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July 16, 2004, 9:00 AM ET, Alert No. 939.
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House Commerce Subcommittee Holds Hearing on RFID Technology

7/14. The House Commerce Committee's Subcommittee on Commerce, Trade and Consumer Protection held a hearing titled "Radio Frequency Identification (RFID) Technology: What the Future Holds for Commerce, Security, and the Consumer".

Rep. Joe Barton (R-TX), the Chairman of the full Committee, stated that "RFID technology works by providing a frequency-emitting tag to a product that can be detected with its range by receivers. The private sector is is already embracing the technology for uses in supply chain management." He also reviewed its potential uses for national defense and homeland security.

Sanjay Sarma of the Massachusetts Institute of Technology (MIT) explained the technology, and gave a demonstration, particularly to show the limited range of the technology, and how objects, such as a person's hand, can interfere with reception of the tag's signal.

"RFID is a way of lubricating the supply chain," said Sarma, "and keeping track of things in the supply chain."

Rep. Joe BartonRep. Barton (at left) added that "the same benefits that improve our standard of living also trigger concerns regarding privacy. Similar to the application of other technologies that have the potential to be misused, RFID technology will present policy considerations as it develops and becomes more prevalent in our lives. But before we jump to conclusions about Orwellian applications, this Committee will continue to examine this technology carefully to determine the facts."

Rep. Barton said that there may be more hearings.

Rep. Cliff Stearns (R-FL), the Chairman of the Subcommittee, presided at this hearing. He stated that "One possible application of this technology involves using readers at a store checkout -- consumers place tagged items in their shopping cart, pass through the checkout where the items are read, and their accounts are automatically updated without waiting in line ... However, this point of sale application raises privacy issues and these questions. Will I be able to disable or remove the tag? What happens to the data harvested from my purchase? How secure is that data, and what prevents third parties from accessing and misusing that information?"

Rep. Janice Schakowsky (D-IL), the ranking Democrat on the Subcommittee, offered the strongest criticism of RFID. She said that RFID technology could be used for inventory management, but "what we are also hearing about, however, are potentially serious Orwellian possibilities of RFID technology  Because of the flexibility of RFID, suppliers and retailers are exploring the possibility of using RFID chips, not only on shipping crates and pallets, but on individual items as well. It is possible to have RFID tags in everything from individual pieces of clothing, as Benetton proposed, to tanks, as the Defense Department is already doing. It has also been quietly suggested, as Mr. Steinhardt from the ACLU will detail in his testimony, that RFID tags could be used in travel documents like passports."

Rep. Jan SchakowskyRep. Schakowsky (at right) warned that "Soon we could have Big Brother and Big Business tuning to the same frequency. Where, not only will they know where you are, but what you are wearing. RFID tags can be as small as a grain of sand. They can be hidden in products and documents without one's knowledge. This raises significant privacy concerns."

She did, however, concede that there are beneficial uses, such as inventory management, automatic payment of highway tolls, smartcard payments for public transportation, and preventing sale of counterfeit pharmaceuticals.

Rep. Ted Strickland (D-OH) advocated the beneficial uses of RFID technology in fighting counterfeiting and abuse of prescription drugs. He also argued, as did Rep. Darrell Issa (R-CA), that the Congress faces similar issues when it examines both RFID technology and spyware technology.

The Subcommittee heard testimony from representatives of companies that are providing or using RFID technology:  Linda Dillman (Wal-Mart), Sandra Hughes (Procter & Gamble), William Galione (Philips Semiconductors), and Brian Matthews (VeriSign). They testified regarding potential uses of the technology, including inventory management, speeding checkout at retail establishments, reducing the sale of counterfeit drugs, and assisting in product recalls.

The Subcommittee also heard from John Molloy, an Irishman who explained how his company, ViaTrace, is using RFID tags affixed to the ears of cows, and electronic databases, to keep track of herds, and thereby better protect the safety of the food supply in Europe.

The Subcommittee also heard from representatives of three interest groups who addressed privacy implications of RFID technology.

Paula Bruening of the Center for Democracy and Technology wrote in her prepared testimony [9 pages in PDF] that "There are many possible applications of RFID that do not pose major privacy concerns. But to the extent that RFID devices can be linked to personally identifiable information, RFID raises important privacy questions. In an era of widespread collection of data about individuals, RFID heightens concerns about the ability of businesses and government using these technologies to create deep, rich profiles about people and their travels, lifestyles, interests and activities."

She advocated passage of "technology neutral baseline privacy legislation", but not legislation specific to RFID technology.

