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July 25, 2002, 9:00 AM ET, Alert No. 477.
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FCC Declines to Commence NPRM on Location Privacy
7/24. The Federal Communications Commission (FCC) released an order [9 pages in PDF] in which it stated that "we decline to commence a rulemaking to adopt rules to implement the wireless location information privacy amendments to Section 222 of the Communications Act of 1934 ..."
The FCC reasoned that "precisely because of the nascent state of these services, we do not wish inadvertently to constrain technology or consumer choices via our rules. At this point, any commercial location based services being offered are clearly at an early stage and the full nature and extent of the commercial services that will be offered is unknown."
The FCC added that it "will continue to monitor location privacy issues as these services are deployed and will take regulatory action if the need is clearly demonstrated."
47 U.S.C. § 222 provides, in part: "Except as required by law or with the approval of the customer, a telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable customer proprietary network information in its provision of (A) the telecommunication service from which such information is derived, or (B) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories."
The 106th Congress enacted, and President Clinton signed, the Wireless Communications and Public Safety Act of 1999. This bill was S 800, sponsored by Sen. Conrad Burns (R-MT), and HR 438, sponsored by Rep. John Shimkus (R-IL). It designated 911 as the universal emergency service number, and promoted wireless 911 service. The bill also amended § 222 to include cell phone call location information in the definition of customer proprietary network information (CPNI).
§ 222 covers only telecommunications carriers. However, with the development of PDAs, in car map and traffic services, wireless tollbooth collection systems, Blackberry e-mail pagers, Bluetooth enabled devices, and anything else that can be embedded with a GPS chip, or other technology, location data can be collected by entities which are not telecommunications carriers.
The Cellular Telecommunications & Internet Association (CTIA) had requested a rulemaking proceeding. This is the FCC's proceeding titled "In the Matter of Request by Cellular Telecommunications and Internet Association to Commence Rulemaking to Establish Fair Location Information Practices", and numbered WT Docket No. 01-72.
CTIA President Tom Wheeler stated in a release that "This decision can only be characterized as a fumble ... Two years ago CTIA took the lead on this important consumer issue and proposed to the Commission a uniform methodology, based on our own voluntary program. Unfortunately, the FCC has chosen to reject our proposal ... Congress sent a clear message when it passed the 911 legislation -- that location information was a uniquely sensitive matter of privacy. The industry responded to Congress, but it appears as though the FCC has dropped the ball."
FCC Commissioner Michael Copps wrote a separate dissent [PDF]. He stated that "our failure to act will result in American’s privacy being threatened and adoption of location enabled devices and E911 phones being slowed." He reasoned that "Customers will shy away from services if they think that the privacy of something as sensitive as their location is up for grabs. And carriers and equipment makers will avoid being burned by consumer fear and will thus under-invest in location devices."
"The Commission should issue a Notice of Proposed Rulemaking that proposes rules to implement Congress's mandate," wrote Copps. "Instead, the majority chooses to do nothing -- inaction -- a course that is antiprivacy, anti consumer, and will slow the growth of the wireless industry."
FCC Seeks Comment on NTIA 3G Viability Assessment
7/24. The Federal Communications Commission (FCC) issued a public notice [PDF] in which it requests comment on the National Telecommunications and Information Administration's (NTIA) July 23 document titled "An Assessment of the Viability of Accommodating Advanced Mobile Wireless (3G) Systems in the 1710-1770 MHz and 2110-2170 MHz Bands". Comments are due by August 8.
On July 23, officials from the Federal Communications Commission (FCC), Department of Commerce (DOC), and Department of Defense (DOD), along with the heads of the CTIA and TIA, announced a plan for the reallocation of 90 MHz of spectrum for use by Third Generation (3G) wireless services. The DOC's NTIA released the Viability Assessment at this time. The participants also called for legislation amending the spectrum auction process. In particular, the administration proposes creating a trust to be funded out of the proceeds of auctions of the reallocated spectrum; this trust would then provide payments to federal entities that must relocate to other spectrum.
The FCC's notice also states that this viability assessment "has also been incorporated into the record of the Commission’s Advanced Wireless Services proceeding in ET Docket No. 00-258".
SEC Files Complaint Against Adelphia
7/24. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (SDNY) against Adelphia Communications Corporation, its founder John Rigas, his three sons, Timothy Rigas, Michael Rigas, and James Rigas, and two executives at Adelphia, James Brown and Michael Mulcahey, alleging Section 10b fraud, and other violations of federal securities laws. See also, SEC release.
The complaint alleges that "This case concerns one of the most extensive financial frauds ever to take place at a public company. From at least 1998 through March 2002, Adelphia -- the nation's sixth largest cable television company -- systematically and fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them on the books of off balance sheet affiliates. It also inflated earnings to meet Wall Street's expectations, falsified operations statistics, and concealed blatant self dealing by the family that founded and controlled Adelphia, the Rigas Family."
