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June 21, 2004, 9:00 AM ET, Alert No. 922.
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House Subcommittee Approves Spyware Bill

6/17. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection amended and approved HR 2929, the "Securely Protect Yourself Against Cyber Trespass Act" or "SPY ACT". This is Rep. Mary Bono's (R-CA) anti spyware bill.

This bill was introduced on July 25, 2003 by Rep. Bono and Rep. Edolphus Towns (D-NY). See, story titled "Rep. Bono Introduces Spyware Bill" in TLJ Daily E-Mail Alert No. 706, July 29, 2003.

The Subcommittee approved an amendment in the nature of a substitute [18 pages in PDF] offered by Rep. Clifford Stearns (R-FL), the Chairman of the Subcommittee, by unanimous voice vote. It then approved the bill, as amended, by unanimous voice vote.

Rep. Cliff StearnsRep. Stearns (at right) stated at the meeting that the amendment addresses "a number of concerns regarding the activity, targeted, definitional issues, and scope of the bill.".

Specifically, said Rep. Stearns, "the amendment does the following:
 • Prohibits specific unfair deceptive behavior related to spyware.
 • Provide categories and examples of such behavior, including hijacking home pages, and key stroke logging.
 • Creates an opt-in for transmitting enabling any information collection program.
 • Specifically defines an information collection program.
 • Requires a disable and an identity function for the program.
 • Creates robust enforcement and penalties for violation, including civil penalties up three times what can be imposed under the FTC Act, or seek damages up to 3 million dollars for Section 2 of the bill, and up to one million dollars for violation of Section 3 of the bill.
 • Preempts similar state statutes.
 • Requires annual reports and reauthorization."

He added that "these provisions are the result of bipartisan efforts, and the desire to draft a balanced bill that will strike at the spyware offenders, while not affecting legitimate activity that uses similar technology."

He concluded that "we are ahead of the curve. Spyware is growing menace that needs to be contained and eliminated. Our efforts have produced legislation that will directly benefit the American consumer, and empower efforts to rid the internet of unfair or deceptive behavior related to spyware, a result the will benefit all of us, individually, and our economy as a whole."

Rep. Edolphus Towns (D-NY) called the bill "a great step in the right direction", but added that he has some reservations about the current version of the bill, including the effect upon network security if one user denies permission regarding the collection of information relevant to security.

Rep. Joe Barton (R-TX), the Chairman of the full Committee, stated that the bill "will soon go to the floor, and sometime this year become law."

Rep. Mary BonoRep. Bono (at left) spoke with reporters after the meeting. She predicted that the Senate will take up the House bill. She added, "I don't see problems over there."

She also said that "Microsoft has been involved in all of the discussions", and "they are still at the table with us". She commented that "we don't want to stop good uses" such as "Microsoft learning why their software is crashing".

Prohibited Deceptive Acts or Practices. Section 2 prohibits deceptive acts or practices related to spyware. It provides that "It is unlawful for any person, who is not the owner or authorized user of a protected computer, to engage in deceptive acts or practices in connection with any of the following conduct with respect to the protected computer". Section 2 then enumerates nine categories of such deceptive acts or practices.

First, it prohibits "Taking control of the computer". The bill provides several examples, including "utilizing such computer or computing services to send unsolicited information or material to others", and "delivering advertisements that a user of the computer cannot close without turning off the computer or closing all sessions of the Internet browser for the computer".

Second, it prohibits "Modifying settings related to the computer's access to or use of the Internet". It then lists as examples altering "the Web page that appears when the owner or authorized user launches an Internet browser", altering "the default provider used to access or search the Internet", altering bookmarks, and altering security settings.

Third, it prohibits "Collecting personally identifiable information through the use of a keystroke logging function".

Fourth, it prohibits "Monitoring, or analyzing the content of, the Web pages or other online locations accessed using the computer."

Fifth, it prohibits "Inducing the owner or authorized user to install a computer software component onto the computer, or preventing reasonable efforts to block the installation or execution of, or to disable, a computer software component". It lists as examples, "presenting the owner or authorized user with an option to decline installation of a software component such that, when the option is selected by the owner or authorized user, the installation nevertheless proceeds" and "causing a computer software component that the owner or authorized user has removed or disabled to automatically reinstall or reactivate on the computer".

Sixth, it prohibits "Representing that installing a separate software component or providing log-in and password information is necessary for security or privacy reasons, or that installing a separate software component is necessary to open, view, or play a particular type of content."

Seventh, it prohibits "Installing or executing computer software on the computer, without the permission of the party named as the provider of the software, to deceive the owner or authorized user about the identity of the person or service responsible for the functions performed or the content displayed by such computer software."