Cédric Laurant of the Electronic Privacy Information Center testified that RFID specific legislation should be enacted to protect the privacy of individuals. He wrote in his prepared testimony that "Legislation should protect consumers from improper use and sharing of data in both the public and the private sector. The legislation would address all forms of RFID-based services, from travel security to employee monitoring, child tracking and amusement park patron management. Congress should rule on legislation specifically targeting the use of RFID in the retail sector and require clear labeling and easy removal of item-level RFID tagging on individual consumer products. Clear labeling and easy removal of tags will ensure that consumers receive proper notice of RFID systems and are able to confidently exercise their choice whether or not to go home with live RFID tags in the products they own."

Barry Steinhardt of the American Civil Liberties Union focused (ACLU) argued that the "most troubling of all are proposals to incorporate RFID tags into government identification documents" such as passports.

He offered this scenario. "RFIDs would allow for convenient, at a distance verification of ID. RFID-tagged IDs could be secretly read right through a wallet, pocket, backpack, or purse by anyone with the appropriate reader device, including marketers, identity thieves, pickpockets, oppressive governments, and others. Retailers might add RFID readers to find out exactly who is browsing their aisles, gawking at their window displays from the sidewalk -- or passing by without looking. Pocket ID readers could be used by government agents to sweep up the identities of everyone at a political meeting, protest march, or Islamic prayer service. A network of automated RFID listening posts on the sidewalks and roads could even reveal the location of all people in the U.S. at all times."

House Subcommittee Approves SSN Privacy and Identity Theft Prevention Act

7/15. The House Ways and Means Committee's Subcommittee on Social Security approved HR 2971, the "Social Security Number Privacy and Identity Theft Prevention Act of 2003", by a voice vote.

The bill would restrict the sale and public display of Social Security numbers (SSNs), limit dissemination of SSNs by credit reporting agencies, make it more difficult for businesses to deny services if a customer refuses to provide his SSN, and establish civil and criminal penalties for violations.

Rep. Clay Shaw (R-FL) introduced the bill on July 25, 2003.

On June 15, the Subcommittee on Social Security held a hearing titled "Enhancing Social Security Number Privacy". See, prepared testimony of Howard Beales (Director of the Federal Trade Commission's Bureau of Consumer Protection), prepared testimony of Patrick O'Carroll (Acting Inspector General of the Social Security Administration), prepared testimony of Barbara Bovbjerg (General Accounting Office), and prepared testimony of Lawrence Maxwell (U.S. Postal Inspection Service).

See also, prepared testimony of Patricia Foss (identity theft victim), prepared testimony of Mark Ladd (Property Records Industry Association), prepared testimony of Chris Hoofnagle (Electronic Privacy Information Center), prepared testimony of Brian McGuinness (National Council of Investigation and Security Services), prepared testimony of Mike Buenger (Conference of State Court Administrators), prepared testimony of Fred Cate (University of Indiana -- Bloomington), and prepared testimony of Edmund Mierzwinski (U.S. Public Interest Research Group).

Appeals Court Affirms Conviction of Man Who Stole President Clinton's SSN

7/15. The U.S. Court of Appeals (11thCir) issued its opinion [21 pages in PDF] in US v. Harris, affirming the conviction by the District Court of an Alabama man named Charles Harris for the fraudulent use of a Social Security number with intent to deceive, in violation of 42 U.S.C. § 408(a)(7)(B).

Harris's driver's license was suspended. So, he made a fake driver's license, and other fake identification cards. His fraud was discovered when he was pulled over by a police officer for a traffic violation.

He used former President Bill Clinton's Social Security number in these fake identity documents, and asserted to police that it was his SSN. He did not, however, claim to be President Clinton.

This case is U.S.A. v. Charles Danny Harris, U.S. Court of Appeals for the 11th Circuit, App. Ct. No. 03-12804, an appeal from the U.S. District Court for the Northern District of Alabama, D.C. No. 97-00022 CR-B-S.

President Bush Signs Identity Theft Penalty Enhancement Act

7/15. President Bush signed HR 1731, the "Identity Theft Penalty Enhancement Act". This bill pertains to penalties for "aggravated identity theft", including identity theft that is associated with terrorism crimes and certain enumerated felonies.

Bush stated at a signing ceremony that "We're taking an important step today to combat the problem of identity theft, one of the fastest growing financial crimes in our nation. Last year alone, nearly 10 million Americans had their identities stolen by criminals who rob them and the nation's businesses of nearly $50 billion through fraudulent transactions. The bill I'm about to sign sends a clear message that a person who violates another's financial privacy will be punished." See, transcript.

