Tech Law Journal Daily E-Mail Alert
January 10, 2003, 9:00 AM ET, Alert No. 580.
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Senate Organizational News
1/9. As expected, on January 7, Sen. Bill Frist (R-TN) was formally selected Senate Majority Leader, and Sen. Ted Stevens (R-AK) was elected President Pro Tempore of the Senate.

Sen. Trent Lott (R-MS), who had been the Senate Majority Leader until the Democratic take over in 2001, will be the Chairman of the Rules and Administration Committee. This is not one of the important Committees; the most significant item within its jurisdiction is election law. However, he will also continue as a member of the Senate Commerce Committee. He will chair its Aviation Subcommittee. He is also a member of the Senate Finance Committee.

Commerce Committee. The change of majority control of the Senate may have a significant effect on technology related policy areas that fall within the jurisdiction of the Senate Commerce Committee. Sen. John McCain (R-AZ) will resume his chairmanship of the Committee, and Sen. Ernest Hollings (D-SC) will once again be the ranking Democrat. Sen. Conrad Burns (R-MT) will again chair the Communications Subcommittee, replacing Sen. Hollings.

Sen. Ernest HollingsSen. Hollings (at right) has been the Senate's leading opponent of the Tauzin Dingell bill, and any other legislation to provide regulatory relief to the Bell companies. He has also sought to restrain FCC Chairman Michael Powell's market oriented approach to regulation.

Sen. Hollings is also the sponsor of S 2048, the Consumer Broadband and Digital Television Promotion Act, a bill to mandate copy protection technology. He is also a cosponsor of Sen. Joe Biden's (D-DE) bill, S 2395, the Anticounterfeiting Amendments of 2002.

Newly elected Sen. John Sununu (R-NH) has been appointed to the Committee.

Two Democrats who were on the Commerce Committee in the 107th Congress lost their re-election bids. Former Sen. Jean Carnahan (D-MO) lost to Sen. Jim Talent (R-MO). Former Sen. Max Cleland (D-GA) lost to Sen. Saxby Chambliss (R-GA). One Democrat has yet to be named to the Commerce Committee for the 108th Congress.

Judiciary Committee. The change of control of the Senate will have major consequences for the output of the Senate Judiciary Committee. However, these changes will primarily be in the confirmation of judicial appointees and social policy. In contrast, Democrats and Republicans on the Committee have not differed sharply on intellectual property or antitrust issues.

Sen. Orrin Hatch (R-UT) will once again chair the Committee. Sen. Patrick Leahy (D0-VT) will be ranking Democrat.

Sen. Sam Brownback (R-KS) who was a member of the Committee in the 107th Congress, is not on the list of members for the 108th Congress. He was a cosponsor in the 107th Congress of S 2031, the Intellectual Property Protection Restoration Act of 2002. This is the latest version of Sen. Leahy's proposal to stop states from evading liability for infringing intellectual property rights by asserting 11th Amendment immunity.

Former Sen. Robert Torricelli (D-NJ), who was a member of the Committee, has retired. Newly elected Sen. John Sununu (R-NH) has been appointed to the Committee.

Finance Committee. The Chairmanship of the Senate Finance Committee will switch back from Sen. Max Baucus (D-MT), to Sen. Charles Grassley (R-IA). However, on technology related issues that fall within the jurisdiction of the Committee, the two have not diverged. Both, for example, worked for passage of trade promotion authority legislation.

There is considerable turnover in the Committee's membership. Three Republicans left the Committee. Former Sen. Frank Murkowski (R-AK) was elected Governor of Alaska, and resigned. Former Sen. Phil Gramm (R-TX) and former Sen. Fred Thompson (R-TN) both retired. Four new Republicans have been named to the Committee: Sen. Rick Santorum (R-PA), Sen. Bill Frist (R-TN), Sen. Gordon Smith (R-OR), and Sen. Jim Bunning (R-KY).

Former Sen. Robert Torricelli (D-NJ), who was a member of the Committee, has retired. No more Democrats have been added to the Committee for the 108th Congress.

Other Committees. Sen. Stevens will once again be Chairman of the Senate Appropriations Committee, while Sen. Robert Byrd (D-WVa) will revert to ranking Democrat.

Sen. Richard Shelby (R-AL) will be the Chairman of the Senate Banking Committee, replacing Sen. Paul Sarbanes (D-MD). The previous Republican Chairman, former Sen. Phil Gramm (R-TX), retired. This Committee has jurisdiction over export control laws. Sen. Mike Enzi (R-WY), a member of the Committee, won re-election in November. He has already announced that he will reintroduce legislation to modernize export control laws. See, S 149 (107th Congress), the Export Administration Act of 2001.

Sen. Pete Domenici (R-NM), who had been Chairman of the Senate Budget Committee, will be the new Chairman of the Senate Energy and Natural Resources Committee.

Sen. Don Nickles (R-OK) will be the Chairman of the Senate Budget Committee.