The complaint alleges three categories of fraud. First, "Adelphia fraudulently excluded from the Company's annual and quarterly consolidated financial statements over $2.3 billion in its bank debt by systematically recording those liabilities on the books of unconsolidated affiliates". Second, "Adelphia and the other Defendants regularly misstated in press releases, including earnings reports, and Commission filings, Adelphia's reported performance in three aspects that are crucial to the ``metrics´´ used by Wall Street to evaluate cable companies: (i) the number of its ``basic cable subscribers,´´ (ii) the extent of its cable plant ``rebuild,´´ or upgrade, and (iii) its earnings ...". And third, "Adelphia used fraudulent misrepresentations and omissions of material fact to conceal rampant self-dealing by the Rigas Family ..."
More News
7/24. The Senate Commerce Committee's Subcommittee on Science, Technology, and Space held a hearing on women in science and technology. See, prepared testimony of witnesses: Kristina M. Johnson (Pratt School of Engineering, Duke University), Kay Koplovitz (Koplovitz and Company), Nancy Stueber (Oregon Museum of Science and Industry), and Ana Marie Boitel (Women in Technology).
7/24. The Business Software Alliance (BSA) released a survey [PPS] of information technology professionals regarding cyber security. The BSA reported that 60 percent of those surveyed who are directly responsible for their company's network security believe that U.S. businesses are at risk for a major cyber attack in the next 12 months. See also, BSA release.
Senate Committee Approves FOIA Exemption Amendment to DHS Bill
9/24. The Senate Governmental Affairs Committee held a business meeting to consider amendments to S 2452 [273 pages in PDF], the National Homeland Security and Combatting Terrorism Act of 2002. The Committee unanimously approved an amendment [PDF] offered by Sen. Bob Bennett (R-UT) and others regarding public access under the Freedom of Information Act (FOIA) to information about critical infrastructure voluntarily shared with the federal government.
The amendment creates a new Section 195 that provides, in part, that "Notwithstanding any other provision of law, information that is furnished voluntarily to the Department shall not be made available pursuant to section 552 of title 5, United States Code, provided that (1) the provider would not customarily make the information available to the public; and (2) the information is designated and certified by the provider, in a manner specified by the Department, as information that the provider would not customarily make available to the public."
The Bennett amendment also provides that "Nothing in this section shall prohibit any agency from making available, pursuant to section 552 of title 5, United States Code, information that it received independently of the Department, regardless of whether the Department has similar or identical information."
This amendment further provides that "Nothing in this section shall be construed as preempting or otherwise modifying state or local law concerning the disclosure of any information that a state or local authority received independently of the Department."
On July 23, the ACLU wrote a letter to Sen. Joe Lieberman (D-CT), the Chairman of the Committee, stating that "we urge you to oppose a misguided proposal to exempt so-called ``critical infrastructure´´ information submitted to the new Department from the Freedom of Information Act (FOIA). Such ``critical infrastructure´´ legislation, which was attached to the H.R. 5005 as reported at section 724, could have a devastating effect on the public’s right to know, muzzle whistleblowers, and undermine national security."
The ACLU added that "Such legislation is entirely unnecessary. The FOIA does not require the disclosure of national security information (exemption 1), sensitive law enforcement information (exemption 7), or confidential business information (exemption 4)."
The Committee also approved an amendment [3 pages in PDF] offered by Sen. Richard Durbin (D-IL) and Sen. Lieberman pertaining to homeland security information technology systems interoperability.
FOIA Exemption Debated at House Subcommittee Hearing
7/24. The House Government Reform Committee's Subcommittee Government Efficiency, Financial Management, and Intergovernmental Relations hearing on cyber terrorism served as a forum for debate over the the Freedom of Information Act (FOIA).
The bill to create a new Department of Homeland Security, HR 5005, which will be considered by the full House on starting on July 24, creates a new exemption for critical infrastructure information voluntarily shared with the federal government. See, Sections 721-724 of the bill as approved on July 19 by the House Select Committee on Homeland Security.
Rep. Jan Schakowsky (D-IL) spoke in opposition to the exemption. She stated that "the fourth exemption to the Freedom of Information Act protects information, which is a trade secret, or information, which is commercial and privileged or confidential. This information is considered confidential if disclosure of the information is likely to impair the government's ability to obtain the necessary information in the future, or to cause substantial harm to the competitive position of the business from which the information was obtained."
The FOIA currently contains a list of exemptions, at 5 U.S.C. § 552(b). Subsection (b)(4) exempts "trade secrets and commercial or financial information obtained from a person and privileged or confidential".
