Tech Law Journal Daily E-Mail Alert
November 20, 2002, 9:00 AM ET, Alert No. 553.
TLJ Home Page | Calendar | Subscribe | Back Issues
USTR Announces Agreement for FTA with Singapore
11/19. The Office of the U.S. Trade Representative (USTR) announced that the U.S. and Singapore have reached an agreement in substance on a free trade agreement (FTA).

The USTR has not released a draft of any agreement, or even a detailed summary. It did, however, issue a one page release [PDF]. It states that the agreement contains "Strong intellectual property protections, including significant improvements in the protection of intellectual property in the digital age, as well as better legal tools for enforcing intellectual property rights in Singapore", as well as "Strong anti-circumvention provisions generally, but specifically with regard to textiles trade and intellectual property rights".

This release also states that the agreement contains "Market access commitments to Singapore's telecommunications network, including network access, rights of way and access to cable landing stations at cost-based rates on non-discriminatory terms. Rights to re-sell telecom services, access to leased elements of the network, cost-based interconnection between networks, and strong disciplines on regulatory transparency also included. State-of-the art provisions on e-commerce, including national treatment and Most Favored Nation (MFN) obligations for products delivered electronically, affirmation that service disciplines cover all services delivered electronically, and permanent duty-free status of products delivered electronically."

USTR Robert Zoellick

USTR Robert Zoellick (at right) and George Yeo of the Singapore Ministry of Trade and Industry spoke about the agreement at an press conference in Singapore. See, transcript.

Zoellick said little about tech related provisions of the agreement. He stated merely that "We have special provisions dealing with electronic commerce. ... We have major advances in the area of intellectual property, and both countries put a strong premium on being economies based on intellectual property protection."

Zoellick also addressed the schedule. He stated that "in the coming weeks we will be completing the drafting of the legal text". He later added that "we need to complete the legal drafting of this agreement. I hope that will be done in a matter of weeks. So as I've been saying, I hope we can complete the document by the end of the year."

Willard Workman, of the U.S. Chamber of Commerce, stated in a release that "We are looking for the FTA to provide additional access for American companies in financial and professional services, greater protection for investment and intellectual property rights, as well as bilateral cooperation in customs and business facilitation ... Once we verify that the agreement is adequate in these priority areas, and we have confidence that it would, the Chamber will be a forceful advocate of the agreement and will lead the charge to mobilize our members to help secure Congressional passage of the FTA."

House Committee Holds Hearing on Lack of Computer Security at Federal Agencies
11/19. The House Government Reform Committee's Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations held a hearing titled "Computer Security in the Federal Government: How Do the Agencies Rate?" The Subcommittee used this hearing to release its third annual report [MS Word] grading executive branch agencies on their computer security efforts.

The Department of Justice (DOJ) received an F. The DOJ is responsible for, among other things, investigating and prosecuting computer crimes through its Computer Crimes and Intellectual Property Section (CCIPS).

The Department of Commerce received a D+. The DOC includes such entities as the National Institute of Standards and Technology (NIST), the U.S. Patent and Trademark Office (USPTO), and the National Telecommunications and Information Administration (NTIA).

The Subcommittee Chairman, Rep. Steve Horn (R-CA), said in his opening statement that "I am disheartened to announce that again this year, the government has earned an overall grade of F for its computer security efforts. Despite the Administration's welcomed focus on this important problem, 14 agencies scored so poorly that they earned individual grades of an F."

The Department of Transportation (DOT) received the lowest score, while the Social Security Administration received the highest score of the rated agencies.

Kenneth Mead, Inspector General of the DOT, said in his prepared testimony [MS Word] that the "DOT still has a long way to go to adequately secure its computer systems." He also pointed out that the "DOT has 561 mission critical systems that are used to perform such functions as directing air traffic, rescuing distressed ships, and distributing money to build the Nation's highway and transit systems." He asserted that "DOT is making progress addressing computer security issues."

