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July 31, 2003, 9:00 AM ET, Alert No. 708.
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Sen. Wyden Introduces Bill to Require Government to Disclose Its Use of Commercial Databases

7/29. Sen. Ron Wyden (R-OR) introduced S 1484 [9 pages in PDF], "The Citizens' Protection In Federal Databases Act". This is a disclosure bill. It does not actually restrict the government's collection or use of data. Rather, it would cut off funding for certain enumerated government entities to obtain or access commercial databases, unless these entities first provide a detailed report to the Congress and the public explaining their use of these databases.

The covered entities are the Department of Justice (DOJ), the Department of Defense (DOD), the Department of Homeland Security (DHS), the Central Intelligence Agency (CIA), the Department of Treasury (DOT), or the Federal Bureau of Investigation (FBI). The DOD includes the Defense Advanced Research Projects Agency (DARPA), which is running the Terrorism Information Awareness (TIA) project.

Sen. Ron WydenSen. Wyden (at right) issued a release that states that the bill "is a response to the Defense Department’s Terrorism (formerly Total) Information Awareness (TIA) Program, among other federal initiatives, that propose to gather private information on law-abiding Americans from numerous public and private databases." (Parentheses in original.)

The bill recites in its findings that "Many Federal national security, law enforcement, and intelligence agencies are currently accessing large databases, both public and private, containing information that was not initially collected for national security, law enforcement, or intelligence purposes."

It further finds that "Risks to personal privacy are heightened when personal information from different sources, including public records, is aggregated in a single file and made accessible to thousands of national security, law enforcement, and intelligence personnel", and that "The Federal Government should not access personal information on United States persons without some nexus to suspected counterintelligence, terrorist, or other illegal activity.

The bill provides that "Notwithstanding any other provision of law, commencing 60 days after the date of the enactment of this Act, no funds appropriated or otherwise made available to the Department of Justice, the Department of Defense, the Department of Homeland Security, the Central Intelligence Agency, the Department of Treasury, or the Federal Bureau of Investigation may be obligated or expended by such department or agency on the procurement of or access to any commercially available database unless such head of such department or agency submits to Congress the report required by subsection (b) not later than 60 days after the date of the enactment of this Act."

The bill would require that the contents of these reports include "a list of all contracts, memoranda of understanding, or other agreements entered into by the department or agency, or any other national security, intelligence, or law enforcement element under the jurisdiction of the department or agency for the use of, access to, or analysis of databases that were obtained from or remain under the control of a non-Federal entity, or that contain information that was acquired initially by another department or agency of the Federal Government for purposes other than national security, intelligence, or law enforcement".

The reports would also have to include a statement of the types of data contained in the databases, the "purposes for which such databases are used, analyzed, or accessed", and the "extent to which information from such databases is retained".

The reports would also have to contain a discussion of plans and policies regarding who would have access to the databases, how unauthorized access would be monitored, and "an outline of enforcement mechanisms for accountability to protect individuals and the public against unlawful or illegitimate access or use of databases."

The bill defines the term database as follows: "any collection or grouping of information about individuals that contains personally identifiable information about individuals, such as individual's names, or identifying numbers, symbols, or other identifying particulars associated with individuals, such as fingerprints, voice prints, photographs, or other biometrics. The term does not include telephone directories or information publicly available on the Internet without fee."

GAO Reports That Uneven Compliance With Privacy Act Leaves Privacy Rights Unprotected

7/30. The General Accounting Office (GAO) released a report [82 pages in PDF] titled "Privacy Act: OMB Leadership Needed to Improve Agency Compliance".

The Privacy Act of 1974 regulates the government's use of personal information. The GAO, which is an arm of the Congress, examined a sample of 25 departments and agencies, and prepared a report for Sen. Joe Lieberman (D-CT), the ranking Democrat on the Senate Governmental Affairs Committee.

The GAO concludes that "If these issues and the overall uneven compliance are not addressed, the government will not be able to provide the public with sufficient assurance that individual privacy rights are appropriately protected."

