Tech Law Journal Daily E-Mail Alert
October 10, 2005, 9:00 AM ET, Alert No. 1,230.
Home Page | Calendar | Subscribe | Back Issues | Reference
Senate Banking Committee Holds Hearing on CFIUS

10/6. The Senate Banking Committee held a hearing titled "A Review of the CFIUS Process for Implementing the Exon-Florio Amendment". The secretive Committee on Foreign Investments in the U.S. (CFIUS) is the instrument by which the federal government blocks foreign investment in, and acquisition of, certain technology companies.

Sen. Richard Shelby (R-AL), the Chairman of the Committee, wrote in his opening statement that "improvements are needed". He said that the Government Accountability Office's (GAO) testimony "suggests that implementation of the Exon-Florio amendment may not protect national security". He added that "The Treasury Department may believe that the process is sufficiently transparent as it currently exists. This is the United States Senate committee with jurisdiction over the process in question, and we most certainly do not agree."

The GAO's Katherine Schinasi wrote in her prepared testimony [PDF] that "in light of differing views among Committee members about the scope of Exon-Florio -- specifically, what defines a threat to national security, we have suggested that Congress should consider amending Exon-Florio to more clearly emphasize the factors that should be considered in determining potential harm to national security."

She noted, for example, that some CFIUS member agencies, including the Department of the Treasury, "apply a more traditional and narrow definition of what constitutes a threat to national security -- that is, (1) the U.S. company possesses export-controlled technologies or items; (2) the company has classified contracts and critical technologies; or (3) there is specific derogatory intelligence on the foreign company." In contrast, other CFIUS members, including the Department of Defense and the Department of Justice, "argue that acquisitions should be analyzed in broader terms. According to officials from these departments, vulnerabilities can result from foreign control of critical infrastructure, such as control of or access to information traveling on networks."

She also wrote that "to provide more transparency and facilitate congressional oversight, we are suggesting that the Congress may want to revisit the criterion for reporting circumstances surrounding cases to the Congress. Currently, the criterion is a presidential decision. However, there have only been two such decisions since 1997 and thus only two reports to Congress".

Cogent and Level 3 Have Peering Dispute

10/7. Cogent Communications issued a release regarding its peering dispute with Level 3 Communications. Cogent states that Level 3 turned off its internet backbone peering connection with Cogent.

Cogent CEO Dave Schaeffer stated in the release that "We feel this situation can easily be resolved without more impact to the customers of either company. The seriousness of the situation has been made abundantly clear, and for the sake of Internet users, Level 3 should turn the connection back on and both parties should sit down at the table to discuss the situation."

He added that "Cogent is willing to offer Level 3 free Internet service across our network to help alleviate their financial situation while also discussing appropriate traffic ratios. Cogent feels allegations of inappropriate traffic ratios have been incorrectly articulated by Level 3. In fact, it is Level 3 who requested that Cogent send more traffic across their network since Level 3 charges by the bit, and increased traffic flow helps them financially."

He concluded that "Cogent's connection to Level 3 remains open, on and ready to accept their traffic. There is no situation that prevents them from turning on the connection other than a mindset that is willing to sacrifice customer connectivity at this specific point in time. Cogent feels that Internet users deserve better treatment while this situation is ironed out. That is why Cogent is appealing directly to Level 3 single-homed customers and offering them one year of free, dedicated Internet access to provide them with access to the full Internet, not just the Level 3 portion of it. This offer bypasses the problem, helps the customer attain full access to the Internet and eliminates the roadblock to Cogent's portion of the Internet. Cogent has already had significant success with this offer and will continue to make it available as long as the peering connection remains turned off by Level 3."

There are no statutory requirements affecting the negotiation of peering or interconnection agreements among internet backbone providers. In contrast, telecommunications carriers have long been required to interconnect with other carriers, and regulators have authority to mandate interconnection, and imposed terms, included prices.

There are legislative proposals to impose an interconnection requirement upon internet backbone providers. For example, on September 15, 2005, the House Commerce Committee's (HCC) released the discussion draft [77 pages in PDF] of a bill to regulate broadband internet transmission services (BITS), voice over internet protocol (VOIP) services, and broadband video services (BVS). It requires BITS providers to interconnect with both other BITS providers and telecommunications carriers. See also, story titled "House Commerce Committee Releases Draft of Bill to Regulate Internet Protocol Services" in TLJ Daily E-Mail Alert No. 1,216, September 19, 2005.