This act adds a new section to the criminal code titled "Aggravated identity theft". It provides, in part, that "Whoever, during and in relation to any felony violation enumerated in subsection (c), knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person shall, in addition to the punishment provided for such felony, be sentenced to a term of imprisonment of 2 years." Subsection (c), in turn, enumerates numerous crimes, including bank fraud and wire fraud, and well as numerous crimes relating to immigration, passports, social security, and theft of public funds

This act further provides that "Whoever, during and in relation to any felony violation enumerated in section 2332b(g)(5)(B), knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person or a false identification document shall, in addition to the punishment provided for such felony, be sentenced to a term of imprisonment of 5 years." 18 U.S.C. § 2332b pertains to terrorism crimes.

FTC Settlement With AspenTech Requires Divestiture of Software Businesses

7/15. The Federal Trade Commission (FTC) released a redacted copy of its Decision and Order [33 pages in PDF] and Decision Containing Consent Order [4 pages in PDF] in its administrative proceeding titled "In the Matter of ASPEN TECHNOLOGY, INC., a corporation". The order requires Aspen Technology, Inc. to divest the overlapping assets that it obtained in its 2002 acquisition of Hyprotech, Ltd.

The FTC filed an administrative complaint [10 pages in PDF] on August 7, 2003, seeking to rescind the acquisition by Aspen Technology, Inc. of Hyprotech. The FTC alleged that the acquisition combined two competing software makers in violation of the FTC Act and the Clayton Act. See, story titled "FTC Files Administrative Complaint Seeking Rescission of Aspen Tech's Acquisition of Hyprotech" in TLJ Daily E-Mail Alert No. 714, August 8, 2003.

The 2003 complaint stated that "AspenTech is a developer and worldwide supplier of manufacturing, engineering, and supply chain simulation computer software, including non-linear process engineering simulation software used by the refining, oil & gas, petrochemical, specialty chemical, air separation, pharmaceutical, fine chemical and other process manufacturing industries and by engineering and construction companies to support those industries." The FTC further alleged that prior to the acquisition, "AspenTech and Hyprotech were direct and actual competitors" in various software markets, and that the acquisition created a worldwide dominant firm in these markets, and is anticompetitive.

This consent order settles this administrative action, subject to final Commission approval, following a 30 day public comment period that expires on August 13, 2004.

David McQuillin, P/CEO of AspenTech, stated in a release [2 pages in PDF] that "Under the agreement, we would be able to continue to sell and develop our comprehensive offering of process industry software products, including key products we acquired with the acquisition of Hyprotech. We believe this settlement is on terms favorable to AspenTech, its customers and its shareholders, and we are eager to move forward to maintain our commitments to customers to provide consistently excellent products, services, support and new innovations."

This AspenTech release further states that "Under the proposed settlement agreement, AspenTech would agree to sell its operator training services business and rights to the Hyprotech product line to an FTC-approved buyer. AspenTech would otherwise retain rights to continue selling and developing all of the engineering software products acquired in its acquisition of Hyprotech, such as the HYSYS family of products, but not including AXSYS. AspenTech would retain all of its other products with the exception of the OTISS product. Additionally, AspenTech has entered into a definitive agreement to sell its assets and business related to the AXSYS product line to Bentley Systems, which is expected to close within the next ten days."

See also, FTC release and document [5 pages in PDF] titled "Analysis of Proposed Settlement Agreement to Aid Public Comment", both released on July 15, 2004. This is FTC Docket No. 9310.

House Committee to Hold Hearing on EMP Attacks

7/15. The House Armed Services Committee (HASC) announced that it will hold a hearing on Thursday, July 22, 2004 on the threat of electromagnetic pulse (EMP) attacks.

The Congress established the Commission to Assess the Threat to the United States from Electromagnetic Pulse Attack in 2000. See, §§ 1401 through 1409 of HR 5408, the "Floyd D. Spence National Defense Authorization Act FY2001", in the 106th Congress. This bill was incorporated in, and passed as a part of, HR 4205, a broad defense authorization bill. It became Public Law 106-398. The sections establishing the Commission are now codified at 50 U.S.C. § 2301 notes.

EMP attacks interfere with and and damage computer, satellite, communications, and other electronic systems. Detonation of thermonuclear devices at high altitude creates wide area EMP damage.

William Graham, the Chairman of the Commission, will testify. See also, 1999 testimony of Graham before the HASC regarding EMP attacks.