The report found that "A key characteristic of agencies’ systems of records is that a large proportion of them are electronic, reflecting the government’s significant use of computers and the Internet to collect and share personal information. Based on survey responses, we estimate that 70 percent of the agencies' 2,400 systems of records contain electronic records. Specifically, an estimated 12 percent were exclusively electronic records, 58 percent were a combination of paper and electronic, and 31 percent were exclusively paper records. In addition, agencies allowed individuals to access their personal information via the Internet in an estimated 9 percent of systems of records (about 1 in 10)."

The GAO found that "While compliance with Privacy Act provisions and related OMB guidance was generally high in many areas, according to agency reports, it was uneven across the federal government -- ranging from 100 percent to about 70 percent for the various provisions. For example, we estimate that for all systems of records (100 percent), agencies issued the required rule that explains to the public why they exempted the system of records from one or more of the act’s privacy protections. In contrast, fewer agencies were compliant with the provision that information should be complete, accurate, relevant, and timely before it is disclosed to a nonfederal organization; we estimate that agencies took steps to comply with this requirement for 71 percent of systems of records."

The GAO report states that agency officials "identified barriers to improved compliance that include a need for more OMB leadership and guidance on the act, low agency priority given to implementing the act, and insufficient training on the act. In the absence of consistent compliance with the Privacy Act, the government cannot adequately assure the public that all legislated individual privacy rights are being protected."

The Office of Management and Budget (OMB), which is a part of the Executive Office of the President, disputes the report's conclusion.

AEI Brooking Study Compares US and EU Privacy Practices in E-Commerce

7/30. The AEI Brookings Joint Center for Regulatory Studies released a paper [34 pages in PDF] titled "Enforced Standards Versus Evolution by General Acceptance: A Comparative Study of E-Commerce Privacy Disclosure and Practice in The U.S. and The U.K." The paper was written by Karim Jamal, Michael Maier, and Shyam Sunder.

The paper presents data on privacy practices in e-commerce in the United Kingdom, which is governed by the European Union's regulatory regime, and data on privacy practices in the U.S., which does not have a regulatory regime. The paper concludes that "The codification by the EU law, and the enforcement by the U.K. government, improves neither the disclosure nor the practice of e-commerce privacy relative to the U.S. On the contrary, some evidence shows the unregulated practices in U.S. to be superior. Regulation in the U.K. also appears to stifle development of a market for web assurance services. Both U.S. and U.K. consumers continue to be vulnerable to a small number of e-commerce websites who spam their customers, ignoring the latter’s expressed or implied preferences."

The paper finds that "A comparison of the U.S. and the U.K. practices reveals that the frequency of junk email received by those who register at e-commerce websites in the two countries is about the same. Only a small number of websites in the two countries violate the privacy of their customers by sharing personally identifiable information with third parties."

However, the paper also finds that "the unregulated disclosures of privacy policies in U.S. dominate the regulated disclosures in U.K. (from the consumer’s point of view). This comparison raises important questions about the validity of the assumption that the standardized and enforced financial reporting regimes, which have gained significant currency around the world in recent years, dominate the evolutionary approach of generally accepted accounting principles." (Parentheses in original.)

The paper elaborates that "One consequence of a legislated approach to setting e-commerce privacy standards appears to be the elimination, or preclusion, of a market for private web assurance. Since the law in the U.K. specifies privacy disclosure requirements, and there is no legal requirement to purchase a privacy audit certificate, there is no market for privacy assurance seals. Contrary to its intent, the privacy disclosure law appears to have eliminated the incentives for the websites to use web-seals as signals of their good privacy practices to consumers."

In addition, it states that "In the absence of mandated standards, U.S. websites tend to view the disclosure of privacy policies as an instrument of their marketing strategy to attract consumers. Accordingly, they make it easy to find their statements of policy, and adhere to these policies reasonably closely. U.K. websites, on the other hand, appear to view privacy disclosure as merely a compliance matter; they appear to be, at the very least, indifferent to the consumer concerns about their privacy policies, and on average, make it more difficult than in U.S. for their customers to find their statements of policy."