Eighth, it prohibits "Installing or executing on the computer one or more additional computer software components with the intent of causing a person to use such components in a way that violates any other provision of this section."

And finally, Section 2 of the bill prohibits "Removing, disabling, or rendering inoperative a security, anti-spyware, or anti-virus technology for the computer."

Prohibited Information Collection Practices. Section 3 of the bill prohibits the collection of certain information without notice and consent. It states that "it is unlawful for any person (1) to transmit to a protected computer, which is not owned by such person and for which such person is not an authorized user, any information collection program, or (2) to enable the operation of any information collection program with respect to such a protected computer, unless, before such transmission or enabling, the owner or an authorized user of the protected computer has consented to such transmission or enabling pursuant to notice ... and such information collection program includes the functions required under subsection (d)."

Section 3(d) then requires that "each information collection program" must allow users "to remove the program or disable operation of the program with respect to such protected computer by a function that (A) is easily identifiable to a user of the computer; and (B) can be performed without undue effort or knowledge by the user of the protected computer."

Section 3(d) also requires that "each information collection program" must have an "identity function". That is, it requires that "each display of an advertisement directed or displayed using such information is accompanied by a statement that clearly identifies the information collection program."

Exceptions and Immunities. The bill also contains several exceptions and immunities.

Section 3 contains an exemption titled "Law Enforcement Authority". However, while it does exempt law enforcement authorities, it is far broader. It exempts information collection programs that are conducted pursuant to any "court order, or a compulsory administrative process". It does not require that the information collector be a law enforcement agency, or even that it be a government agency.

Section 3 contains an immunity clause for telecommunications carriers, information service providers, and other providers of underlying transmission capability. That is, such an entity "shall not be liable under this section solely because (1) the carrier or provider transmitted, routed, stored, or provided connections for an information collection program through a system or network controlled or operated by or for the carrier or provider; or (2) of the intermediate and transient storage of such a program in the course of such transmission, routing, storing, or provision of connections."

The definitional section provides that the term software does not include cookies.

Implementation and Enforcement. The bill gives rulemaking and civil enforcement authority to the Federal Trade Commission (FTC). It provides that "the maximum civil penalty for a violation of this Act shall be one of the following amounts, as the Commission, in its discretion, applies to such a violation:
  (1) $33,000 for each violation, except that in applying this subparagraph each separate protected computer to which an information collection program is transmitted, or with respect to which such a program is enabled, in violation of this Act shall be treated as a separate violation.
  (2) In the case of a violation of (A) section 2(a), $3,000,000; and (B) section 3(a), $1,000,000, ..."

The bill preempts state laws that contain provisions similar to those contains in Sections 2 and 3. However, it does not preempt the applicability of state trespass, contract, or tort laws.

The bill requires the FTC to submit annual reports to Congress.

The bill sunsets on December 31, 2008.

The bill does not create a private right of action.

Treasury Secretary Comments on ETI Repeal Bills

6/18. John Snow, Secretary of the Treasury, commented upon House passage of HR 4520, the "American Jobs Creation Act of 2004". This bill would, among other things, repeal the extraterritorial income (ETI) tax regime.

Snow stated that "I would like to thank the House for taking action to move the FSC/ETI process forward to eliminate sanctions. We want to increase the ability of American companies to succeed in a worldwide economy and lay the foundation for increased growth and job creation for American workers. Passing the FSC/ETI legislation is an important step toward ending the burden of the tariffs currently being imposed on U.S. exports under the WTO sanctions. We will continue our efforts to work with the Conferees to ensure that legislation is signed into law that will help us comply with our WTO obligations, is as close to budget neutral as possible, and will strengthen our economy and help manufacturers and other job creators."

The House passed HR 4520 on June 17 by a vote of 251-178. See, Roll Call No. 259. The Senate passed its ETI repeal bill, S 1637, the "Jumpstart Our Business Strength (JOBS) Act", on May 11 by a vote of 92-5.

Legislators Introduce Bills Pertaining to NCIC Database, Data Mining and FISA Surveillance

6/16. Sen. Ted Kennedy (D-MA), Sen. Patrick Leahy (D-VT), Sen. Richard Durbin (D-IL), Sen. Russ Feingold (D-WI), and Sen. Jon Corzine (D-NJ) introduced  S 2528, the "Civil Liberties Restoration Act of 2004". Rep. Howard Berman (D-CA) and Rep. William Delahunt (D-MA) introduced HR 4591, the companion bill in the House.