Even a legislative proposal [46 pages in PDF] of the Progress and Freedom Foundation (PFF), a group that usually advocates free markets, would create a government imposed interconnection requirement. Its proposed legislative language provides that "Unfair methods of competition in or affecting electronic communications networks and electronic communications services, and unfair or deceptive practices in or affecting electronic communications networks and electronic communications services, are hereby declared unlawful."

It then provides that "unfair methods of competition means ... with respect to interconnection, practices that pose a substantial and non-transitory risk to consumer welfare by materially and substantially impeding the interconnection of public communications facilities and services in circumstances in which the Commission determines that marketplace competition is not sufficient adequately to protect consumer welfare, providing that in making any such determination the Commission must consider whether requiring interconnection will affect adversely investment in facilities and innovation in services."

See also, story titled "PFF Project Recommends Making FCC More Like the FTC and Antitrust Division" in TLJ Daily E-Mail Alert No. 1,157, June 20, 2005.

4th Circuit Rules Dirty Dancing is not Expressive Conduct

10/7. The U.S. Court of Appeals (4thCir) issued its opinion [26 pages in PDF] in Willis v. Marshall, a First Amendment and Equal Protection case involving government regulation of dirty dancing and women's wardrobes. The courts hear many dancing cases. However, while most dancing cases involve municipal efforts to regulate commercial establishments that stage dancers for prurient purposes, this case involves a public forum for dancing by members of the public. This is subject to a different legal analysis.

The small Town of Marshall, in far western North Carolina, leased a former railroad depot for use as a community center. It established Friday nights for music performances and dancing. The public was invited. One Rebecca Willis was a regular. The Town was shocked. It said she danced in a sexually provocative and indecent manner. And, she bent over while wearing very short skirts. But, she said that she was merely an enthusiastic and flamboyant dancer, who gyrated like Elvis Presley. And, whatever proprietary information she disclosed, she wore underwear.

Local newspaper accounts, but not the recitation of facts in the Court's opinion, suggest another reason why the Town thought Willis's lack of cotton fabric so threatened the Town's moral fabric -- she was 59 years old. The Board of Aldermen banished her, but not her dancing partners, from further Town dances.

Perhaps in Willis's view, the Marshall's Board of Aldermen functioned in a capacity not unlike that of the Harper Valley PTA, or similarly situated federal regulators.

Stripped of her associational and expressive rights, she filed a complaint in U.S. District Court (WDNC) under 42 U.S.C. 1983, based upon state violations of her rights under the First Amendment, the Equal Protection Clause, substantive due process, and other constitutional provisions. The District Court granted summary judgment to the Town, and she appealed.

The unusual posture of Willis's case, a challenge to municipal regulation of indecent dancing at a municipal forum established for the purpose of music and dancing, creates analogies to government regulation of indecent broadcast content.

There are many conceptual similarities between the Town's regulation of dancers, and government regulation of broadcast content. Radiofrequency spectrum is owned by the government. Some spectrum is licensed, by the Federal Communications Commission (FCC), for among other purposes, broadcasting entertainment programming. Moreover, the FCC regulates the content of programming by prohibiting obscenity, indecency and profanity.

Also on October 7, the FCC issued a release [PDF] announcing the publication of a new web site section. It is titled "Regulation of Obscenity, Indecency and Profanity", or "ROIP", which perhaps, rhymes with VOIP.

Similarly, the Town of Marshall owns or leases property for public purposes. It allows certain property to be used at certain times for music and dancing. It too regulates this music and dancing to prohibit obscenity, indecency and profanity.

Also, the Court of Appeals noted that the Town's Friday night events are "are attended by community members of all ages", and "Community members were concerned about their children being exposed to Willis's dancing". Similarly, the Supreme Court noted that broadcast programming is "uniquely accessible to children" in FCC v. Pacifica Foundation, 438 U.S. 726 (1978), which is also known at George Carlin's seven filthy words case.

Some of the cases relied upon by the Court of Appeals are cases involving FCC regulations, including FCC v. Beach Communications, Inc., 508 U.S. 307 (1993) and Sable Communications of Cal., Inc. v. FCC, 492 U.S. 115 (1989).

On the other hand, this case differs from broadcast cases in one key aspect. Willis was not performing for a broadcast audience. For example, she did not dance in a Superbowl half time performance.