Robert Dacey, Director of Information Security Issues at the General Accounting Office (GAO) submitted prepared testimony [36 pages in PDF] titled "Computer Security: Progress Made, But Critical Federal Operations and Assets Remain at Risk".

This testimony reports that "Although GAO's current analyses of audit and evaluation reports for the 24 major departments and agencies issued from October 2001 to October 2002 indicate some individual agency improvements, overall they continue to highlight significant information security weaknesses that place a broad array of federal operations and assets at risk of fraud, misuse, and disruption."

This testimony also addresses problems at the DOJ. It states that "In April 2002, the IG for the Department of Justice reported serious deficiencies in controls for five sensitive but unclassified systems that support critical departmental functions, such as tracking prisoners; collecting, processing, and disseminating unclassified intelligence information; and providing secure information technology facilities, computing platforms, and support facilities. The most significant of these deficiencies concerned the technical controls that help prevent unauthorized access to system resources. Because of the repetitive nature of the security deficiencies and concerns identified, the IG recommended that a central office responsible for system security be established to identify trends and enforce uniform standards. The IG also included other specific recommendations intended to improve departmentwide computer security for both classified and sensitive but unclassified systems."

Rep. Horn is retiring. He did not seek re-election this year.

Greenspan Explains Resiliency of Financial Markets to Collapse in Telecom Sector
11/19. Federal Reserve Board Chairman Alan Greenspan gave a speech titled "International Financial Risk Management". He spoke to the Council on Foreign Relations in Washington DC. He addressed how new financial instruments, along with new computer and telecom technologies, have made it possible to transfer risks, and hence, lessen the impact on financial markets of events such as the collapse of stocks in the telecom sector.

"Financial derivatives, more generally, have grown at a phenomenal pace over the past fifteen years. Conceptual advances in pricing options and other complex financial products, along with improvements in computer and telecommunications technologies, have significantly lowered the costs of, and expanded the opportunities for, hedging risks that were not readily deflected in earlier decades", said Greenspan. "These increasingly complex financial instruments have especially contributed, particularly over the past couple of stressful years, to the development of a far more flexible, efficient, and resilient financial system than existed just a quarter century ago."

He continued that "Greater resilience has been evident in many segments of the financial markets. One prominent example is the response of financial markets to a burgeoning and then deflating telecommunications sector. Worldwide borrowing by telecommunications firms in all currencies amounted to more than the equivalent of one trillion U.S. dollars during the years 1998 to 2001. The financing of the massive expansion of fiber optic networks and heavy investments in third generation mobile phone licenses by European firms strained debt markets."

"At the time, the financing of these investments was widely seen as prudent because the telecommunication borrowers had very high valuations in equity markets, which could facilitate a stock issuance, if needed, to take down bank loans and other debt. In the event, of course, prices of telecommunication stocks collapsed, and many firms went bankrupt. In decades past, such a sequence would have been a recipe for creating severe distress in the wider financial system. However, compared with decades past, banks now have significantly more capital with which to absorb shocks, and they employ improved systems for managing credit risk. In conjunction with this improvement, both as cause and effect, banks have more tools at their disposal with which to transfer credit risk and, in so doing, to disperse credit risk more broadly through the financial system."

After reviewing some of these new instruments, he stated that "such instruments appear to have effectively spread losses from defaults by Enron, Global Crossing, Railtrack, WorldCom, Swissair, and sovereign Argentinian credits over the past year to a wider set of banks than might previously have been the case in the past, and from banks, which have largely short term leverage, to insurance firms, pension funds, or others with diffuse long term liabilities or no liabilities at all."

Congress Passes Small Webcaster Amendments Act
11/15. The Senate amended and passed HR 5469, the Small Webcaster Amendments Act of 2002, by unanimous consent on Thursday, November 14. On November 15, the House approved the bill, as amended by the Senate, by unanimous consent.

Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee, explained the bill on the Senate floor. (See, Congressional Record, November 14, 2002, at Page S11138.)

"The advent of webcasting -- streaming music online rather than broadcasting it over the air as traditional radio stations do -- has marked one of the more exciting and quickly growing of the new industries that have sprung up on the Web. Many of the new webcasters, unconstrained by the technological limitations of traditional radio transmission, can and do serve listeners across the country and around the world."

But, he added, "we must not neglect the artists who create and the businesses which produce the digital works that make the online world so fascinating and worth visiting. With each legislative effort to provide clear, fair and enforceable intellectual property rules for the Internet, a fundamental principle to which we have adhered is that artists and producers of digital works merit compensation for the value derived from the use of their work."

Sen. Leahy then reviewed the legislative history relevant to compensation of artists. "In 1995, we enacted the Digital Performance Right in Sound Recordings Act, which created an intellectual property right in digital sound recordings, giving copyright owners the right to receive royalties when their copyrighted sound recordings were digitally transmitted by others. Therefore when their copyrighted sound recordings are digitally transmitted, royalties are due. In the 1998 Digital Millennium Copyright Act, DMCA, we made clear that this law applied to webcasters and that they would have to pay these royalties. At the same time, we created a compulsory license so that webcasters could be sure of the use of these digital works. We directed that the appropriate royalty rate could be negotiated by the parties or determined by a Copyright Arbitration Royalty Panel -- or CARP -- at the Library of Congress."

"Despite some privately negotiated agreements, no industry wide agreement on royalty rates was reached and therefore a CARP proceeding was instituted that concluded on February 20, 2002. The CARP decision set the royalty rate to be paid by commercial webcasters, no matter their size, at .14 cents per song per listener, with royalty payments retroactive to October 1998, when the DMCA was passed", said Sen. Leahy. "On appeal, the Librarian in June, 2002, cut the rate in half, to .07 cents per song per listener for commercial webcasters."

"The retroactive fees were to be paid in full by October 20th and would have resulted in many small webcasters in particular, going out of business."

Sen. Leahy then described this latest version of the bill. "The legislation reflects a compromise for all the parties directly affected by this legislation -- small webcasters that could not survive with the rates set by the Librarian and copyright owners and performers who under this bill will give certain eligible webcasters an alternative royalty payment scheme."

Sen. Patrick LeahySen. Leahy (at right) explained that "This legislation does three things to help small webcasters pay royalties and stay in business. ... First, the Librarian royalty rate is based on a per performance formula, which has the unfortunate effect of requiring webcasters to pay high fees for their use of music, even before the audience of the webcaster has grown to a sufficient size to attract any appreciable advertising revenues. Without any percentage of revenue option (as provided by the legislation), the webcasting industry would be closed to all but those with the substantial resources necessary to subsidize the business until the advertising revenue caught up to the per performance royalty rate. The bill provides a percentage of revenue option for small businesses with less than $500,000 in gross revenue in 2003 and $1.25 million dollars in 2004. The bill also provides for minimum fees and a percentage of expenses floor on the royalties, to assure that copyright owners and artists receive some payment for performance of their music." (Parentheses in original.)

"Second," said Leahy, "for noncommercial webcasters, such as college webcasters, the bill corrects an anomaly in the Librarian's decision. Under that decision, nonprofit entities held FCC licenses were given a lower per performance rate than were commercial entities. However, the decision made no such provision for noncommercial entities that were not FCC licenses. The bill extends the lower rate to all nonprofit entities."

"Finally, the bill reduces the retroactive burden on many of the small commercial webcasters by allowing them to make their payments based on a percentage of revenue or percentage of expense, but also allows both small commercial and noncommercial webcasters to pay these retroactive fees in three payments over the span of a year."