Jim Harper, the editor of Privacilla, commented on the AEI Brookings paper. He stated in a release that "While Europe has built a creaking privacy bureaucracy, America is poised to move forward with new innovations that benefit consumers. Countries that follow the bureaucratic model will stand on the sidelines as U.S. consumers consistently enjoy more goods and services at lower prices, along with the privacy protection they want. Europe may have all the regulations, but the American system delivers real privacy for real people."

GAO Reports on WTO Trade Remedy Rulings

7/30. The General Accounting Office (GAO) released a report [128 pages in PDF] titled "World Trade Organization: Standard of Review and Impact of Trade Remedy Rulings".

The report states that "About a third of the cases filed in the WTO dispute settlement system from 1995 through 2002 challenged members’ trade remedies", and that "the United States faced substantially more challenges than other WTO members."

The report also states that "the WTO ruled for and against the U.S. and other members in roughly the same ratios." Also, "WTO rulings resulted in few changes to members' laws, regulations, and practices but had a relatively greater impact on those of the United States. While U.S. agencies stated that WTO rulings have not yet significantly impaired their ability to impose trade remedies, they had concerns about the potential future adverse impact of WTO rulings."

In addition, it states that "legal experts ... concluded that the WTO has properly applied standards of review and correctly ruled on major trade remedy issues. However, a significant minority strongly disagreed with these conclusions."

McCain and Hollings Introduce NTIA Authorization Bill

7/28. Sen. John McCain (R-AZ) and Sen. Ernest Hollings (D-SC) introduced S 1478, an untitled bill to authorize appropriations for the National Telecommunications and Information Administration (NTIA).

The bill authorizes appropriations for fiscal years 2004 through 2008 for NTIA administration, and for Technology Opportunity Program (TOP) grants, as follows:

  Administration TOP Grants
2004 $18,869,000 $15,862,000
2005 $19,435,000 $16,338,000
2006 $20,018,000 $16,828,000
2007 $20,619,000 $17,333,000
2008 $21,237,000 $17,852,000

The bill also amends the NTIA Organization Act's provision relating to spectrum management. See, 47 U.S.C. § 903. The bill provides that "the NTIA shall assess against, and collect from, each Federal agency for which the NTIA assigns spectrum or provides any spectrum management functions a charge to cover the costs thereof." The bill further provides that "The NTIA may not assign any spectrum for use for, or provide any spectrum management functions with respect to, any Federal agency, except to the extent that the NTIA obtains reimbursement for the costs thereof.'."

The Senate Commerce Committee is scheduled to mark up the bill at its meeting at 9:30 AM on Thursday, July 31.

Bush Nominates Takings Clause Expert to Federal Claims Court

7/30. President Bush nominated George Miller to be a Judge of the U.S. Court of Federal Claims. He is currently a partner at the law firm of Hogan & Hartson. See, White House release and release.

His biography in the Hogan & Hartson web site states that "has developed a unique practice representing property owners and governmental entities in cases arising under the ``takings´´ clause of the Fifth Amendment to the U.S. Constitution." This clause provides, "nor shall private property be taken for public use without just compensation". While many of the leading cases in this area deal with real property rights and environmental issues, this clause also has application to intangible property in the technology sector, such as in compulsory licensing of patents and copyrights in music or software, and infringement of patents and copyrights by governmental entities.

The Court of Federal Claims, which has national jurisdiction, is authorized to hear primarily money claims founded upon the Constitution, federal statutes, executive regulations, or contracts, express or implied-in-fact, with the United States.

FCC Releases Agenda for August 6 Meeting

7/30. The Federal Communications Commission (FCC) announced the agenda for its meeting on Wednesday, August 6.