This is a huge bill. Much of its pertains to immigration law and procedure. However, it also contains numerous technology related provisions pertaining to (1) the FBI's National Crime Information Center (NCIC) database, (2) government data mining, (3) disclosure of surveillance and searches performed pursuant to the Foreign Intelligence Surveillance Act (FISA), including electronic surveillance and use of pen registers and trap and trace devices (PR&TTDs), in criminal proceedings. PR&TTDs is a term that now encompasses internet routing and addressing information.

Much of the bill is not technology related. Titles I and II pertain to immigration law and procedure. They would impose limitations upon the use of closed immigration hearings, specify due process notice requirements for aliens arrested or detained under the Immigration and Nationality Act, revise the provisions regarding bond, and replace the Executive Office of Immigration Review with a new Immigration Review Commission within the Department of Justice.

Title III would terminate the Department of Homeland Security's National Security Entry-Exit Registration System (NSEERS), and limit penalties for violation of certain sections of the Immigration and Nationality Act.

NCIC Database and the Privacy Act. Title III would also provide that "Data entered into the National Crime Information Center database must meet the accuracy requirements of section 552a of title 5, United States Code (commonly referred to as the ``Privacy Act´´)." (Parentheses in original.)

Sen. Kennedy offered this explanation. "Our bill also protects the integrity of the National Crime Information Center database. For decades, in maintaining the database, the Department of Justice was required to obey the Privacy Act, which requires each agency to maintain its records ``with such accuracy, relevance, timeliness, and completeness as is reasonably necessary to assure fairness to the individuals in the determination.´´"

Sen. Kennedy continued that "In March 2003, Attorney General Ashcroft issued a regulation stating that these requirements no longer applied to the NCIC database, and justified the exemption because ``in the collection of information for law enforcement purposes it is impossible to determine in advance what information is accurate, relevant, timely and complete.´´"

The FBI published a notice in the Federal Register (March 24, 2003, Vol. 68, No. 56, at Pages 14140 - 14141) in which it concluded that "The Department of Justice (DOJ), Federal Bureau of Investigation (FBI), is exempting the FBI's National Crime Information Center (NCIC) ... to avoid interference with law enforcement functions and responsibilities of the FBI". See also, story titled "EPIC Seeks OMB Reversal of FBI Exemption of NCIC Database from Privacy Act Requirements" in TLJ Daily E-Mail Alert No. 841, February 23, 2004.

Sen. Kennedy said that "Our legislation requires the Attorney General to comply with the Privacy Act in maintaining the database. Circumventing this statutory obligation poses significant risks not only for individuals whose files may be part of this data system, but also for communities that rely on law enforcement to employ effective, reliable methods for protecting public safety."

Government Data Mining. The bill would require the head of every federal department and agency to prepare annual reports to the Congress on that department's or agency's data mining activities.

The bill also enumerates the required contents of these reports. The requirements include a discussion of the technology, and the impact upon privacy and civil liberties.

The bill defines data mining as "a query or search or other analysis of 1 or more electronic databases, where (A) at least 1 of the databases was obtained from or remains under the control of a non-Federal entity, or the information was acquired initially by another department or agency of the Federal Government for purposes other than intelligence or law enforcement; (B) the search does not use a specific individual's personal identifiers to acquire information concerning that individual; and (C) a department or agency of the Federal Government is conducting the query or search or other analysis to find a pattern indicating terrorist or other criminal activity."

Sen. Kennedy stated that "Through comprehensive data-mining, many records that people believe are private can be collected by computer, fed into a database and used by the government without their knowledge. Law enforcement must have the necessary means to protect our safety, but the use of data-mining technology should not be allowed to threaten privacy and civil liberties." He added that the reporting requirement would enable the Congress to "exercise its oversight authority over federal agencies using this technology."

Disclosure of Surveillance and Searches in Criminal Proceedings. The bill would amend the Foreign Intelligence Surveillance Act's (FISA) provisions regarding discovery in criminal proceedings of applications, orders and other materials relating to electronic surveillance and searches under the FISA.

The FISA, which is codified in Title 50, applies to surveillance of agents of foreign governments and international terrorists, but not to ordinary criminal proceedings, which are governed by Title 18. The FISA and the Criminal Code also have vastly different standards for issuance of court orders authorizing surveillance. It is much easier to obtain a FISA order than, for example, a Title III wiretap order.

However, the distinction FISA and Criminal Code surveillance was affected by a section of the 2001 PATRIOT Act.

The PATRIOT Act did not change the standard for either Title III wiretaps (a showing of probable cause) or pen register or trap and trace orders (an assertion of mere relevance to a criminal investigation). It did, however, lower the standard for issuance of a FISA order. The statute had previously required that the "primary purpose" of the surveillance be foreign intelligence gathering. This was a very low standard to begin with. Then, the PATRIOT Act changed this to "a significant purpose".