The Recording Industry Association of America (RIAA) stated in a release that "The parties support the Senate compromise that addresses the concerns of certain broadcasters about the small webcaster legislation passed by the House of Representatives. The Senate language authorizes SoundExchange, whose governing board is composed of artists and record companies, to reach agreements with small commercial and noncommercial webcasters that can be applied to all artists and record companies."

"The recording industry did not seek nor propose this authorization. Although the intent of the House bill was to preclude the use of the rates and terms in the bill as precedent in future negotiations and rate proceedings, certain broadcasters were concerned that it did not adequately achieve that objective and proposed the approach in the Senate compromise as a means of addressing that concern."

John Simson of the SoundExchange stated in a release that "This legislation is a positive step forward for webcasters, artists and record labels because it brings some long awaited certainty to the marketplace. We are pleased that Congress found a way to implement the rates and terms for small webcasters that the House proposed last month. We will work expeditiously toward putting those rates and terms into effect as Congress has requested."

"On another important issue, we are pleased that revisions to the bill offered the opportunity for record companies and artists to extend a six month stay of payments for noncommercial webcasters. This provides all parties time to address the unique circumstances of noncommercial webcasters and reach an appropriate arrangement."

Senate Passes Homeland Security Bill
11/19. The Senate passed the Homeland Security Act of 2002, by a vote of 90-9. The bill creates a new Department of Homeland Security (DHS).

Democrats (plus Jeffords) cast all of the votes in opposition: Akaka, Byrd, Feingold, Hollings, Inouye, Jeffords, Kennedy, Levin, and Sarbanes. See, Roll Call No. 249.

The House passed the bill on November 13 by a vote of 299-121. See, Roll Call No. 477. However, the Senate made some minor changes. The House is likely to approve the bill as passed by the Senate, either by voice vote or unanimous consent later this week.

President Bush, who proposed creating the new Department of Homeland Security (DHS) last summer, stated that "The United States Congress has taken an historic and bold step forward to protect the American people by passing legislation to create the Department of Homeland Security. This landmark legislation, the most extensive reorganization of the Federal Government since the 1940s, will help our Nation meet the emerging threats of terrorism in the 21st Century."

Bush continued that "This bill includes the major components of my proposal -- providing for intelligence analysis and infrastructure protection, strengthening our borders, improving the use of science and technology to counter weapons of mass destruction, and creating a comprehensive response and recovery division."

Bush added, "I look forward to signing this important legislation." See, White House release.

The bill also transfers to the new DHS various government units with missions related to cyber security. It also contains various provisions relating to cyber crimes and protecting critical information infrastructures.

Wednesday, November 20
8:30 AM - 4:30 PM. The Commerce Department's Bureau of Industry and Security (BIS) will host a one seminar titled "Essentials of Export Controls". It will cover compliance with the Export Administration Regulations (EAR). The price to attend is $150. See, BIS notice. For more information, contact Yvette Springer at 202 482-6031. Location: Grand Hyatt Washington, 1000 H. Street, NW.

10:00 AM - 12:00 NOON. The House Science Committee will meet to mark up several bills that are not related to information technology. It will then proceed with a hearing titled "The 2001 Presidential Awardees for Excellence in Mathematics and Science Teaching: Views from the Blackboard". Webcast. Location: Room 2318, Rayburn Building.

12:00 NOON. The FCBA's Transactional Practice Committee will host a brown bag lunch on the Sarbannes Oxley Act. RSVP to Donna Farber at Location: Latham & Watkins, Lincoln Square Bldg., Suite 1000, 555 Eleventh St., NW.

12:30 PM. The FCBA will host a luncheon. The speaker will be NFL Commissioner Paul Tagliabue. The price is $45 for members, $35 for government & law student members, and $55 for non-members. Registrations and cancellations are due by 5:00 PM on November 15. For more information, call 202 293-4000. Location: JW Marriott Hotel, 1331 Pennsylvania Avenue, NW.