The FCC's Wireless Telecommunications Bureau (WTB), and the Department of Agriculture's (USDA) Rural Utilities Service (RUS) Administrator, will report on the recently launched USDA/FCC initiative to increase broadband deployment and wireless access for the benefit of rural consumers.

The FCC will consider a Report and Order concerning the Alaska Bush Earth Station policy. See, February 11, 2002 NPRM [10 pages in PDF] in which the FCC proposed to eliminate the "Bush Policy", which "precludes installing or operating more than one satellite earth station in any Alaskan Bush community1 for competitive carriage of interstate Message Telephone Service (``MTS´´) communications -- i.e., ordinary interstate, interexchange toll telephone calls."  This is IB Docket No. 02-30 and RM-7246.

The FCC will consider a Notice of Proposed Rulemaking (NPRM) regarding rules, policies and procedures for digital station operations for low power television, TV translators and TV booster stations, which primarily provide television service to smaller geographic regions and rural communities.

The FCC's Wireline Competition Bureau (WCB) will report on the growth of subscribership to high-speed service during the last three years.

The FCC's Consumer & Governmental Affairs Bureau and the Office of Strategic Planning will report on the FCC's outreach and coordination initiatives to rural America.

The meeting will be web cast. It will be held at 9:30 AM in the FCC, Commission Meeting Room (TW-C305), 445 12th Street, SW.

Thursday, July 31

9:30 AM. The Senate Commerce Committee will hold a business meeting. The agenda includes consideration of S 150, the "Internet Tax Non-discrimination Act of 2003", and S 1478, the "National Telecommunications and Information Administration Reauthorization Act of 2003". See, notice. Press contact: Rebecca Hanks (McCain) 202 224-2670 or Andy Davis (Hollings) at 202 224-6654. Location: Room 253, Russell Building.

9:30 AM. The Senate Banking Committee will meet to mark up two bills, including S 627, the "Unlawful Internet Gambling Funding Prohibition Act", a bill to prevent the use of certain payments instruments, credit cards, and fund transfers for unlawful internet gambling. The Committee will then hold a hearing on measures to enhance the operation of the Fair Credit Reporting Act. Location: Room 538 Dirksen Building.

? 9:30 AM. The Senate Judiciary Committee might hold an executive business meeting. The agenda includes consideration of several judicial nominees, and several bills, including S 1177, the "Prevent All Cigarette Trafficking (PACT) Act of 2003". See, story titled "Senators Introduce Bill to Regulate Internet Cigarette Sales" in TLJ Daily E-Mail Alert No. 675, June 6, 2003. The judicial nominations are Steven Colloton (U.S. Court of Appeals for the Eighth Circuit), James Browning (District of New Mexico), Brent McKnight (Western District of North Carolina), David Proctor (Northern District of Alabama), Kevin Castel (Southern District of New York), Sandra Feuerstein (Eastern District of New York), Richard Holwell (Southern District of New York), and Stephen Robinson (Southern District of New York). The DOJ nominations are Rene Acosta to be an Assistant Attorney General in charge of the Civil Rights Division, and Daniel Bryant to be an Assistant Attorney General in charge of the Office of Legal Policy. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. This Committee frequently changes the time and agenda of its meetings without notice. Location: Room 226, Dirksen Building.

10:00 AM. The President's Export Council subcommittee on Export Administration (PECSEA) will hold a meeting. See, notice in the Federal Register: July 15, 2003, Vol. 68, No. 135, at Page 41782. Location: Room 3884, Department of Commerce, 14th Street between Pennsylvania and Constitution Avenues, NW.

Deadline to submit applications for loans or combination loans and grants to the Rural Utilities Service (RUS) under its FY2003 Distance Learning and Telemedicine Program. See, notice in Federal Register, March 3, 2003, Vol. 68, No. 41, at Page 9973.