Washington Tech Calendar
New items are highlighted in red.
Friday, July 16

10:30 AM. The Progress and Freedom Foundation (PFF) will host a conference titled "Should the Net's Physical Layer be Regulated?". Christopher Yoo (Vanderbilt Law School) will give the opening address. There will be a panel discussion by Joe Waz (Comcast), Rick Whitt (WorldCom), Adam Thierer (Cato Institute), and Randolph May (PFF). Kenneth Ferree (Chief of the FCC's Media Bureau) will be the luncheon address. See, notice and registration pages. For more information, contact Brooke Emmerick at 202 289-8928 or bemmerick@pff.org. Press contact: David Fish at 202 775-2644 or dfish@brodeur.com. Location: Washington Mandarin Oriental hotel, 1330 Maryland Ave., SW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Cable Practice Committee and Young Lawyers Committee will host a brown bag lunch. The topic will be "The Basics of A La Carte Cable Pricing". For more information, contact Natalie Roisman at natalie.roisman@fcc.gov, or Jason Freidrich at jason.friedrich@dbr.com. Location: Willkie Farr & Gallagher, 1875 K Street, NW, 2d Floor.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rule Making (FNPRM) and Notice of Inquiry (NOI) regarding digital audio broadcasting (DAB). This item is FCC 04-99 in MB Docket No. 99-325. See, story titled "FCC Announces FNPRM and NOI Regarding Digital Audio Broadcasting" in TLJ Daily E-Mail Alert No. 878, April 16, 2004, and notice in the Federal Register, May 17, 2004, Vol. 69, No. 95, at Pages 27874 - 27885.

Monday, July 19

10:00 AM. The U.S. District Court (DC) will hold a status conference in U.S. v. Microsoft, and New York v. Microsoft, Case Nos. 1:1998-cv-01232 and 3, Judge Colleen Kotelly presiding. Location: Courtroom 11, Prettyman Courthouse, 333 Constitution Ave.

Tuesday, July 20

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. See, notice. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.

9:30 AM. The Senate Commerce Committee will hold a business meeting. Press contact: Rebecca Fisher at 202 224-2670. Location: Room 253, Russell Building.

2:30 PM. The Senate Banking Committee will hold an oversight hearing to examine the Semi-Annual Monetary Policy Report of the Federal Reserve Bank. FRB Chairman Alan Greenspan will testify. See notice. Location: Room 216, Hart Building.

Wednesday, July 21

9:00 AM. Day one of a two day meeting of the Department of Commerce's (DOC) Bureau of Industry and Standards (BXA/BIS) Information Systems Technical Advisory Committee (ISTAC). Some of the meetings will be closed to the public. The agenda includes a summary of the Wassenaar Arrangement inter-sessional meeting on semiconductor manufacturing equipment, and a presentation on computational capability of graphics processors. See, notice in the Federal Register, July 6, 2004, Vol. 69, No. 128, at Page 40601. Location: DOC, Room 3884, 14th Street between Pennsylvania Ave. and Constitution Ave., NW.

10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "The Digital Television Transition: What We Can Learn From Berlin?" Press contacts: Jon Tripp (Barton) at 202-225-5735 ant Sean Bonyun (Upton) at 202-225-3761. Location: Room 2123, Rayburn Building.

10:00 AM. The Senate Judiciary Committee will hold a hearing on the nomination of Thomas Griffith to be a Judge of the U.S. Court of Appeals for the District of Columbia. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.

12:00 NOON. The Americans for a Secure Internet (ASI) will host a panel discussion titled "Phishing: The Next Challenge for E-commerce". The speakers will be Howard Beales (Director of the FTC's Bureau of Consumer Protection), Dan Caprio (Chief Privacy Officer, Department of Commerce), Steve DelBianco (Executive Director, NetChoice), Ben Golub (VeriSign), and Jonathan Zuck (President of the Association for Competitive Technology). See, notice and registration page. For more information, contact Mark Blafkin at 202 331-2130 x104. Location: Room HC-7, Capitol Building.

12:00 NOON. The Heritage Foundation will host a book presentation. James Rogan, a former member of the House Judiciary Committee and a former director of the U.S. Patent and Trademark Office (USPTO), will talk about his book titled Rough Edges: My Unlikely Road from Welfare to Washington [Amazon]. See, notice. Location: 214 Massachusetts Ave., NE.

2:00 PM. The House Armed Services Committee's Tactical Air Land Forces Subcommittee will hold a hearing on "Small Business Innovation and Technology". Location: Room 2118, Rayburn Building. This hearing was previously scheduled for July 15.

