|President Bush Releases
Proposed Budget for FY 2003
|2/4. President Bush released his proposed budget for fiscal
year 2003. It includes large increases for national defense
and homeland security related programs, with modest increases
for most other departments and agencies. However, the
President's proposal contains large increases for many tech
related agencies. See, Office of Management and Budget (OMB) web page
with links to various budget documents.
President Bush stated in his budget
message to the Congress that "The 2003 Budget
requests the biggest increase in defense spending in 20 years,
to pay the cost of war and the price of transforming our Cold
War military into a new 21st Century fighting force. We have
priorities at home as well -- restoring health to our economy
He added that "The plan also calls for maintaining low
tax rates, freer trade, restraint in government spending,
regulatory and tort reform, promoting a sound energy policy,
and funding key priorities in education, health, and
compassionate social programs." He also stated that his
budget "moderat[es] the growth of spending in the rest of
government", but "offer[s] substantial increases in
spending for ... science and technology research ..."
Independent Agencies. The FTC, which has both antitrust
and consumer protection authority, would see its budget
increase from $156 Million to $177 Million. The FCC's budget
would increase $33 Million to $278 Million. The SEC budget
would grow to $481 Million.
Commerce. There would also be some large increases at
the Department of Commerce's
tech related offices. The USPTO's budget would increase 21%;
however, total estimated user fees collected would once again
exceed the appropriation. The NTIA's budget would shrink, due
to the proposed elimination of the Technology Opportunity
Program grants. The BXA's budget would grow from $69 Million
to $103 Million; however, this would be due in large part to a
$20 Million item for the Critical Infrastructure Assurance
Office for homeland security and information intelligence. The
NIST budget would grow from $321 Million to $402 Million. The
Technology Administration would remain at $8 Million.
Justice. The total budget for the Department of Justice would
be increased 13% to $30.2 Billion. The Antitrust Division
would see an increase from $130 to $142 Million.
|FTC Budget Proposal
|2/4. The President's proposal provides an operating budget
of $177 Million for the Federal
Trade Commission (FTC). The FY 2002 appropriation is $156
Million. The FTC is one agency with responsibility for
enforcing antitrust laws. It also has consumer protection
authority, and has become the lead agency for protecting
consumers on the Internet.
The President's proposal
states too that "In 2003, the FTC will expand its
contribution to the Administration’s consumer privacy agenda
by helping victims of ID theft, increasing enforcement and
outreach on children’s online privacy, and increasing
enforcement against “spam.” It will also seek to establish
a national “do not call” list that would protect consumers
from unwanted and intrusive telemarketing calls, and bring
nationwide consistency to the current patchwork of lists
administered by states and the private sector."
|USPTO Budget Proposal
|2/4. The President's budget proposal includes a $239
Million, 21% increase, for the U.S.
Patent and Trademark Office (USPTO), to $1,365 Million.
The proposal also includes an increase in patent and trademark
fees of $207 Million; this is described as a "one time
The President's budget proposal estimates that fees collected
in FY 2003 will total $1,527 Million. The proposed FY 2003
appropriation for the USPTO is $1,365 Million. Hence, the
proposal would continue the long standing practice of
diverting USPTO user fees to fund other government programs.
Opponents of this practice call it a tax on innovation.
The USPTO stated in a release
that the increased budget will enable the USPTO to "Hire
950 patent examiners", "Transform trademarks to a
fully electronic operation by 2004", and "Implement
the President's management agenda, including e-government,
outsourcing, and workforce restructuring." The release
also stated that USPTO's five year business plan, which
contains details of the FY 2003 budget, will be released this
DOC proposal states that "The 2003 Budget funds a
21-percent increase (+$239 million) in resources available to
the U.S. Patent and Trademark Office (USPTO) to address the
agency’s growing workload in the area of intellectual
property. USPTO issues patents and registers trademarks. It
also works to promote the protection of U.S. intellectual
property rights around the world through international
treaties. With the passage of the American Inventors
Protection Act of 1999, USPTO was designated as a
“performance based organization,” which provides the
agency additional management flexibilities while ensuring that
senior managers' tenure and compensation are at risk based
upon their achieving organizational performance targets."