After 26 pages of legal gyrations, the Court took the position that Marshall has not exposed itself to a First Amendment claim, for the reason that her dirty dancing is not expressive conduct. It first reasoned that "most forms of dance, whether ballet or striptease, when performed for the benefit of an audience, are considered expressive conduct protected by the First Amendment. ... Willis, however, was not a performer in any meaningful sense -- she was simply dancing for her own enjoyment". It held that her performance for the other citizens at the dance was not sufficient to make her movements expressive.

Second, the Court reasoned that the music performances were protected speech, and that Willis had a first amendment right to listen, but this right did not extend to her dancing to the music. Thus, it affirmed the summary judgment for the Town on the First Amendment claim.

And since the Court found no protected expressive conduct in her dirty dancing, it also held that there is no void for vagueness or overbreadth claim, or violation of a First Amendment right of association. Thus, even though the Town had no written rules, there is no vagueness problem, because there is no underlying protected right.

The Court also rejected Willis's right to travel, substantive due process, and procedural due process claims.

Finally, the Court addressed the Equal Protection claim. Since the Court found no protected First Amendment or other constitutional rights involved, it applied the lowest standard of review -- rational basis. This generally requires only that the classification be rationally related to a legitimate governmental interest. It then concluded that "a prohibition against lewd or suggestive dancing at the Depot is unquestionably valid. The Town opened up the Depot for the Friday night events to provide a venue for wholesome, family entertainment. Protecting children from inappropriate sexual displays at the Depot is, at the very least, a legitimate governmental interest. ... A ban on lewd or suggestive dancing is rationally related to that interest. Accordingly, to the extent that Willis challenges the Town's lewd dancing policy, that challenge fails."

However, the Equal Protection analysis did not end here. Willis had dancing partners, with whom she was "on the floor, simulating sexual intercourse", according to the Town. They were not banished. Hence, she may have been treated differently from others with whom she was "similarly situated".

The District Court decided the case on summary judgment after limited discovery. While there was evidence in the record that people had complained about Willis's conduct, there was no evidence in the record as to whether there were complaints against others. Hence, the Court concluded the summary judgment on this issue was premature.

At bottom, it vacated and remanded on the Equal Protection claim. Yet, in the future, the Town might prevail on an Equal Protection claim by banishing all similarly situated dancers.

Under the Court's analysis, the outcome might have been vastly different if Willis's bending over on the dance floor had been broadcast over the airwaves. In this case, Willis's gyrating would arguably have been "performed for the benefit of an audience", and thus been accorded First Amendment protection. And, this protection would have extended to the broadcaster, and to her. Moreover, this might also have elevated the Equal Protection analysis from rational basis to strict scrutiny, and breathed life into the vagueness and overbreadth claims.

The Court's analysis is essentially that whether purported expressive conduct is actually expressive for the purposes of the First Amendment is not determined on the basis of the content of the expression, or the mental state of the person making the expression. Rather, it is dependent upon the nature of the audience. Dancing in front of the good citizens of Marshall is not expressive conduct. Dancing on a stage in a strip joint, or on television, is expressive conduct.

The Court did not address what would be the consequence if Willis, or anyone else, brought a video camera and webcast or vodcast her gyrations.

Washington Tech Calendar
New items are highlighted in red.
Monday, October 10

Columbus Day.

The House will not meet the week of October 10-14. See, Republican Whip Notice.

The Senate will not meet the week of October 10-14. It will next meet on October 17 at 2:00 PM.

The Federal Communications Commission (FCC) and other federal offices will be closed for Columbus Day. See, Office of Personnel Management's (OPM) list of federal holidays.

Deadline to submit comments to the Internet Corporation for Assigned Names and Numbers (ICANN) regarding its proposed amendment to the .NET Registry Agreement. See, notice.

Tuesday, October 11

1:30 - 4:30 PM. The Department of Homeland Security's (DHS) National Infrastructure Advisory Council (NIAC) will meet. The agenda includes presentations by John Chambers (Ch/CEO of Cisco Systems) and Thomas Noonan (P/CEO of Internet Security Systems). See, notice in the Federal Register, September 2, 2005, Vol. 70, No. 170, at Pages 52420 - 52421. Location: National Press Club, 529 14th St. NW, 13th Floor.

Day one of a two day conference hosted by the National Institute of Standards and Technology (NIST) and the Open Web Application Security Project regarding the OWASP. See, notice and conference web site. Location: NIST, Green Auditorium, 100 Bureau Drive, Gaithersburg, MD.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding proposed changes to Federal Information Processing Standard (FIPS) Publication 201, titled "Standard for Personal Identity Verification of Federal Employees and Contractors. See, notice in the Federal Register, September 8, 2005, Vol. 70, No. 173, at Pages 53346 - 53347.