Rep. Schakowsky continued that "the damage this exclusion could do is legion. The language included in the Homeland Security Bill would allow businesses and agency officials to hide lobbying activities under this exclusion. Officials from energy companies could meet with federal officials to craft government energy policy, and all of those conversations could be hidden from public view."
James Dempsey of the Center for Democracy and Technology wrote a letter to Rep. Horn and Rep. Schakowsky arguing against the exemption contained in HR 5005. He did not testify at the hearing, but Rep. Horn made his letter a part of the record. He wrote that "some FOIA disclosures can help improve infrastructure security, by ensuring  governmental accountability and by bringing public pressure on owners and operators of those facilities to correct safety defects. Keeping vulnerabilities secret may aid only the hackers and terrorists."
Dempsey also argued that the Section 721-724 exemption "is not narrowly focused and may have the unintended consequence of reducing accountability for critical infrastructure vulnerabilities."
In contrast, Scott Charney, Chief Security Strategist for Microsoft, testified that "Information sharing is indeed a key aspect to public private partnerships, and progress is being made, but there remain obstacles to the greater sharing of information concerning cyber vulnerabilities with the government. We support legislation to facilitate cyber security information sharing by granting an exemption from the Freedom of Information Act (FOIA) for information about cyber vulnerabilities voluntarily shared with the government. This legislation will lead many companies to answer the Government's call that they provide it with more cyber security data."
GAO Reports on Critical Infrastructure Protection
7/24. The General Accounting Office (GAO) released a report [PDF] titled "Critical Infrastructure Protection: Significant Challenges Need to Be Addressed".
This report was written as prepared testimony for the House Government Reform Committee's Subcommittee Government Efficiency, Financial Management, and Intergovernmental Relations hearing on cyber terrorism on July 24. The report's author, Robert Dacey, Director of Information Security Issues at the GAO, summarized this report at the hearing.
The report makes several recommendations, including:

"Developing a national CIP strategy. A more complete strategy is needed that will address specific roles, responsibilities, and relationships for all CIP entities; clearly define interim objectives and milestones; set time frames for achieving objectives; establish performance measures; and include all relevant sectors."

"Improving analysis and warning capabilities. More robust analysis and warning capabilities, including an effective methodology for strategic analysis and framework for collecting needed threat and vulnerability information, are still needed to identify threats and provide timely warnings. Such capabilities need to address both cyber and physical threats."

"Improving information sharing on threats and vulnerabilities. Information sharing needs to be enhanced both within the government and between the federal government and the private sector and state and local governments."

"Addressing pervasive weaknesses in federal information security. Because of our government’s and our nation’s reliance on interconnected computer systems to support critical operations and infrastructures, poor information security could have potentially devastating implications for our country."
Thursday, July 25
The House will meet at 10:00 AM for legislative business. The House may begin consideration of HR 5005, the Homeland Security Act of 2002.
9:00 AM. Day two of a two day meeting of the Bureau of Industry and Security's (BIS) Information Systems Technical Advisory Committee. The meeting will be partially open, and partially closed to the public. The agenda of the open portion of the meeting includes (1) a presentation on encryption in network management software, (2) a presentation on changes to the mass market encryption regulation, and (3) a discussion of the GAO report on advances in China's semiconductor industry. The BIS was formerly known as the Bureau of Export Administration (BXA). See, notice in the Federal Register. Location: Hoover Building, Room 3884, 14th Street between Pennsylvania Ave. and Constitution Ave. NW.
10:00 AM. The Senate Judiciary Committee will hold an oversight hearing on the Department of Justice. Attorney General John Ashcroft is scheduled to testify. See, notice. Press contact: Mimi Devlin at 202 224-9437. Location: Room 226, Dirksen Building.
TIME? (Following first roll call) The Senate Banking Committee will meet to vote on the nominations of Paul Atkins, Harvey Goldschmid, Cynthia Glassman, and Roel Campos to be a members of the SEC. Press contact: Jesse Jacobs at  202 224-4524. Location: to be announced.
Friday, July 26
The House will meet at 10:00 AM for legislative business. The House may consider HR 5005, the Homeland Security Act of 2002.
Deadline to submit reply comments to the FCC regarding its Declaratory Ruling and Second Further Notice of Proposed Rulemaking clarifying that providers of Internet protocol telecommunications relay services are eligible for reimbursement from the Interstate TRS Fund. See, FCC notice [PDF].
Monday, July 29
9:00 AM - 5:00 PM. Day one of a two day meeting of the Federal Accounting Standards Advisory Board (FASAB). RSVP by July 22 by calling 202 512-7350. See, notice in Federal Register. Location: Room 5N30, GAO Building.
1:30 - 3:30 PM. The FCC's WRC-03 Advisory Committee, Informal Working Group 7: Regulatory Issues and Future Agendas, will hold a meeting. See, notice [PDF]. Location: The Boeing Company, 1200 Wilson Blvd., Arlington, VA.