That is, the PATRIOT Act made it easier for the government to get a FISA order. This is also significant for non-FISA prosecutions, because FISA investigations regarding foreign intelligence also can uncover evidence of domestic crimes, which result in domestic criminal prosecutions.

Opponents of the change in the FISA standard have argued that it opens the door for unscrupulous prosecutors to obtain a FISA order on the pretext that it is for foreign intelligence or terrorism purposes, but with the concealed purpose of using the evidence collected for prosecutorial purposes, thereby evading the Fourth Amendment protections against unreasonable searches and seizures that the Title III process is intended to protect.

There are legislative proposals to revert from the "a significant purpose" standard back to the "primary purpose" standard. However, the Kennedy and Berman bills would not make this change. Rather, these bills would make it easier for defendants in criminal cases to learn about the use of the FISA process against them.

Currently, the FISA, at 50 U.S.C. § 1806(f), which addresses disclosure of "electronic surveillance", provides that "the court may disclose to the aggrieved person, under appropriate security procedures and protective orders, portions of the application, order, or other materials relating to the surveillance only where such disclosure is necessary to make an accurate determination of the legality of the surveillance."

The bill would change this to "the court shall disclose, if otherwise discoverable, to the aggrieved person, the counsel of the aggrieved person, or both, under the procedures and standards provided in the Classified Information Procedures Act (18 U.S.C. App.), portions of the application, order, or other materials relating to the surveillance unless the court finds that such disclosure would not assist in determining any legal or factual issue pertinent to the case."

Likewise, 50 U.S.C. § 1845(f), which addresses "pen registers and trap and trace devices", provides similarly restrictive language regarding disclosure of PR&TTDs. The Kennedy and Berman bills would provide that "Unless the court finds that such disclosure would not assist in determining any legal or factual issue pertinent to the case, the court shall disclose, if otherwise discoverable, to the aggrieved person, the counsel of the aggrieved person, or both, under the procedures and standards provided in the Classified Information Procedures Act (18 U.S.C. App.), portions of the application, order, or other materials relating to the use of the pen register or trap and trace device, as the case may be, or evidence or information obtained or derived from the use of a pen register or trap and trace device, as the case may be."

PR&TTDs are telephone industry terms that refer to capturing outgoing and incoming telephone numbers. The PATRIOT Act provided that PR&TTD authority extends to internet addressing and routing information, such as the "To:" and "From:" lines of e-mail, and uniform resource locators (URLs) accessed by web browsers.

Sen. Kennedy said this. "The bill also protects privacy by ensuring that constitutional limitations apply to secret surveillance. The Patriot Act amended the Foreign Intelligence Service Act to permit surveillance or searches when a ``significant purpose´´, not just the ``primary purpose´´, of the surveillance or search is foreign intelligence. Under current procedures, when such evidence is brought before a court, it is nearly impossible for a criminal defendant to contest its introduction, because the government's application for the search is kept secret. When such evidence is used in criminal cases, the court should disclose the application and related materials to the defendant, subject to the Classified Information Procedures Act, which offers a balanced and effective way to protect both national security information and the rights of defendants."

The bill also adds a new § 502 to the FISA, regarding business records (and renumbers the old § 502 as 503).

Section 215 of the PATRIOT Act rewrote § 501 of the FISA, which is codified in Title 50 as § 1861. It pertains to "Access to Certain Business Records for Foreign Intelligence and International Terrorism Investigations". § 215 (of the PATRIOT Act) replaced §§ 501-503 (of the FISA) with new language designated as §§ 501 and 502.

Currently, § 501 (as amended by § 215) requires that an application to a judge or magistrate "shall specify that the records concerned are sought for an authorized investigation conducted in accordance with subsection (a)(2) to obtain foreign intelligence information not concerning a United States person or to protect against international terrorism or clandestine intelligence activities."

While the statute does not expressly include library records, it is not disputed that library records could be obtained. However, John Ashcroft stated in September 2003 that it has not been used to obtain library records.

The Kennedy and Berman bills would provide that "Any disclosure of applications, information, or items submitted or acquired pursuant to an order issued under section 501, if such information is otherwise discoverable, shall be conducted under the procedures and standards provided in the Classified Information Procedures Act ..."

Rep. Berman stated in a release that "It insures that when the Attorney General asks a business or a library for personal records, he must be targeting an agent of a foreign power."

Washington Tech Calendar
New items are highlighted in red.
Monday, June 21

The House will meet at 12:30 AM for morning business, and at 2:00 PM for legislative business. The House will consider several non-technology related items under suspension of the rules. See, Republican Whip Notice.