Rep. Cox and Sen. Wyden Introduce Bill to Make Permanent Net Tax Ban
1/7. Sen. Ron Wyden (D-OR) and Rep. Chris Cox (R-CA) introduced companion bills in the Senate and House to make permanent the moratorium first enacted in the Internet Tax Freedom Act.

The bill is titled the "Internet Tax Nondiscrimination Act". It would make permanent the current moratorium on Internet access taxes, and multiple and discriminatory taxes on Internet commerce. It would amend Section 1101 of the Internet Tax Freedom Act, which is codified at 47 U.S.C. 151 note.

The original Internet Tax Freedom Act, which was passed as part of a larger omnibus bill in late 1998, contained a three year moratorium. It expired on October 20, 2000. The 107th Congress passed HR 1552, also titled the Internet Tax Nondiscrimination Act, which extended the moratorium until November 1, 2003. It too was sponsored by Rep. Cox, while Sen. Wyden sponsored a companion bill in the Senate.

In prior Congressional debates, opponents have argued that the Internet tax moratorium is harming the ability of state and local taxing authorities to finance schools, police, and fire protection. They have also argued that any legislation should address state collection of sales and use taxes, which is not affected by the moratorium. Currently, Quill v. North Dakota, 504 U.S. 298 (1992), provides that state and local taxing authorities are barred under the Commerce Clause from requiring remote sellers without a substantial nexus to the taxing jurisdiction to collect sales taxes for sales to persons in the jurisdiction. However, the Court added that Congress may extend such authority. Congress has passed no legislation pertaining to sales and use taxes. However, several bills were introduced in the 107th Congress that would have provided this authority. See, for example, HR 1410, sponsored by Rep. Ernest Istook (R-OK), and S 512, sponsored by Sen. Byron Dorgan (D-ND).

Sen. Ron WydenSen. Wyden (at right) spoke in the Senate on January 7, 2003 regarding his bill. He said that "predictions that the Internet Tax Freedom Act would topple Western Civilization have not come to pass. Since the moratorium on taxation of out of State, online sales was first enacted in October 1998, not a single community, county or state has come forward to prove it is being injured by its inability to impose discriminatory taxes on electronic commerce. There is simply no evidence that States have lost revenue by technology driven commerce."

He added that "A number of States seem to be arguing that their economic future is tied to taxing technology entrepreneurs located thousands of miles away with no physical presence in their jurisdiction. I don't share this view."

Sen. Wyden also commented on the Quill case. He stated that "Congress will soon be asked again by the Streamlined Sales Tax Project States to take the political heat for new sales taxes. The U.S. Senate has voted three times in recent years on whether to overturn Quill to require remote sellers with no nexus to serve the States as their tax collectors. Every time the Senate has rejected the notion. On January 19, 1995, the Senate voted 73-25 to table the amendment; on October 2, 1998, the Senate voted 66-29 to table the amendment; and most recently, on November 15, 2001, the Senate voted 57-43 to table the amendment."

People and Appointments
1/9. President Bush announced his intent to nominate Christopher Henry to be Deputy Under Secretary of Defense for Policy. He is currently the Corporate VP for Strategic Assessment and Development at Science Applications International Corporation (SAIC). Before that, he was a Senior Fellow at the Center for Strategic and International Studies (CSIS), where he worked on the "Information-based Warfare initiative" and the "Conflict in the Digital Age Project." See, White House release.

1/9. President Bush nominated seven persons to be members of the National Science Foundation's (NSF) National Science Board: Barry Barish, Steven Beering, Kenneth Ford, Daniel Hastings, Elizabeth Hoffman, Douglas Randall, and Jo Anne Vasquez. See, White House release. Back on October 17, 2002, President Bush announced his intent to nominate eight persons to be member of this Board. Elizabeth Hoffman was not on the 2002 list. In addition, that list also included the names of Ray Bowen and Delores Etter, neither of whom is on the January 9 list of actual nominees. See White House release of October 17.

1/9. President Bush nominated Charlotte Lane and Daniel Pearson to be members of the U.S. International Trade Commission (USITC). See, White House release.

1/9. President Bush nominated Michael Toner and Ellen Weintraub to be members of the Federal Election Commission (FEC). Weintraub received a recess appointment late last year. See, White House release.

1/9. President Bush announced his intent to nominate Paul McHale to be Assistant Secretary of Defense for Homeland Defense. McHale was a member of the House of Representatives from 1993 through 1999. He is currently VP of Tallman, Hudders and Sorrentino. See, White House release.


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More News
1/9. 24/7 Real Media, Inc. and ValueClick, Inc. announced that they have "amicably settled" a patent lawsuit involving 24/7's U.S. Patent No. 6,026,368, titled "On-line interactive system and method for providing content and advertising information to a targeted set of viewers". 24/7 filed a complaint in U.S. District Court (SDNY) last against ValueClick and Mediaplex. The parties announced that 24/7 will license its patent to ValueClick and Mediaplex "in exchange for a payment", but that "All terms of the agreement are confidential." See, 24/7 release.