Thursday, November 21
8:30 AM - 4:30 PM. The Commerce Department's Bureau of Industry and Security (BIS) will host a seminar titled "Technology Export Controls". It will cover compliance with the U.S. export and reexport controls relating to technology, software and encryption. The price to attend is $150. See, BIS notice. For more information, contact Yvette Springer at 202 482-6031. Location: Grand Hyatt Washington, 1000 H. Street, NW.

12:15 PM. The FCBA's Global Telecommunications Development Committee and International Practice Committee will host a brown bag lunch. The topic will be "Financing Telecom Projects in Developing Countries: The Role of OPIC, Export Import Bank, and the International Finance Corporation (IFC)". The speakers will be Roger Cohen (Export Import Bank), Brian Christaldi (OPIC), and Jean-Francois Dupuy (IFC). For more information, contact Janet Hernandez at 202 736-1814. RSVP to Julie Ilett at or 202 736-1819. Location: Coudert Brothers, 1627 Eye St., NW, 11th floor.

CANCELLED. 12:15 PM. The FCBA's Cable Practice Committee will host a brown bag lunch. The speakers will be John Wong and Michael Lance (Division Chief and Deputy Division Chief of the FCC Media Bureau's Engineering Division). For more information call Lisa Cordell at 202 939-7934. RSVP to Wendy Parish at wendy Location: NCTA, 1724 Massachusetts Ave., NW.

3:00 PM. Uma Suthersanen will speak on "Copyright and Human Rights in Europe". She is a Senior Research Fellow at the Queen Mary Intellectual Property Research Institute in London. For more information, contact Robert Brauneis at or 202 994-6138. Location: Faculty Conference Center, 5th Floor of Burns, George Washington University Law School, 2000 H Street, NW.

6:30 - 10:00 PM. The FCBA will host a charity auction. For more information, contact Heidi Kurtz (FCBA) at 202 293-4000. Admission is free, and it is open to the public. The event features a live auction, silent auctions, raffles, hours d’oeuvres and a cash bar. Location: Capitol Hilton Hotel, 16th and K Streets, NW.

Friday, November 22
Deadline to submit comments to the FCC regarding its ultrawideband report [110 pages in PDF] titled "Measured Emissions Data For Use In Evaluating The Ultra-Wideband (UWB) Emissions Limits in the Frequency Bands Used By The Global Positioning System". See also, FCC public notice [3 pages in PDF]. The report was prepared by Stephen Jones of the FCC's Office of Engineering and Technology. He can be contacted at 301 362-2054 or This is ET Docket No. 98-153.

Deadline to submit comments to the The FCC in response to its requests for comments regarding whether to revise, clarify or adopt any additional rules in order to more effectively carry out Congress's directives in the Telephone Consumer Protection Act of 1991 (TCPA). See, notice in the Federal Register, October 8, 2002, Vol. 67, No. 195, at Pages 62667 - 62681.

Deadline to submit a request to participate in roundtable meetings hosted by the U.S. Patent and Trademark Office (USPTO) regarding small business views on foreign patent challenges. The USPTO is seeking comments, and holding roundtable meetings, pursuant to a recommendation contained in a General Accounting Office (GAO) report [PDF] titled "Federal Action Needed to Help Small Businesses Address Foreign Patent Challenges". This report was released on August 22, 2002. See also, story titled "GAO Reports Foreign Patent Challenges Facing Small Businesses" in TLJ Daily E-Mail Alert No. 497, August 23, 2002. See, notice in the Federal Register, October 28, 2002, Vol. 67, No.208, at Pages 65786 - 65787.