The Senate will meet at 1:00 PM for morning business. It will then resume consideration of S 2400, the Department of Defense authorization bill for FY 2005.

The Supreme Court will return from the recess that it began on June 14.

8:30 AM - 5:30 PM. The Federal Trade Commission (FTC) will hold a workshop on the uses, efficiencies, and implications for consumers associated with radio frequency identification (RFID) technology. Howard Beales, Director of the FTC's Bureau of Competition will speak at 8:30 Am. See, FTC web page for this workshop, and notice in the Federal Register, April 15, 2004, Vol. 69, No. 73, at Pages 20523 - 20525. The FTC states that "Reporters who wish to participate, but who cannot attend, can call 1-800-377-4872 Chairperson Bruce Jennings, Confirmation Number 24604632". Location: FTC Conference Center, 601 New Jersey Ave., NW.

1:00 PM. The Center for Democracy and Technology (CDT) will host a telephone press conference to discuss the Supreme Court's opinion in Ashcroft v. ACLU, a challenge to the constitutionality of the Child Online Protection Act (COPA). If the Supreme Court does not issue the opinion on this date, then the CDT will reschedule this conference for the next likely date for the issuance of the opinion -- June 28. To participate, call 334 260-2557 and provide security code 36991.

5:00 PM. The House Rules Committee will meet to adopt a rule for consideration of HR 4613, the appropriations bill for the Department of Defense for FY 2005.

Tuesday, June 22

The House will meet at 9:00 AM for morning hour, and at 10:00 AM for legislative business. The House will consider several non-technology related items under suspension of the rules. It will then consider HR 4613, the Department of Defense Appropriations Act for Fiscal Year 2005. See, Republican Whip Notice.

12:00 NOON. The Congressional Internet Caucus Advisory Committee will host a lunch. The speaker will be Kazuo Hirai, P/CEO of Sony Computer Entertainment America. He will speak on the "Potential and Opportunity Facing the Internet". See, notice. Lunch will be served. RSVP to or 202 638-4370. Location: Room 325, Russell Building.

3:00 PM. The Personal Technology Freedom Coalition (PTFC) will hold a press conference to announce its support for HR 107, the "Digital Media Consumers' Rights Act of 2003", a bill to undermine the effectiveness of the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA). The speakers will include Rep. Joe Barton (R-TX), Rep. Rick Boucher (D-VA), Rep. John Doolittle (R-CA), Herschel Abbott (BellSouth), and Mark Cooper (Consumer Federation of America) The PTFC is a just formed group. Location: Room 2218, Rayburn Building.

5:45 - 8:00 PM. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) program titled "Migration Trends in Spectrum Use and Regulation" The speakers are all Federal Communications Commission (FCC) officials: Julius Knapp (FCC Office of Engineering and Technology), Kenneth Carter (FCC Office of Strategic Plans and Policy Analysis), and Peter Tenhula (FCC Wireless Telecommunications Bureau). To register, contact Wendy Parish at The FCBA states that "After 6:00 p.m. the doors will be locked." Location: FCC, Commission Meeting Room, 445 12th Street, SW.

CANCELLED. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council VII will meet. See, notice of cancellation [PDF].

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding broadband over powerline systems. The FCC adopted this NPRM on February 12, 2004. See, story titled "FCC Adopts Broadband Over Powerline NPRM" in TLJ Daily E-Mail Alert No. 836, February 13, 2004. The FCC released the text of this NPRM on February 23, 2004. This NPRM is FCC 04-29 in ET Docket Nos. 03-104 and 04-37. See, notice in the Federal Register, March 17, 2004, Vol. 69, No. 52, at Pages 12612-12618. See also, Order Granting Extension of Time [3 pages in PDF].

Wednesday, June 23

The House will meet at 10:00 AM. See, Republican Whip Notice.

9:30 AM. The Senate Commerce Committee will hold a hearing on the Department of Homeland Security's (DHS) FY 2005 budget request, the enhanced Computer Assisted Passenger Pre-screening System (CAPPS), and other issues. This witnesses will include Asa Hutchinson (Under Secretary, Border and Transportation Security, DHS), Thomas Kinton (Massachusetts Port Authority), James May (Air Transport Association America), Patricia Friend (Association of Flight Attendants-CWA). Location: Room 253, Russell Building.

10:00 AM. The Senate Judiciary Committee will hold a hearing on pending judicial nominees. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.

11:30 AM. The Senate Governmental Affairs Committee will hold a hearing on the nomination of David Stone to be Assistant Secretary of Homeland Security, for the Transportation Security Administration (TSA). See, notice. Location: Room 342, Dirksen Building.