The "one time surcharge" is defined in the President's
detailed DOC proposal [PDF] as follows: "Provided
further, That there shall be a surcharge of 19.3 percent,
rounded by standard arithmetic rules, on all fees authorized
by 35 U.S.C. 41(a) and (b) and a surcharge of 10.3 percent,
rounded in the same manner, on those fees authorized by 15
U.S.C. 1113 that are implemented by 37 C.F.R. 2.6(a)(l),(5)
and (12): Provided further, That these surcharges shall be
effective on October 1, 2002 and shall expire on September 30,
|NTIA Budget Proposal
|4/2. President Bush proposed a reduced budget for the National Telecommunications
and Information Administration (NTIA). However, this is
due to the proposal to eliminate the Technology Opportunities
Program (TOP) grants. These were formerly known as TIIAP
detailed DOC proposal [PDF] states that "Technology
Opportunities Program grants have demonstrated the use of
advanced telecommunications technologies to enhance the
delivery of social services, such as education, health care,
and public safety. This program has fulfilled its mission and
is proposed for termination. 2003 funds and use of
deobligations and unobligated balances are requested for
monitoring existing grants and close-out costs."
The TOP grant program had detractors on Capitol Hill. In
October of 2001, the NTIA's list
of grant winners included a cyber cafe for gang members in
Detroit, a network of surveillance cameras on California
beaches, and a web site containing pictures of artifacts from
Maine. See, TLJ
Daily E-Mail Alert No. 277, Oct. 2, 2001.
DOC proposal also elaborates on other NTIA programs:
"The budget strengthens the spectrum management
capabilities of the National Telecommunications and
Information Administration by providing $3 million to begin
the process of spectrum management reform and to upgrade its
radio quiet zone test facility in Colorado. In addition, the
Administration will propose legislation to streamline the
current process for reimbursing federal agencies that must
relocate from spectrum auctioned to commercial users."
|BXA Budget Proposal
|The President's budget proposal would increase the Bureau of Export Administration
(BXA) budget from $69 Million to $103 Million. The BXA
regulates exports of critical goods and technologies,
including dual use items, such as computer and software, in
order to promote national security, foreign policy, and
economic interests. $20 Million of this proposed increase
would go to the Critical
Infrastructure Assurance Office (CIAO), which works with
government agencies and the private sector in developing a
national plan to reduce the exposure to attack of the nation's
The President's proposal states that "Additional funding
for the CIAO will be used to support the Homeland Security
Information Technology and Evaluation Program. The office will
work in consultation with the Office of Homeland Security to
implement the Information Intelligence Initiative. This
initiative includes technological and procedural improvements
to the process of information sharing to assure broad access
to relevant homeland security information at all levels of
government. The program office is expected to be open for 1 to
The President's proposal would also enable the BXA to open
field offices in U.S. port cities, and in foreign countries,
including in the Middle East.
|DOJ Budget Proposal
|2/4. The President's FY 2003 budget proposal for the Department of Justice (DOJ)
is $30.2 Billion, a 13% increase over FY 2002. Attorney
General John Ashcroft stated in a release
that "The President's budget supports the Department's
reorganization to refocus law enforcement efforts to fight the
war on terrorism."
The President's detailed
DOJ proposal [PDF] provides that the Antitrust Division's
budget would be increased from $130 Million to $142 Million.
|Cato Releases List of 12
Worst Tech Bills
|2/4. Cato Institute
released a study
[PDF] titled "The Digital Dirty Dozen" which ranks
and evaluates the authors' list of the worst high tech
legislative proposals of the current Congress. Wayne Crews,
Cato's Director of Technology Studies, and Adam Thierer,
Cato's Director of Telecommunications Studies, authored the
report. The list is as follows:
1364, the "Telecom Fair Competition Enforcement
Act", sponsored by Sen.
Ernest Hollings (D-SC). This bill would require structural
separation of the Region Bell Operating Companies' retail
operations. The Cato report states that "S. 1364 ranks as
the single most destructive digital economy bill of the year
for a very simple reason: It would do more than any other
piece of legislation to destroy the foundations upon which a
good portion of the digital economy rests. S. 1364 would set
back telecommunications policy 20 years and constitute
possibly the most radical, proregulatory measure to come along
for any American industry in decades."