Wednesday, October 12

Day two of a two day conference hosted by the National Institute of Standards and Technology (NIST) and the Open Web Application Security Project regarding the OWASP. See, notice and conference web site. Location: NIST, Green Auditorium, 100 Bureau Drive, Gaithersburg, MD.

Thursday, October 13

Yom Kippur.

11:00 AM - 12:00 PM. The President's National Security Telecommunications Advisory Committee (NSTAC) will hold a meeting by teleconference. The first part of the meeting, which will be open to the public, will be a discussion of issues related to Hurricane Katrina. The second part of the meeting, which will be closed to the public, will be a discussion of the shutdown of cellular services in the tunnels into and out of Manhattan following the terrorist attacks in London on July 7, 2005. To participate, contact Elizabeth Hart at 703 289-5948 or hart_elizabeth at bah dot com by 5:00 PM on Tuesday, October 11, 2005. See, notice in the Federal Register, September 28, 2005, Vol. 70, No. 187, at Page 56731.

12:00 NOON - 2:00 PM. The DC Bar Association will host a program titled "New SEC Enforcement Director Speaks: Stay the Course or New Directions in SEC Enforcement?". The speaker will be Linda Thomsen (Director of the SEC's Enforcement Division). Larry Ellsworth (Jenner & Block) will moderate. The price to attend ranges from $5-$10. For more information, call 202 626-3463. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

2:00 - 4:00 PM. The Department of States' (DOS) International Telecommunication Advisory Committee (ITAC) will meet to prepare for ITU-T Advisory Group. See, notice in the Federal Register, July 13, 2005, Vol. 70, No. 133, at Page 40414. Location: undisclosed. The DOS states that "Access to these meetings may be arranged by contacting Julian Minard at minardje at state dot gov.

Deadline to submit comments to the Interim Chief Copyright Royalty Judge, on behalf of the Copyright Royalty Board, on the existence of controversies to the distribution of the 2003 cable royalty fund. See, notice in the Federal Register, September 13, 2005, Vol. 70, No. 176, at Pages 53973 - 53974.

Friday, October 14

5:00 PM. Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding its out of cycle reviews of Ukraine and Saudi Arabia. Section 182 of the Trade Act of 1974 requires the USTR to identify countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. See, notice in the Federal Register, September 8, 2005, Vol. 70, No. 173, at Pages 53410 - 53412. See also, story titled "USTR Lifts Trade Sanctions on Ukraine and Announces Special 301 Out of Cycle Review" in TLJ Daily E-Mail Alert No. 1,205, September 1, 2005. See also, notice in the Federal Register, September 14, 2005, Vol. 70, No. 177, at Pages 54436 - 54437.

Monday, October 17

12:00 NOON. Andrew Chin ( University of North Carolina Law School) will deliver a paper titled "Artful Prior Art and the Quality of DNA Patents". This event is a part of the George Washington University Law School's (GWULS) intellectual property workshop series. RSVP by Tuesday, October 11, to Rosalie Kouassi at rkouassi at law dot gwu dot edu. Location: GWULS, Faculty Conference Center, 5th Floor Burns, 716 20th St., NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch. The topic will be "Meet the Media Bureau Chief -- Donna Gregg". No RSVP is requested. For more information, contact Ann Bobeck at abobeck at nab dot org. Location: National Association of Broadcasters (NAB), 1771 N Street, NW.

2:00 PM. The Cato Institute will host a panel discussion titled "Restoring Property Rights After Kelo v. New London". The speakers will be Sen. John Cornyn (R-TX), Roger Pilon (Cato), and John Echeverria (Georgetown Environmental Law and Policy Institute). See, notice and registration page. Cato will webcast the event. Lunch will be served after the program. Location: Cato, 1000 Massachusetts Ave., NW.

Bush Nominates Bohigian to Head Market Access and Compliance

10/7. President Bush nominated David Steele Bohigian to be Assistant Secretary of Commerce for Market Access and Compliance. If confirmed by the Senate, he will replace William Lash, who has already resigned. See, White House release and release.

The Department of Commerce's (DOC) Market Access and Compliance (MAC) office is one of many federal government offices that is involved in seeking market access in foreign countries for U.S. firms and individuals, and in pursuing compliance by foreign nations with their trade agreements.