1:30 PM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "Protecting Homeland Security: A Status Report on Interoperability Between Public Safety Communications Systems". The hearing will be webcast by the Committee. See, notice. Press contacts: Jon Tripp (Barton) at 202 225-5735 or Sean Bonyun (Upton) at 202 225-3761. Location: Room 2322, Rayburn Building.

2:30 PM. The Senate Commerce Committee's Subcommittee on Competition, Foreign Commerce, and Infrastructure will hold a hearing titled "The Future of Peer to Peer (P2P) Technology". Howard Beales (Director of the Federal Trade Commission's Bureau of Consumer Protection), John Rose (The EMI Group), Michael Weiss (StreamCast Networks -- Morpheus), and Les Ottolenghi (Intent MediaWorks). Curt Pederson (Oregon State University). See, notice. Location: Room 253, Russell Building.

Thursday, June 24

The House will meet at 10:00 AM. See, Republican Whip Notice.

9:00 AM. The Senate Governmental Affairs Committee will hold the second part of its hearing titled "Buyer Beware: The Danger of Purchasing Pharmaceuticals Over The Internet". See, notice. Location: Room 342, Dirksen Building.

12:15 - 2:00 PM. The DC Bar Association's Arts, Entertainment and Sports Law Section will host a lunch titled "Indecent Exposure: Broadcast Standards and the First Amendment". The speakers will be Lee Carosi (Majority Counsel, Senate Commerce Committee) Thomas Carpenter (American Federation of Television and Radio Artists), Robert Corn-Revere (Davis Wright & Tremaine), Kelly Zerzan (Majority Counsel, House Commerce Committee), and John Davis Malloy. Prices vary. See, notice. For more information, call 202-626-3463. Location: Jenner & Block, 601 13th Street, NW, Concourse Level.

12:30 PM. The Federal Communications Bar Association (FCBA) will hold its Annual Meeting and Luncheon. The speaker will be Federal Communications Commission (FCC) Commissioner Kathleen Abernathy. Location: J.W. Marriott, 1331 Pennsylvania Ave., NW.

Deadline to submit comments to the Federal Trade Commission (FTC) to assist it in preparing its report (which is required by the Fairness to Contact Lens Consumers Act, 15 U.S.C. § 7601 et seq.) on the strength of competition in the sale of prescription contact lenses. See, notice in the Federal Register, April 22, 2004, Vol. 69, No. 78, at Pages 21833 - 21836.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rule making (NPRM) regarding expanding the disruption reporting requirements beyond wireline carriers. See, notice in the March 26, 2004, Vol. 69, No. 59, at Pages 15761 - 15774.

Friday, June 25

The House will meet at 9:00 AM. See, Republican Whip Notice.

5:45 - 8:00 PM. The Federal Communications Bar Association (FCBA) Cable Committee and Legislation Committee will hold a joint brown bag lunch. The speakers will be majority and minority counsel for the House Commerce Committee. RSVP to Wendy Parish at Location: Willkie Farr & Gallagher, 1875 K Street, NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding presubscribed interexchange carrier (PIC) change charge policies. This NPRM is FCC 04-96 in CC Docket No. 02-53. See, notice in the Federal Register, May 26, 2004, Vol. 69, No. 102, at Pages 29913 - 29917.

Rep. Dreier Addresses Economic Growth, Productivity, and Information Technology

6/18. Rep. David Dreier (R-CA) gave a lengthy speech in the House on the economy and economics. He focused on the "productivity revolution", and in particular, on the role of information technology in boosting productivity.

He said that "productivity growth is so fundamental to both growth in GDP and a rising standard of living that most economists agree it is the single most important economic factor for improving our quality of life."

"Large, sustained bursts of productivity growth have fundamentally changed our entire economy in the past, and I believe we are witnessing a new wave of productivity growth that is changing the face of our economy once again", said Rep. Dreier.

"The tech boom of the 1990s clearly changed the way Americans do business. The Internet and the rapid proliferation of personal computers allowed workers to communicate efficiently and quickly. Data could be transferred with the click of a mouse. The world became a smaller place, and we all were able to accomplish more in less time and with fewer resources."

Rep. David DreierRep. Dreier is the Chairman of the House Rules Committee, which performs a legislative gate keeping function in the House. His address is published in the Congressional Record, June 18, 2004, at pages H4573-7.

He reviewed recent trends in sales and employment in electronic games industry, online advertising, and e-commerce. He said that "While spending on TVs increased by 5 percent last year, spending on other forms of electronic entertainment like video gaming jumped by almost 11 percent. The result has been growing employment in high-tech entertainment industries. For example, companies that create Web content like eBay and Yahoo have created several thousand new jobs in just the last few months."