Monday, November 25
Deadline to submit comments to the The National Telecommunications and Information Administration (NTIA) regarding the product recall notices exception to the Electronic Signatures in Global and National Commerce (E-SIGN) Act. The Act provides, at §101, for the acceptance of electronic signatures in interstate commerce, with certain enumerated exceptions. §103 of the Act provides that "The provisions of section 101 shall not apply to ... (2) any notice of ... (D) recall of a product, or material failure of a product, that risks endangering health or safety". The Act also requires the NTIA to review, evaluate and report to Congress on each of the exceptions. See, notice in the Federal Register.
Tuesday, November 26
2:00 - 4:00 PM. The Bureau of Industry and Security's (BIS) National Infrastructure Advisory Council (NIAC) will hold a partly open, and partly closed, meeting. The NIAC advises the President on the security of information systems for critical infrastructure supporting other sectors of the economy, including banking and finance, transportation, energy, manufacturing, and emergency government services. The agenda of this meeting includes deliberation regarding comments received on the draft document titled "National Strategy to Secure Cyberspace". (Comments were due by November 18.) The scheduled speakers include Richard Davidson (Director of NIAC), Richard Clarke, and Kenneth Juster (Director of BIS). For more information contact Eric Werner at 202 482-7470. See, notice in the federal register. Location: Truman Room, White House Conference Center, 726 Jackson Place, NW.
People and Appointments
11/19. The Senate confirmed Dennis Shedd to be a Judge of the U.S. Court of Appeals for the Fourth Circuit by a vote of 55-44. He is currently a Judge of the U.S. District Court. It was an almost strait party line vote, with several Southern Democrats and others crossing over to vote for confirmation: Byrd (WV), Graham (FL), Hollings (SC), Inouye (HI), Lincoln (AR), Miller (GA), and Nelson (NE). See, Roll Call No. 250.

11/19. President Bush announced his intent to nominate Ellen Weintraub to be a Democratic member of the Federal Election Commission (FEC) for the remainder of a six year term expiring April 30, 2007. She will replace Commissioner Karl Sandstrom. She is an attorney in the Washington DC office of the law firm of Perkins Coie. She focuses on representing Democrats in election law matters. From 1990 through 1996 she worked for the House Committee on Standards of Official Conduct. She has the support of both Senate sponsors of the recently enacted campaign finance bill, Sen. John McCain (R-AZ) and Sen. Russ Feingold (D-WI). Her husband works for Sen. Feingold. See, White House release.

11/19. James DeLong will join the Progress & Freedom Foundation (PFF) as a full time Senior Fellow and Director of the PFF's new Center for the Study of Digital Property, effective December 1, 2002. He currently works at the Competitive Enterprise Institute. See, PFF release.

11/18. BT named Matthew Bross to be its Chief Technology Officer. He previously worked for Williams Communications. See, BT release.

More News
11/19. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Jebian v. Hewlett Packard, a challenge to an ERISA plan's denial of benefits to a software engineer with back problems who was formerly employed by Hewlett Packard.

11/19. The Federal Election Commission (FEC) fined the Sony Pictures Entertainment Inc. Political Action Committee $900 for not filing a December Monthly 2001 report. See, FEC release.

11/19. November 18 was the published deadline to submit comments to the President's Critical Infrastructure Protection Board (PCIPB) regarding the document titled "National Strategy to Secure Cyberspace", which was released on September 18. See, original notice in the Federal Register. However, on November 19, the PCIPB published a supplemental notice in the Federal Register stating that, notwithstanding its previously announced deadline of September 18, it requests ongoing public comments. See, Federal Register, November 19, 2002, Vol. 67, No. 223, at Pages 69741 - 69742. For more information, contact Tommy Cabe at 202 456-5420.

About Tech Law Journal
Tech Law Journal publishes a free access web site and subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year. However, there are discounts for entities with multiple subscribers. Free one month trial subscriptions are available. Also, free subscriptions are available for law students, journalists, elected officials, and employees of the Congress, courts, and executive branch, and state officials. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert and news items are not published in the web site until one month after writing. See, subscription information page.

Contact: 202-364-8882; E-mail.
P.O. Box 4851, Washington DC, 20008.
Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All rights reserved.