Thursday, July 22

9:00 AM. The House Armed Services Committee will hold a hearing on the report of the Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack. William Graham, the Chairman of the Commission, will testify. Location: Room 2118, Rayburn Building.

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". The witnesses will be Richard Stana (GAO), Robert Bonner (Bureau of Customs & Border Protection), Karen Tandy (Drug Enforcement Administration), John Potter (Postmaster General, USPS), John Taylor (Food and Drug Administration), John Scheibel (Yahoo), Sheryl Sandberg (Google), Joshua Peirez (Master Card), Steve Ruwe (Visa), Robert Bryden (Federal Express), and Daniel Silva (United Parcel Service). See, notice. Location: Room 342, Dirksen Building.

9:00 AM. Day two of a two day meeting of the Department of Commerce's (DOC) Bureau of Industry and Standards (BXA/BIS) Information Systems Technical Advisory Committee (ISTAC). Some of the meetings will be closed to the public. The agenda includes a summary of the Wassenaar Arrangement inter-sessional meeting on semiconductor manufacturing equipment, and a presentation on computational capability of graphics processors. See, notice in the Federal Register, July 6, 2004, Vol. 69, No. 128, at Page 40601. Location: DOC, Room 3884, 14th Street between Pennsylvania Ave. and Constitution Ave., NW.

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. See, notice. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.

9:30 AM. The Senate Commerce Committee will hold a hearing on media ownership. The hearing will be webcast. Press contact: Rebecca Fisher at 202 224-2670. Location: Room 253, Russell Building.

12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a luncheon. The featured speaker will be Wayne Brunetti, Ch/CEO of Xcel Energy. His address may include many topics, including broadband internet access over power lines (BPL). The FCC issued a notice of proposed rulemaking (NPRM) on BPL on February 12, 2004. See, story titled "FCC Adopts Broadband Over Powerline NPRM" in TLJ Daily E-Mail Alert No. 836, February 13, 2004. Xcel has filed comments. See, April 5 comment [15 pages in PDF] on BPL, and July 14 comment [16 pages in PDF] in IP enabled services proceeding. This NPRM is FCC 04-29 in ET Docket Nos. 03-104 and 04-37. See, notice and registration page. Press contact: David Fish at 202 775-2644. Location: Rotunda Room, Ronald Reagan Building & International Trade Center, 1300 Pennsylvania Ave., NW.

1:00 PM. The House Ways and Means Committee's Subcommittee on Health will hold a hearing titled "Electronic Prescribing". See, notice. Location: Room 1100, Longworth Building.

EXTENDED TO SEPTEMBER 10. Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its public notice (DA 04-1690) requesting public comments on constitutionally permissible ways for the FCC to identify and eliminate market entry barriers for small telecommunications businesses and to further opportunities in the allocation of spectrum-based services for small businesses and businesses owned by women and minorities. See, notice in the Federal Register, June 22, 2004, Vol. 69, No. 119, at Pages 34672 - 34673. See also, notice of extension [PDF].

Friday, July 23

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding a national one call notification system. The FCC adopted this NPRM on May 13, 2004, and released the text [34 pages in PDF] on May 14, 2004. See, story titled "FCC Adopts NPRM Regarding One Call Notification System" in TLJ Daily E-Mail Alert No. 899, May 17, 2004. This NPRM is FCC 04-111 in CC Docket No. 92-105. See, notice in the Federal Register, June 8, 2004, Vol. 69, No. 110, at Pages 31930 - 31939.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry (NOI) [30 pages in PDF] regarding its annual report to the Congress on the status of competition in the market for the delivery of video programming. See also, story titled "FCC Adopts NOI For Annual Report to Congress on Video Programming" in TLJ Daily E-Mail Alert No. 916, June 11, 2004. This NOI is FCC 04-136 in MB Docket No. 04-227. See also, notice in the Federal Register, July 1, 2004, Vol. 69, No. 126, at Pages 39930 - 39933.

More News

7/15. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property held an oversight hearing titled "Internet Streaming of Radio Broadcast: Balancing the Interests of Sound Recording Copyright Owners With Those of Broadcasters". See, prepared testimony [35 pages in PDF] of David Carson (General Counsel of the Copyright Office), prepared testimony of Jonathan Potter (Executive Director of the Digital Media Association), prepared testimony [PDF] of Steven Marks (General Counsel of the Recording Industry Association of America), and prepared testimony [PDF] of Dan Halyburton (on behalf of the National Association of Broadcasters).

7/14. The Center for Democracy and Technology (CDT) released a paper [20 pages in PDF] titled "ICANN and Internet Governance: Getting Back to Basics".

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