Deadline to submit comments to the FCC's regarding its Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming. See, notice in Federal Register.
Tuesday, July 30
8:30 AM - 12:00 NOON. The Information Technology Association of America (ITAA) and the Center for Strategic and International Studies (CSIS) will host a conference titled "Wireless Security: Challenges and Solutions". Richard Clarke, Special Advisor to the President for Cyberspace Security, will give the keynote address at 8:50 AM. See, notice and agenda. RSVP by July 26, 2002 to kwoolley or 703 284-5323. Location: CSIS, 1800 K Street, NW.
9:00 AM - 5:00 PM. Day two of a two day meeting of the Federal Accounting Standards Advisory Board (FASAB). RSVP by July 22 by calling 202 512-7350. See, notice in Federal Register. Location: Room 5N30, GAO Building.
9:30 AM. The Senate Commerce Committee will hold a hearing "to examine finances in the telecommunications marketplace, focusing on maintaining the operations of essential communications facilities". Press contact: Andy Davis at 202 224-6654. Location: Room 253, Russell Building.
10:00 AM - 12:00 NOON. The State Department's International Telecommunication Advisory Committee (ITAC) will meet. See, notice in Federal Register. Location: Room 5533, State Department.
Wednesday, July 31
10:00 AM. The Senate Judiciary Committee will hold a hearing to examine class action litigation issues. Press contact: Mimi Devlin at 202 224-9437. Location: Room 226, Dirksen Building.
11:30 AM - 12:30 PM. The U.S. Chamber of Commerce will host a luncheon titled "The President's Homeland Security Strategy: Implications for Business". The speaker will be Tom Ridge. The price to attend is $55 for members and $95 for non-members. See, notice. Location: 1615 H Street, NW.
Second of three deadlines to submit proposals to the NIST for FY 2002 Advanced Technology Program (ATP) funds. See, notice in Federal Register.
9th Circuit Addresses Trademarks and Parody
7/24. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Mattel v. MCA, a trademark and defamation case involving Mattel's Barbie doll. Judge Alex Kozinski, who wrote the opinion, described this case as "Speech-Zilla meets Trademark Kong". In the end, speech won.
Background. Aqua, a Danish techno pop band, wrote a song titled "Barbie Doll" for its 1997 album titled "Aquarium". MCA Records, and other companies, produced, marketed and sold the music. Mattel makes and sells Barbie dolls for girls.
In April, Judge Margaret McKeown of the 9th Circuit wrote that Barbie is "so perfect in her sculpture and presentation, and so comfortable in every setting, from ``California girl´´ to ``Chief Executive Officer Barbie,´´". See, opinion [PDF] in Christian v. Mattel. In the present case, Judge Kozinski noted that Barbie began her career in the 1950s as a "German street walker"; she was an "adult collectors item". Aqua's comic lyrics present her in this light. The song became a top 40 hit. However, Mattel was not amused.
District Court. Mattel filed a complaint in U.S. District Court (CDCal) against MCA Records and others alleging, among other things, violation of the Lanham Act. MCA, in turn, counterclaimed against Mattel alleging defamation for accusing MCA of piracy. The District Court granted MCA's motion for summary judgment on Mattel's claims for trademark infringement and dilution on the grounds that the use was a parody and nominative fair use. The District Court also granted Mattel's motion for summary judgment on MCA's defamation claim.
Appeals Court. The Court of Appeals, in a lengthy analysis of freedom of speech, trademark infringement, and trademark dilution, affirmed the grant of MCA's motion for summary judgment. The Court ruled on the infringement issue on First Amendment grounds. The Court did not address nominative fair use. The Court affirmed the dilution ruling on the grounds that the song falls within the noncommercial use exemption to the Federal Trademark Dilution Act (FTDA). The Court also affirmed the summary judgment on the defamation claim.
Judge Kozinski also concluded that "The parties are advised to chill."
Third Circuit Interprets Dormant Commerce Clause
7/24. The U.S. Court of Appeals (3rdCir) issued its opinion [PDF] in Cloverland v. Pennsylvania. This is not a technology case. It involves Pennsylvania's milk price supports. However, the Appeals Court opinion includes a lengthy analysis of the dormant commerce clause.
Article I, Section 8, of the Constitution provides that "The Congress shall have Power ... to regulate Commerce with foreign Nations, and among the several States ..." The dormant commerce clause is the judicial concept that the Constitution, by delegating certain authority to the Congress to regulate commerce, thereby bars the states from legislating on certain matters that affect interstate commerce, even in the absence of Congressional legislation. It is applied to block states from regulating in a way that materially burdens or discriminates against interstate commerce. The analysis in Cloverland v. Pennsylvania may be pertinent to some challenges to state e-commerce restraints. 
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