2:30 PM. The Senate Commerce Committee's Communications Subcommittee will hold a hearing on the Internet Corporation for Assigned Names and Numbers (ICANN). The witnesses will be Nancy Victory (National Telecommunications and Information Administration), Paul Twomey (P/CEO of ICANN), Ari Balough (SVP of VeriSign), Alan Davidson (Center for Democracy and Technology), and Paul Stahura (CEO of eNom). Sen. Conrad Burns (R-MT) will preside. See, notice. Press contact: Rebecca Hanks (McCain) 202 224-2670 or Andy Davis (Hollings) at 202 224-6654. Location: Room 253, Russell Building.

Monday, August 4

The Senate is scheduled to begin its August recess.

Tuesday, August 5

10:00 AM - 12:00 NOON. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will meet to prepare for the meeting of the International Telecommunications Union's ITU-D, Study Groups 1 and 2, in Geneva, Switzerland on September 2-11, 2003. See, notice in Federal Register, July 22, 2003, Vol. 68, No. 140, at Page 43413. Location: DOS, Room 2533-A.

Wednesday, August 6

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 Federal Communications Commission (FCC) in response to its Notice of Inquiry [21 pages in PDF] in its proceeding titled "In the Matter of Inquiry Regarding Carrier Current Systems, including Broadband over Power Line Systems". See, notice in the Federal Register, May 23, 2003, Vol. 68, No. 100, at Pages 28182 - 28186. See also, story titled "FCC Announces NOI Regarding Broadband Over Powerlines" in TLJ Daily E-Mail Alert No. 628, April 24, 2003, and story titled "FCC Releases NOI on Broadband Over Power Lines" in TLJ Daily E-Mail Alert No. 656, May 7, 2003.This is ET Docket No. 03-104. For more information, contact Anh Wride at 202 418-0577 or

POSTPONED. The Federal Communications Commission (FCC) will hold an auction of Direct Broadcast Satellite (DBS) Service Licenses. This is Auction No. 52. See, notice of postponement in Federal Register, June 20, 2003, Vol. 68, No. 119, at Page 36989.

Thursday, August 7

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Microsoft v. Multi-Tech Systems, No. 03-1138, and Multi-Tech Systems v. Net2Phone, No. 03-1139. This is an appeal from the U.S. District Court (DMinn) in a patent infringement case involving data communications technology. Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM - 12:00 NOON. The Federal Communications Commission (FCC) Office of Engineering and Technology (OET) will sponsor a tutorial titled "Fiber to the Home Technology". Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room). See, notice [PDF].

SEC Chairman Discusses Tech Sector

7/30. William Donaldson, the Chairman of the Securities and Exchange Commission (SEC), gave a speech in Washington DC in which he gave his take on the technology sector.

William DonaldsonDonaldson (at right) stated that "The mid-1990s saw the beginning of the full flourish of the so-called ``new economy´´ in America. Not only had the economy changed, but so had living in America. The personal computer became nearly omnipresent in businesses and in many homes. There were revolutions in information technology and communications. The Internet changed the way people did business, and the way they lived their lives."

He continued that "The stock market reflected the enormity of the changes taking place in the economy and society. Stock averages soared at increasing rates from the mid-1990s through early 2000. New entrants to the market were among the biggest gainers, especially those that symbolized the ``´´ sector of the economy. The IPO of then fifteen-month old Netscape in August 1995 was a harbinger for market watchers -- the price of Netscape went up 150% on the first day of trading. During the market boom there were IPOs where the first-day price increase left Netscape in the dust. Communications, the explosion of information technology and changes in the culture of equity investing brought millions of individuals with their savings into our stock markets for the first time."

"Starting in the second quarter of 2000, the bubble burst. Stock prices plummeted. Investors fled the markets. And the IPO market disappeared", said Donaldson.

He also commented about the framework for regulating securities markets. "We also are taking a comprehensive look at the complex issues involving the structure of our markets -- including their regulation, the balance between competition and fragmentation, and the use of market data -- all in the context of our global marketplace. These market structure issues are among the thorniest the Commission faces, but also the most important. Revolutions in technology and communications and the unrelenting pace of globalization make it imperative that we revisit on a comprehensive basis the framework of our system for regulating markets."

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