He is currently Assistant to the Secretary and Director of Policy and Strategic Planning at the DOC. In addition, a report [PDF] of the White House Office of Faith-Based and Community Initiatives states that "David Bohigian was named Director of the Center for Faith-Based and Community Initiatives at the Department of Commerce on July 16, 2004."

Before going to work in the Bush administration, he worked at Idealab, a company that starts and operates technology companies. Before that he worked at VenCatalyst, a company that he founded, and which was acquired by Idealab. Before that, he worked for Jefferson Partners. He also previously worked for former House Speaker Newt Gingrich (R-GA). He is an attorney.

Federal Election Commission (FEC) records show that a David S. Bohigian of Washington DC 20007 contributed $250 to Bush Cheney (Primary) Inc. on March 24, 2004. FEC records also show that on March 24, 2004 a Mrs. Catherine C. Bohigian of Washington DC 20007 contributed $250 to Bush Cheney (Primary) Inc. A Catherine Crutcher Bohigian is senior legal advisor to Federal Communications Commission (FCC) Chairman Kevin Martin. She works on media issues. Both Catherine Bohigian and Kevin Martin previously worked in the Washington DC office of the law firm of Wiley Rein & Fielding.

The Department of Commerce did not immediately return phone calls from TLJ regarding the nomination.

People and Appointments

10/7. President Bush announced the withdrawal of the nomination of Timothy Flanigan to be Deputy Attorney General (DAG). Bush announced his intent to nominate Flanigan on May 24, 2005. See, "People and Appointments" in TLJ Dailly E-Mail Alert No. 1,142, May 25, 2005. The Senate Judiciary Committee held a hearing on his nomination in July. The previous was James Comey. See, White House release. Bush has also had difficulty getting Alice Fisher confirmed as Assistant Attorney General in charge of the Criminal Division. Bush gave her a recess appointment during the August Congressional recess. President Bush first nominated Fisher back on March 29, 2005. See also, stories titled "Bush to Nominate Alice Fisher to Head DOJ's Criminal Division" TLJ Daily E-Mail Alert No. 1,107, April 1, 2005; and "Recess Appointments in the August Break" in TLJ Daily E-Mail Alert No. 1,192, August 10, 2005.

10/7. President Bush announced the withdrawal of the nomination of Philip Morrison to be an Assistant Secretary of the Treasury. See, White House release. Bush nominated Morrison back on May 26, 2005. This is the tax policy position, last held by Pam Olson. It has long sat vacant. Although, Greg Jenner was an acting assistant secretary for tax policy. On July 22, 2004, Bush announced his intent to nominate Jenner to be the Assistant Secretary. See, White House release. This position is significant because the person who holds this position, at least nominally, is responsible for formulating policy with respect to taxation that affects technology and innovation. However, the Bush administration has tended to formulate tax policy in the Executive Office of the President. This may be one reason why President Bush has had difficulties obtaining nominees, and getting them confirmed, by the Senate.

10/7. President Bush nominated Susan Schwab to be Deputy United States Trade Representative. She is the P/CEO of the University of Maryland Foundation, Inc. and USM Vice Chancellor for Advancement. She has also been Dean of the University of Maryland School of Public Policy. Earlier in her career, she worked as a trade negotiator at the Department of Commerce, and for former Sen. John Danforth (R-MO). She is the author of the 1994 book titled Trade Offs: Negotiating the Omnibus Trade and Competitiveness Act [Amazon]. She has also worked for Motorola. See, White House release and release, and USTR release.

10/7. President Bush nominated Eric Vitaliano to be a Judge of the U.S. District Court for the Eastern District of New York. Pursuant to bipartisan agreement that covers judicial appointments in the state of New York, this is a pick by Sen. Charles Schumer (D-NY). See, White House release. See also, Sen. Schumer's release of May 10, 2005.

10/7. President Bush nominated Antonio Fratto to be Assistant Secretary of the Treasury for Public Affairs. He is currently the acting Assistant Secretary of the Treasury for Public Affairs. See, White House release and release.

More News

10/7. Secretary of the Treasury John Snow will visit Japan on October 10-11, 2005, and the People's Republic of China of October 12-18, 2005. See, Treasury release.

10/6. Anthony Wayne, Assistant Secretary for Economic and Business Affairs, gave a speech in Kiev, Ukraine, in which he discussed Ukraine's accession to the World Trade Organization (WTO) and enforcement of intellectual property rights.

About Tech Law Journal

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

Contact: 202-364-8882.
P.O. Box 4851, Washington DC, 20008.

Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2005 David Carney, dba Tech Law Journal. All rights reserved.