12/20. The Federal Communications Commission (FCC) issued an Order adopting a Consent Decree between the FCC and NOS Communications (NOS) and Affinity Network Inc. (ANI) regarding consumer complaints alleging that NOS and ANI engaged in the deceptive marketing of their interstate communication services by failing to disclose clearly and conspicuously material facts regarding their call unit pricing methodology and promotional plan offerings. The Order provides that "The Companies will make a voluntary contribution (not a fine or penalty) to the United States Treasury in the amount of $1 million dollars ($1,000,000) ..." (Parentheses in original.) See also, FCC release.

1/9. The Progress and Freedom Foundation (PFF) released a report [23 pages in PDF] titled "The FCC and Telecom Recovery: A Scorecard for Evaluating the New Rules". The report, which was written by the PFF's Randall May, argues, among other things, that "Unbundling And Sharing Should Not Be Required For Newly Installed Fiber Or Other Non-Copper Facilities" and "Regardless Of Technology Platform, Broadband Services Should Not Be Subject To Unbundling and Sharing Requirements Or Computer-II-Type Separation Requirements".

1/9. The Competitive Telecommunications Association (CompTel) submitted a comment [huge MS Word file] to the Office of U.S. Trade Representative (USTR) for its annual Section 1377 (19 U.S.C. 3106) review of the operation and effectiveness of all U.S. trade agreements regarding telecommunications products and services. CompTel states that it urges the USTR "to work aggressively with the Governments of Australia, Brazil, China, France, Germany, India, Italy, Japan, Mexico, The Netherlands, Singapore, South Africa, Switzerland, and Taiwan to open their markets for competition and to ensure fair and non-discriminatory market conditions in accordance with their respective international trade commitments." See also, CompTel release.

Friday, January 10
12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Committee will host a luncheon. The topic will be "What's Up for the Coming Year in the Auctions & Industry Analysis, Public Safety & Private Wireless, Commercial Wireless & Policy Divisions". The speakers will be Division Chiefs at the FCC's Wireless Telecommunications Bureau Division. The price to attend is $15. RSVP to Wendy Parish at Location: Sidley Austin, 1501 K St., NW, Confr. Rm. 6E.
Monday, January 13
The Supreme Court will return from the recess that it began on December 16.

11:00 AM - 1:00 PM. The Heritage Foundation will host a panel discussion titled "Harnessing Information Technology to Improve Homeland Security". The speakers include James Gilmore (Chairman, Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction), Lee Holcomb (Office of Homeland Security), Tom Richey (Director of Homeland Security, Microsoft), Tom Gann (VP & GM, Siebel Systems), and Peter Brookes (Heritage). See, notice. Location: Heritage, 214 Massachusetts Ave NE.

Tuesday, January 14
9:30 AM. The Senate Commerce Committee will hold a hearing titled the "State of the Competition in the Telecom Industry". Media contact: Andy Davis (Hollings) at 202 224-6654. Location: Room 253, Russell Building.

The U.S. Court of Appeals (DCCir) will hear oral argument in Peninsula Communications v. FCC, No. 01-1273. Petitioner is a radio broadcaster operating on the Kenai Peninsula in south central Alaska. Judges Henderson, Randolph and Garland will preside. Location: 333 Constitution Ave., NW.

Deadline to submit comments to the USPTO to assist it in writing a report to the Congress regarding technological protection systems for digitized copyrighted works and to prevent infringement. This report is required by the Technology, Education and Copyright Harmonization Act of 2002 (TEACH). See, notice in the Federal Register, December 9, 2002, Vol. 67, No. 236, at Pages 72920 - 72921. For more information, contact Michael Shapiro at 703 305-9300 or

Wednesday, January 15
9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

Deadline to submit comments to the NIST regarding it plans to disseminate new data regarding condensed phase infrared spectra through the Internet. See, notice in the Federal Register, December 16, 2002, Vol. 67, No. 241, at Page 77053.

Thursday, January 16
12:15 PM. The FCBA's Cable Practice Committee will host a brown bag lunch. The topic will be "Engineering Issues". The speakers will be John Wong and Michael Lance of FCC's Media Bureau. For more information, contact Lisa Cordell at 202 939-7900. RSVP to Wendy Parish at Location: NCTA, 1724 Massachusetts Ave., NW.

12:15 PM. The FCBA's Young Lawyers Committee will host a brown bag lunch. The topic will be planning for the new year. For more information, contact Yaron Dori at or Ryan Wallach at Location: Hogan & Hartson, 555 13th St., NW, Confr. Rm. 9E-407.

The FCBA's Diversity Committee and Young Lawyers Committee will host a series of Law School Outreach Programs for law students interested in practicing communications law at Washington DC area law schools. The event at American University will be held at 4:30 PM. The event at Catholic University will be a 6:00 PM. The event at George Mason University will be at 4:45 PM. The event at Georgetown University Law Center will be at 5:30 PM. The event at Howard University will be at 4:30 PM.

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