792 and HR
2246, the "Media Marketing Accountability Act of
2001", sponsored by Sen. Joe Lieberman
(D-CT) and Rep. Steve
Israel (D-NY). These bills would prohibit the targeted
marketing to minors of adult rated media as an unfair or
deceptive practice. Cato calls this "government
512 and HR
1410, the "Internet Tax Moratorium and Equity
Act", sponsored by Sen.
Byron Dorgan (D-ND) and Rep. Ernest Istook
(R-OK). Cato states that these bills would "authorize a
multi-state tax cartel for the purposes of collecting sales
taxes on electronic commerce transactions".
718, the "Unsolicited Commercial Electronic Mail Act
of 2001", sponsored by Rep. Heather Wilson
2724, the "Music Online Competition Act", or
MOCA, sponsored by Rep.
Chris Cannon (D-UT) and Rep. Rick Boucher
(D-VA). The bill provides that recording companies that
license digital music would be required to do so on a
nondiscriminatory basis, offering similar prices and terms to
all. Cato calls this "compulsory licensing".
However, Cato's objection to this bill focuses solely on the
bills requirements regarding nondiscriminatory music
licensing. Cato does not address the bill's proposed changes
to copyright law pertaining to the in store exemption,
consumer back up copies, buffer copies, and ephemeral copies.
See also, Rep. Boucher's summary
of the bill.
6. The "Security Systems Standards and Certification
Act", a bill which has not yet been introduced. This
bill, which may be introduced by Sen. Ernest Hollings (D-SC)
would mandate that digital devices contain copy protection
technology, or digital rights management (DRM) tools, to
protect intellectual property rights. The bill would also make
it illegal to remove or disable the DRM technology.
927 and HR
1837, the "Mobile Telephone Driving Safety Act and
Call Responsibly and Stay Healthy (CRASH) Act", sponsored
by Sen. Jon Corzine
(D-NJ) and Rep. Gary
Ackerman (D-NY). These bills would require states to
prohibit cell phone use while driving.
88 and HR
267, the "Broadband Internet Access Act",
sponsored by Sen. Jay
Rockefeller (D-WV) and Rep. Phil English
(R-PA). These bills would provide tax credits to incent
deployment of broadband Internet access facilities in rural
and underserved areas. The Cato authors concede that this
legislation is likely to pass.
1697 and HR
1698, the "Broadband Competition and Incentives
Act" and the "American Broadband Competition
Act", sponsored by Rep. John Conyers
(D-MI) and Rep. Chris Cannon (R-UT), respectively. These bills
would increase antitrust oversight of the telecom sector.
237, the "Consumer Internet Privacy Enhancement
Act", sponsored by Rep.
Anna Eshoo (D-CA).
556, the "Unlawful Internet Gambling Funding
Prohibition Act", sponsored by Rep. James Leach
(R-IA), and HR
3215, the "Combating Illegal Gambling Reform and
Modernization Act", sponsored by Rep. Bob Goodlatte
(R-VA). Both bills would, among other things, attempt to
prevent the use of credit cards for online gambling.
1531, the "Cell Phone Service Disclosure Act",
sponsored by Rep.
Anthony Weiner (D-NY).