"Growing Internet use has also spurred growth in online advertising and e-commerce. Large employers in these sectors like and Google are also hiring at a rapid rate for the first time in several years. Employment in Internet publishing and broadcasting is on the rise, growing 7 percent in the past year", said Rep. Dreier. "But demand for Internet content and computer gaming and the jobs they help create are obviously just a narrow slice of the much bigger high-tech picture, and demand for high-tech products overall is just a narrow slice of the total impact that the industry has on our economy at large."

He then elaborated on the IT based productivity revolution. He stated that "the high-tech boom has been the key factor in the emergence of our 21st century economy and the productivity revolution that ushered it in. Experts and analysts agree that our 1990s tech boom was to a great extent made possible by the falling prices of IT hardware. As demand met supply, companies across America incorporated high-tech products and services in their business plans and the results were nothing less than revolutionary. This process resulted in job creation in fields like systems administration and IT product manufacturing."

"But looking at the impact of the high-tech boom in terms of job creation in directly related fields is like saying the significance of the invention of the wheel was that it created wheel-producing jobs. The real significance of the information technology revolution is that it went hand in hand with our productivity revolution. It fundamentally changed how business does business and made American workers tremendously more productive. And it unleashed a powerful new wave of innovation and entrepreneurship", said Rep. Dreier.

"Online advertising and computer gaming are just the very tip of the iceberg. The high-tech boom has, for example, enabled 430,000 Americans, nearly half a million Americans, to make their entire living by selling and buying on eBay", said Rep. Dreier. "By making opportunities for entrepreneurship cheaper and more accessible, the Internet and our high tech economy are helping millions of Americans realize their dream of being their own boss and doing something that they love."

He continued that "This powerful American drive to innovate and create and work independently is at the crux of our productivity revolution. American innovation led to the creation of new information technologies, but it did not just stop there. IT products do not integrate themselves into the economy. Hard working and creative Americans harnessed technology, incorporated it into nearly every aspect of our lives, and brought about a wave of productivity that is transforming our entire economy."

His analysis of the origins, nature and importance of productivity gains is similar to that of Federal Reserve Board Chairman Alan Greenspan. Greenspan has given many speeches on this subject in recent years that have been covered in the TLJ Daily E-Mail Alert.

Editor's Note: One way to locate archived Tech Law Material is to do a Google search. For example, enter " Greenspan speech productivity" to find coverage of Greenspan's speeches.

11th Circuit Limits Private Suits by DBS Providers Against Pirates

6/15. The U.S. Court of Appeals (11thCir) issued its opinion [12 pages in PDF] in Directv v. Treworgy, holding that 18 U.S.C. § 2520(a) does not provide a private right of action against persons who possess devices used to intercept satellite transmissions in violation of 18 U.S.C. § 2512(1)(b), a criminal offense.

Directv provides satellite television programming. It encrypts its transmissions to prevent unauthorized viewing of pay per view and premium programs. Its customers purchase access devices from it to decrypt the satellite transmissions.

Mike Treworgy purchased and possesses two pirate access devices. However, the District Court did not make a finding that he used these devices to intercept Directv's programming.

Directv filed a complaint in U.S. District Court (MDFl) against Treworgy alleging violation of 18 U.S.C. § 2520(a). The District Court held that this section does not create a private right of action for mer possession of pirate access devices.

18 U.S.C. § 2512(1)(b) provides criminal penalties against anyone who intentionally "manufactures, assembles, possesses, or sells any electronic, mechanical, or other device, knowing or having reason to know that the design of such device renders it primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications ..."

18 U.S.C. § 2520, among other things, creates a private right of action for violation of § 2512. It provides, in part, that "Except as provided in section 2511(2)(a)(ii), any person whose wire, oral, or electronic communication is intercepted, disclosed, or intentionally used in violation of this chapter may in a civil action recover from the person or entity, other than the United States, which engaged in that violation such relief as may be appropriate."

The Court of Appeals explained that "The plain language of these provisions addresses two distinct concerns. Section 2520(a) provides a civil remedy for the victim of the theft of an electronic communication. Section 2512(1)(b) provides a criminal punishment for those involved in trafficking devices used for the theft of electronic communications without need of proof that any person has yet been injured by that illegal commerce."

In other words, "Possession of a pirate access device alone, although a criminal offense, creates nothing more than conjectural or hypothetical harm to DTV."

This opinion will make it harder for Directv, and other direct broadcast satellite (DBS) providers, to sue, and hence, deter, theft of their programming. For example, obtaining records from the manufacturers or distributors of pirate access devices regarding purchasers of the devices will be insufficient, at least in the 11th Circuit, to sustain actions against those purchasers. Directv will also have to prove that the purchasers actually used the products that they purchased.

