telecom Advisory Committee will host a meeting titled "The State of the Telecom Act of 1996: Has It Benefitted Consumers and Where Do We Go From Here?" Location: FCC, 445 12th Street, SW, Room TW-C305.
10:00 AM - 12:00 NOON. The American Enterprise Institute (AEI) will host a panel discussion titled "The PCS C Block Mess: The FCC as Auctioneer and Banker". The panelists will be Robert Hahn (AEI Brookings), Rudy Baca (Precursor Group), Harold Furchtgott- Roth (AEI), George Reed- Dellinger (Washington Analysis), John Thorne (Verizon), and Thomas Hazlett (AEI). See, online registration page. Location: AEI, Wohlstetter Conference Center, Twelfth Floor, 1150 17th Street, NW.
11:30 AM. FCC Chairman Michael Powell will speak at the ALTS Business Conference 2001. Location: Crystal City Marriott, Salon B, 1700 Jefferson Davis Highway, Arlington, VA.
Deadline to submit comments to the Federal Trade Commission (FTC) in its a notice of proposed rulemaking (NPRM) regarding extending its Children's Online Privacy Protection Rule. It proposes to extend the time period during which web site operators may use an e-mail message from the parent, coupled with additional steps, to obtain verifiable parent consent for the collection of personal information from children for internal use by the web site operator. The current rule expires on April 21, 2002. The FTC proposes to extend this until April 21, 2004. See, FTC release and notice.
Deadline to submit comments to the Bureau of Export Administration (BXA) regarding its annual review of the foreign policy based export controls in the Export Administration Regulations to determine whether they should be modified, rescinded, or extended. See, for example, Export Administration Regulations (EAR), Section 742.12, pertaining to high performance computers. See, BXA notice.
Monday, Dec 3
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Datapoint Corporation v. Standard Microsystems, No. 99-1239, and Charles E. Hill & Associates v. Compuserve, No. 00-1562. Location: Courtroom 402, 717 Madison Place, NW.
12:30 PM. Ivan Seidenberg, P/CEO of Verizon will deliver a luncheon address. Location: Ballroom, National Press Club, 529 14th St. NW, 13th Floor.
Deadline to submit comments to the Federal Election Commission (FEC) regarding its proposed rule changes affecting political activity on the Internet. The FEC is the agency charged with enforcing the Federal Election Campaign Act (FECA), which regulates political contributions and expenditures. While the FEC had previously considered wide ranging regulation of political speech on the Internet, this NPRM merely proposes to permit certain personal political web sites, and to allow corporations and unions to put certain hyperlinks and press releases in their web sites. See, TLJ story of September 27, 2001. See also, FEC release, and notice in the Federal Register.
Tuesday, Dec 4
Day one of a two day conference hosted by the Business Software Alliance (BSA) titled "Global Tech Summit." See, agenda. Location: Omni Shoreham Hotel, 2500 Calvert Street, NW.
LOCATION CHANGE. 9:00 AM - 5:00 PM. There will be an interagency public workshop on Gramm Leach Bliley (GLB) Act privacy notices. A joint announcement states that the "workshop will provide a forum to identify successful GLB Act privacy notices, discuss strategies for communicating complex information, and encourage industry self regulatory efforts and consumer and business education." The participating agencies are the FTC, Board of Governors of the Federal Reserve System, CFTC, Treasury Department, Comptroller of the Currency, Office of Thrift Supervision, FDIC, National Credit Union Administration, and the SEC. See, also FTC page on workshop. Location: FTC, 600 Pennsylvania Avenue, NW, Room 432. Ronald Reagan Building and International Trade Center.
9:00 AM. Bureau of Export Administration's (BSA) Regulations and Procedures Technical Advisory Committee (RPTAC) will hold a meeting. It will be partly open and partly closed. The open agenda includes an update on Wassenaar Arrangement and a review of encryption regulations. See, notice in Federal Register, November 19, 2001, Vol. 66, No. 223, at Page 57934. Location: Room 3884, Herbert Hoover Building, 14th Street between Constitution and Pennsylvania Avenues, NW.
9:00 AM - 5:00 PM. Day one of a three day meeting of NIST's Computer System Security and Privacy Advisory Board (CSSPAB). See, notice in Federal Register, November 21, 2001, Vol. 66, No. 225, at Page 58438. Preregistration is required to attend; to register, contact Elaine Frye by November 30, 2001, at or 301 975-2819. Location: NIST, Administration Building, Lecture Room B, in Gaithersburg, Maryland.
10:00 AM. The Senate Judiciary Committee will hold another hearing in its ongoing series of hearings titled "DOJ Oversight: Preserving Our Freedoms While Defending Against Terrorism." This hearing is began on December 28. It is scheduled to continue at 2:00 PM, again at 10:00 AM on December 5, and again at 10:00 AM on December 6. Attorney General John Ashcroft is scheduled to testify. Location: Room 226, Dirksen Building.
2:00 PM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "The Status of Competition in the Multi Channel Video Programming Distribution Marketplace." Location: Room 2123, Rayburn Building.
Wednesday, Dec 5
Day two of a two day conference hosted by the Business Software Alliance (BSA) titled "Global Tech Summit." See, agenda. Location: Omni Shoreham Hotel, 2500 Calvert Street, NW.
The Supreme Court of the United States will hear oral argument in Verizon Maryland v. Public Service Commission of Maryland, Nos. 00-1531 and 00-1711.
9:00 AM - 5:00 PM. Day two of a three day meeting of NIST's Computer System Security and Privacy Advisory Board (CSSPAB). See, notice in Federal Register. Preregistration is required to attend; to register, contact Elaine Frye by November 30, 2001, at or 301 975-2819. Location: NIST, Administration Building, Lecture Room B, in Gaithersburg, Maryland.
10:00 AM. The Senate Judiciary Committee will hold another hearing in its ongoing series of hearings titled "DOJ Oversight: Preserving Our Freedoms While Defending Against Terrorism." Location: Room 106, Dirksen Building.
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.
10:00 AM. The Senate Judiciary Committee will hold a hearing on pending nominations, including Callie Granade (to be U.S. District Judge for the Southern District of Alabama), Marcia Krieger (U.S. District Judge for the District of Colorado), James Mahan (U.S. District Judge for the District of Nevada), Philip Martinez (U.S. District Judge for the Western District of Texas), and Ashley Royal (U.S. District Judge for the Middle District of Georgia). Sen. Dick Durbin (D-IL) will preside. Location: Room 226, Dirksen Building.
12:15 PM. The Federal Communications Bar Association's (FCBA) Cable Practice Committee will host a luncheon. The speaker will be Barbara Esbin, Associate Bureau Chief, FCC Cable Services Bureau. The price to attend its $15. RSVP to Wendy Parish. Location: NCTA, 1724 Massachusetts Avenue, NW.
12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch. The topic will be "Meet the Mass Media Trade Press". RSVP to: Barry Umansky. Location: NAB, ground floor conference room, 1771 N Street, NW.
1:00 - 3:00 PM. The FCC's International Bureau will hold a roundtable discussion on the Bureau's Electric Filing System (IBFS). Location: FCC, Room 6B516, 445 12th Street, SW.
2:00 - 5:00 PM. Day one of a two day open business meeting of the U.S. National Commission on Libraries and Information Science. See, notice in Federal Register. Location: Conference Room, NCLIS Office, 1110 Vermont Avenue, NW., Suite 820.
People and Appointments
11/28. The Senate confirmed Randall Kroszner to be a Member of the Council of Economic Advisers.