The Cato report concluded that "there is good evidence
that policymakers -- whether through conscious design or not
-- are adopting the telecom regulatory paradigm for the tech
sector. It appears that the tech sector may be pigeonholed
into that paradigm simply because it offers a familiar set of
rules and a bank of regulatory agencies that can be activated
on command. If that happens, it will be a grave blow to the
Internet sector. Policymakers would be wise to reject this
paradigm and instead let the Internet and cyberspace evolve
with minimal federal intrusion and regulatory
|GAO Reports that Treasury
Dept Computers are Vulnerable
|2/4. The General Accounting
Office (GAO) released a report [PDF]
titled "Financial Management Service: Significant
Weaknesses in Computer Controls Continue". The report
found that the computer systems of the FMS, which disburses
trillions of dollars per year, are vulnerable to fraud and
The report states that in FY 2000 the Department of the
Management Service (FMS) "disbursed over $1.9
trillion primarily for Social Security and veterans’ benefit
payments, Internal Revenue Service (IRS) tax refunds, federal
employee salaries, and vendor billings. With several
exceptions (the largest being the Department of Defense), FMS
makes disbursements for most federal agencies. FMS is also
responsible for administering the federal government’s
collections system. In fiscal year 2000, the government
collected over $2 trillion in taxes, duties, and fines. In
addition, FMS oversees the federal government’s central
accounting and reporting systems used to reconcile and keep
track of the federal government’s assets and
The GAO report found that the "FMS's overall security
control environment continues to be ineffective in
identifying, deterring, and responding to computer control
weaknesses promptly. Consequently, billions of dollars of
payments and collections are at significant risk of loss or
fraud, sensitive data are at risk of inappropriate disclosure,
and critical computer based operations are vulnerable to
The report goes on to identify many weaknesses in the FMS's
data centers, including "weak network security
configurations that allowed us to identify user names and
compromise the associated passwords, which resulted in our
gaining unauthorized access to the mainframe production
environment of a key financial application at one data center,
the development environments at another data center, and an
unrelated procurement application at a third data
The report also found that the FMS "granted excessive and
powerful systems privileges to certain users who did not need
such access". It also found that the FMS "did not
effectively manage the administration of certain passwords and
user IDs". In addition, it found that the FMS was
"not effectively monitoring and controlling dial-in
access to certain local area networks and the mainframe
|People and Appointments
|2/4. Thomas Navin was named Deputy Chief of the
Federal Communications Commission's (FCC's) Common Carrier Bureau's
Policy and Program Planning Division. See, FCC
2/4. Megan Gray joined the Washington DC based Electronic Privacy Information
Center (EPIC) as Senior Counsel, and director of an intern
program for law students. She focuses on litigation involving
anonymous free speech. For example, she represented an
anonymous plaintiff in Aquacool v. Yahoo. See, complaint
story. She will begin work in April 2002. She was
previously an associate with the law firm of Baker and
4/1. BT announced the appointment of Ian Livingston as
group finance director. He previously worked as Finance
Director at Dixons Group plc. See, BT
|2/4. The Federal Communications Commission (FCC) set comment
deadlines in the matter of Ambient's application for a
determination that it is an exempt telecommunications company.
It is an electric power company that also provides broadband
Internet access and related information services over power
lines to electrical outlets in residences. Comments are due by
February 19, 2002. Reply comments are due by February 26,
2002. See, FCC
2/4. Monday, February 4, was the deadline to submit petitions
and comments to the FCC's Cable
Services Bureau regarding the applications of Hughes
Electronics Corporation and EchoStar Communications
Corporation to the FCC requesting consent to the transfer of
control of licenses and authorizations involved in the
EchoStar DirecTV merger. See, FCC notice
[MS Word]. Oppositions and responses are due by February 25,
2002. This is CS Docket No. 01-348. See, the FCC's Search
for Filed Comments page.
|About Tech Law Journal
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Contact: 202-364-8882; E-mail.
P.O. Box 4851, Washington DC, 20008.
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All
|Bush Budget Addresses
|2/4. President Bush's proposed budget contains information
regarding spectrum management policy. The President's proposal
states that "In 1993, the President and the Congress gave
the FCC authority to assign spectrum licenses through
competitive bidding, which has proven to be an efficient and
effective way to allocate this finite public resource.
Upcoming spectrum auctions are expected to generate more than
$25 billion over the next five years."