The Court of Appeals based its holding solely on a literal interpretation of the language of the statutes. It did not speculate as to why someone would commit the crime of purchasing a pirate access device, but not then use that device to obtain DBS programming for free.

This case is Directv, Inc. v. Mike Treworgy, U.S. Court of Appeals for the 11th Circuit, App. Ct. No. 03-15313, an appeal from the U.S. District Court for the Middle District of Florida, D.C. No. 03-00428-CV-FTM-29.

FCC News

6/18. The Federal Communications Commission (FCC) announced that on June 14 it adopted an Order amending Section 1.80(b) of its rules to increase the maximum monetary forfeiture penalties. The FCC issued a release, but not the order. This order FCC 04-139.

6/18. The Federal Communications Commission (FCC) announced that on June 14 it adopted a Notice of Apparent Liability for Forfeiture (NAL) against Directv for repositioning a satellite without FCC authorization, in violation of Section 25.117(a) of its rules. This NAL proposes to fine Directv $87,500. The FCC issued a release [PDF] and the NAL [6 pages in PDF]. This NAL is FCC 04-138.

6/18. The Federal Communications Commission (FCC) issued a document [2 pages in PDF] titled "Public Notice" regarding telecommunications relay service (TRS) and internet protocol relay service (IPRS). It states that FCC "has received complaints from vendors, consumers, and TRS providers that people are using the IP Relay to make telephone purchases using stolen or fake credit cards". The Public Notice also states that pursuant to "Title III of the Americans with Disabilities Act of 1990 (ADA)", if merchants "accept telephone orders from the general public, they cannot refuse to accept them from persons with hearing or speech disabilities using TRS."

6/18. The Federal Communications Commission (FCC) published a notice in the Federal Register that summarizes, and sets comments deadlines for, the FCC's Notice of Proposed Rulemaking (NPRM) [38 pages in PDF] regarding use by unlicensed devices of broadcast television spectrum where the spectrum is not in use by broadcasters. Initial comments are due by September 1, 2004. Reply comments are due by October 1, 2004. See, Federal Register, June 18, 2004, Vol. 69, No. 117, at pages 34103-34112.  See also, story titled "FCC Adopts NPRM Regarding Unlicensed Use of Broadcast TV Spectrum" in TLJ Daily E-Mail Alert No. 898, May 14, 2004, and story titled "FCC Releases NPRM Regarding Unlicensed Use of TV Spectrum" in TLJ Daily E-Mail Alert No. 905, May 26, 2004. This NPRM is FCC 04-113 in ET Docket Nos. 04-186 and No. 02-380.

People and Appointments

6/17. The Senate confirmed Alan Greenspan to be Chairman of the Board of Governors of the Federal Reserve System for a term of four years.

6/17. Jack Goldsmith, the Assistant Attorney General in charge of the Office of Legal Counsel, resigned, effective July 30, 2004. See, DOJ release.

6/17. Kenneth Dunn was named Qwest Communications' VP of Corporation Development & Strategy. He went to work for Qwest in 2002 as VP and Deputy General Counsel. See, Qwest release.

More News

6/17. The Senate Judiciary Committee held an executive business meeting. It amended and approved S 2013, the "Satellite Home Viewer Extension Act of 2004". It held over consideration of S 1635, the "L-1 Visa (Intracompany Transferee) Reform Act of 2003".

6/18. The U.S. Court of Appeals (6thCir) issued its opinion in Bridgeport Music v. Diamond Times, a case involving claims of copyright infringement arising out of sampling in rap songs, and attorneys fees under 17 U.S.C. § 505. The Appeals Court affirmed the District Court's summary judgment for defendants. This case is Bridgeport Music, Inc., et al. v. Diamond Time, Ltd., et al., U.S. Court of Appeals for the 6th Circuit, App. Ct. Nos. 03-5003 and 03-5656, appeals from the U.S. District Court for the Middle District of Tennessee, at Nashville, D.C. No. 01-00702, Judge Thomas Higgins presiding.

6/17. The VeriSign filed its First Amended Complaint [74 pages in PDF] with the U.S. District Court (CDCal) against the Internet Corporation for Assigned Names and Numbers (ICANN).

6/15. The National Institute of Standards and Technology (NIST) released a report [4.2 MB in PDF] titled "Computer Security Division - 2003 Annual Report". This is NIST Interagency Report 7111.

6/18. The General Accounting Office (GAO) released a report [100 pages in PDF] titled "Homeland Security: Performance of Information System to Monitor Foreign Students and Exchange Visitors Has Improved, but Issues Remain".

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