However, the proposal focuses on the revenue generation side
of auctions. It does not address spectrum sharing, secondary
markets for spectrum, or developing property rights in
The proposal continues that "The Administration will
propose legislation to provide more certainty in upcoming
auctions. The legislation will establish a framework for the
FCC to develop regulations that promote clearing the spectrum
in television channels 60–69 (747–762 and 777–792 MHz)
for new wireless services in an effective and equitable
manner. Such legislation also would shift the statutory
deadlines for the auction of channels 60–69 from the elapsed
2000 date to 2004 and for the auction of channels 52–59
(698–746 MHz) from 2002 to 2006. Providing more certainty
about how and when the spectrum in channels 60-69 will become
available to new entrants and shifting the deadlines for both
auctions would increase expected revenues by $6.7
It also states that "To facilitate the clearing of analog
television broadcast spectrum and provide taxpayers some
compensation for use of this scarce resource, the
Administration will propose legislation authorizing the FCC to
establish an annual lease fee totaling $500 million for the
use of analog spectrum by commercial broadcasters beginning in
2007. Upon return of their analog spectrum license to the FCC,
individual broadcasters will be exempt from the fee."
|Tuesday, Feb 5
|The House will meet at 12:30 PM for morning hour and at 2:00
PM for legislative business. No recorded votes are expected
before 6:30 PM. The House will consider several non tech
related bills under suspension of the rules.
9:30 AM. The U.S.
Court of Appeals (DCCir) will hear oral argument in EchoStar
v. FCC, No. 01-1032. Judges Ginsburg, Edwards and Sentelle
11:00 AM. The FTC will hold a press
conference to "unveil a new FTC ID theft consumer
assistance initiative". FTC Chairman Timothy Muris and
others will participate. See, FTC
release. Location: Room 432, 600 Pennsylvania Ave., NW.
Reporters may also access the press conference by a conference
call at 1 800 597 7623; the chairperson is Bruce
Jennings, and the confirmation number is 11222708.
RESCHEDULED FOR FEB 12.
PM. The FCBA's
Transactional Practice Brown Committee will host a brown bag
lunch on wireless transactions.
1:30 PM. The Department of
Commerce (DOC) will hold a press conference to discuss the
President's proposed budget for the DOC for FY 2003. The
following persons will be present: Philip Bond (Under
Secretary of Commerce for Technology), Conrad Lautenbacher
(Administrator of the NOAA),
James Rogan (Director of the USPTO),
Nancy Victory (Assistant Secretary for the NTIA),
and Arden Bement (Director of the NIST).
release. Location: Room 4830, DOC, 14th St. &
Constitution Ave., NW.
1:30 PM. The U.S. International Telecommunication Advisory
Committee (ITAC) will hold a meeting. See, notice
in Federal Register. Location: State Dept.
2:30 PM. The Senate
Finance Committee will hold a hearing on the President's
FY 2003 budget and tax proposals. Treasury Secretary Paul
O'Neill will testify. Location: Room 215, Dirksen
4:00 PM. The Cato Institute
will host a book forum on Against
the Dead Hand: The Uncertain Struggle for Global Capitalism
[Amazon], by Brink
Lindsey (Cato Institute). The commenters will be Robert
Zoellick (USTR), Sebastian
Mallaby (Washington Post), and Douglas Irwin (Dartmouth). See,
information and registration page. Location: The Cato
Institute, 1000 Massachusetts Ave., NW.
5:30 PM. The House Rules
Committee will meet to adopt a rule for consideration of HR
3394, the Cyber Security Research & Development Act.
Deadline to submit applications to the NTIA
for planning and construction grants for public
telecommunications facilities under the Public Telecom
Facilities Program (PTFP) for FY 2002. See, notice
in Federal Register.
|Wednesday, Feb 6
|The House will meet at 10:00 AM. It may take up HR
3394, the Cyber Security Research and Development Act,
sponsored by Rep.
Sherwood Boehlert (R-NY). The House Science Committee
approved the bill on December 12, 2001, by a unanimous voice
vote. The bill would authorize the funding of new research and
education programs pertaining to cyber security. See, TLJ
Alert No. 323, Dec. 7, 2001.
10:00 AM. The Senate
Finance Committee will hold a hearing titled Ongoing
U.S. Trade Negotiations. The scheduled witnesses are Robert
Zoellick (USTR), Gary
Broyles (National Association of Wheatgrowers), George Scalise
Association), and Arthur Wainwright (National Association of
Manufacturers). See, release
[PDF]. Location: Room 215, Dirksen Building.
10:00 AM. The House
Judiciary Committee will hold a hearing on HR 2341,
the Class Action Fairness Act of 2001, sponsored by Rep. Bob Goodlatte
(R-VA). Location: Room 2141, Rayburn Building.
10:00 AM - 12:00 NOON. The FCC's Advisory Committee for the
2003 World Radiocommunication Conference (WRC-03) will meet.
Location: FCC, 445 12th Street, SW, Commission Meeting Room,
Washington DC. This meeting had previously been scheduled for
January 30. See, FCC
notice of postponement [PDF].
12:15 PM. The FCBA's
Online Committee will host a brown bag lunch. RSVP to Scott
Harris at sharris
2:00 PM. The Federal Trade
Commission (FTC) and the Antitrust Division of the
Department of Justice (DOJ) will hold the first of a series of
joint hearings on antitrust and intellectual property.
The hearings are titled "Competition and Intellectual
Property Law and Policy in the Knowledge Based Economy".
The speakers at the opening hearing will be Timothy Muris (FTC
James (Asst. Atty. Gen.for the Antitrust Division), James Rogan
(Director of the USPTO), Judge
Pauline Newman (U.S. Court of
Appeals for the Federal Circuit), Robert Pitofsky
(Georgetown University), Todd Dickinson (Howrey Simon),
Gerald Mossinghoff (Oblon
Spivak), Richard Gilbert (U.C. Berkeley), and Richard
Levin (President of Yale). See, FTC
release and DOJ
release. Location: Room 432, FTC, 600 Pennsylvania Ave.,
Deadline to submit comments to the FCC regarding Verizon's Section
271 application to provide in region interLATA services in
the state of Vermont. See, FCC
notice [PDF]. This is CC Docket No. 02-7.
Extended deadline to submit additional comments to the Copyright Office in
response to its March 9, 2001, Notice
of Inquiry concerning the interpretation and application
of the copyright laws to certain kinds of digital
transmissions of prerecorded musical works in light of an
agreement between the Recording
Industry Association of America (RIAA), the National Music Publishers
Association (NMPA), and The Harry Fox Agency (HFA). See, 17
U.S.C. § 115. See, notice
in Federal Register, January 31, 2002, Vol. 67, No. 21, at
Pages 4694 - 4695. This is Docket No. RM 2000-7B.
|Friday, Feb 8
|The House will not be in session.
9:00 AM - 12:30 PM. The FTC and the Antitrust Division of the
Department of Justice (DOJ) will hold the second in a series
of joint hearings on antitrust and intellectual property.
There will be two concurrent sessions, titled "Patent Law
for Antitrust Lawyers" and "Antitrust Law for Patent
Lawyers". See, FTC
release and DOJ
release. Location: Rooms 432 and 332, respectively, of the
FTC, 600 Pennsylvania Ave., NW.
TO BE DECIDED ON THE BRIEFS.
9:30 AM. The U.S. Court of Appeals
(DCCir) will hear oral argument in Chameleon Radio Corp
v. FCC, No. 00-1546. Judges Edwards, Sentelle and
Silberman will preside.
10:00 AM - 12:00 NOON. The AEI will host a
panel discussion titled "Should the Government Promote
Open Source Software?" The speakers will be Robert Hahn
(AEI Brookings Joint Center), James Bessen (Research on
Evans (NERA), Lawrence
Lessig (Stanford Univ.), and Craig
Mundie (Microsoft). See, online registration
page. Location: AEI, 12th Floor, AEI, 1150 17th St., NW.
10:00 AM. Chris Murck, Chairman of the American Chamber of
Commerce in China, will speak on the U.S. relationship
with China. He will also comment on China's membership into
the WTO and its likely impact on the global marketplace. For
more information, contact Micaela de Leon Vivero at mdeleon
@apcoworldwide.com or 202 778-1024. Location: Murrow Room,
National Press Club, 529
14th St. NW, 13th Floor.
12:15 PM. The FCBA's
Wireless Telecommunications Practice Committee will host a
lunch. The topic will be "Hot Wireless Issues on the
Hill". The price to attend is $15.00. RSVP to Wendy
Parish at firstname.lastname@example.org
by 12:00 NOON on February 6. Location: Sidley & Austin,
Room 6-E, 1501 K Street, NW.
Sixth Anniversary of passage of the Telecommunications Act of