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December 16, 2005, 8:00 AM ET, Alert No. 1,274.
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House Commerce Committee Postpones Markup of DATA Bill

12/15. The House Commerce Committee (HCC) met to mark up three bills, including HR 4127, the "Data Accountability and Trust Act (DATA)". It postponed markup of HR 4127.

Rep. Joe Barton (R-TX), the Chairman of the HCC, stated that "we had originally planned to markup H.R. 4127 but, Mr. Dingell and I agreed to put off consideration in order to finalize agreements that have been reached in negotiations with the majority and minority. It is the intention of the chair to consider the DATA protection privacy bill as soon as possible. That could happen as early as tomorrow if we're in session, but it likely won’t happen until sometime in 2006." See, transcript.

Rep. John Dingell (D-MI), the ranking Democrat on the HCC, stated that "I want to commend you, Mr. Chairman, along with Subcommittee Chairman Stearns and Ranking Member Schakowsky, for your hard work since the Subcommittee markup to resolve the many issues that were highlighted at that markup."

Rep. John DingellRep. Dingell (at right) explained that "The remaining major issue is a most important one, and that is the issue of enforcement. We are all in agreement that we need tough enforcement that will deter violations of the act. This bill is designed to provide important rights to consumers when their confidential information is compromised. But rights are meaningless without enforcement."

Rep. Dingell concluded that "I am encouraged that the staff on both sides of the aisle are engaged in discussions that can lead to a resolution on this matter, so that we can proceed to report this bill early next year. I want to personally thank you, Mr. Chairman, for postponing this matter to give us time to reach that resolution." See, transcript.

Senate Commerce Committee Approves Bill to Expand FTC Powers to Pursue Online Fraud

12/15. The Senate Commerce Committee (SCC) approved S 1608, the "Undertaking Spam, Spyware, and Fraud Enforcement With Enforcers Beyond Borders Act of of 2005 (U.S. SAFE WEB Act). The SCC approved the bill after little discussion, with no amendments, and by unanimous consent.

Sen. Gordon SmithSen. Gordon Smith (R-OR) (at right) introduced this bill on July 29, 2005.

The purpose of this bill is to increase Federal Trade Commission (FTC) authority to pursue fraud, and especially online fraud, that crosses national boundaries. It would also assist foreign governments in pursuing fraud that involves activity in the U.S.

Section 5 of the Federal Trade Commission Act (FTCA), which is codified at 15 U.S.C. § 45, is the provision that the FTC usually relies upon in actions against perpetrators of online fraud. It currently provides, in part, that "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful"

The bill would expand the definition of "unfair or deceptive acts or practices" to include "foreign commerce that -- (i) cause or are likely to cause reasonably foreseeable injury within the United States; or (ii) involve material conduct occurring within the United States."

The bill provides that the FTC may obtain ex parte orders from a court for delayed notice of, and prohibition of disclosure of, compulsory process, such as subpoenas. The SCC stated in a release summarizing the bill that the purpose of this is to "prevent notifying subjects of investigations if they may be likely to destroy evidence or move assets offshore".

Perhaps it is noteworthy that the members of the SCC are not concerned with the consequences of increasing the FTC's ability to provide delayed notice, and obtain gag orders, but some Senators and Representatives are arguing emphatically about the PATRIOT Act's, and HR 3199's, provisions regarding Department of Justice (DOJ) authority to provide delayed notice, and obtain gag orders.

The bill also provides a broad immunity, not only from suits arising under law, but also from suits for breach of contract, for disclosure to and cooperation with the FTC. First, it provides that "the recipient of compulsory process issued by the Commission under this Act shall not be liable under" any federal, state, or local constitution, statute or regulation, "or under any contract or other legally enforceable agreement, for failure to provide notice to any person that such process has been issued or that the recipient has provided information in response to such process".

The bill further provides that any "Internet service provider or provider of telephone services", "financial institution", "operator of a credit card system", "consumer reporting agency", or other enumerated entity, "that voluntarily provides material to the Commission that such entity reasonably believes is relevant to (A) a possible unfair or deceptive act or practice, as defined in section 5(a) of this Act; or (B) assets subject to recovery by the Commission, including assets located in foreign jurisdictions; shall not be liable to any person" for violation of any federal, state, or local law, "for such provision of material or for any failure to provide notice of such provision of material or of intention to so provide material."

The SCC release states that these grants of immunity "protect entities from liability for voluntary disclosures to the FTC relating to suspected fraud and deception, increasing the likelihood of such disclosures from third parties".

The bill also provides for venue of certain actions in the District of Columbia. It provides that "All judicial proceedings initiated by the Commission under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.), chapter 121 of title 18, United States Code, or this section may be brought in the United States District Court for the District of Columbia or any other appropriate United States District Court. All ex parte applications by the Commission under this section related to a single investigation may be brought in a single proceeding."

The bill's recitation of findings states that sometimes "wrongdoers, victims, other witnesses, documents, money and third parties involved in the transaction are widely dispersed in many different jurisdictions".

The SCC release states that the purpose of this is to "avoid challenges to FTC jurisdiction issues".

This provision also has the effect of giving the FTC authority to bring, and maintain, actions in a forum that is inconvenient to affected parties.

The also provides that whenever the FTC "obtains evidence that any person, partnership, or corporation, either domestic or foreign, has engaged in conduct that may constitute a violation of Federal criminal law" it may "transmit such evidence" to the DOJ, which may then "institute criminal proceedings".

The bill also provides for increased cooperation with, and assistance to, foreign law enforcement agencies.

This bill does not addresses antitrust investigations or proceedings.

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

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

The Senate will meet at 9:30 AM for morning hour. It will then resume consideration of the conference report on HR 3199, the PATRIOT Act extension bill. See, full text of the conference report [219 pages in PDF].

9:00 - 11:00 AM. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council (NRIC) will meet. The agenda includes discussion of "E911 issues, final recommendations for next generation E911 architectures and transition issues, new best practices for improving the reliability of E911 networks and services, target network architectures for communications with emergency services personnel, and best practices for network security". See, FCC notice [PDF]. Location: FCC, Commission Meeting Room, 445 12th Street, SW.

Saturday, December 17

The House may meet for legislative business. See, Republican Whip Notice.

Monday, December 19

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking regarding its rules affecting Wireless Radio Services. This item is FCC 05-144 in WT Docket Nos. 03-264. The FCC adopted this item on July 22, 2005. It released the text [67 pages in PDF] on August 9, 2005. See, notice in the Federal Register, October 19, 2005, Vol. 70, No. 201, at Pages 60770 - 60781.

Deadline to submit comments to the Securities and Exchange Commission (SEC) regarding improving the draft RFP [154 pages in PDF] for remaking the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) Platform. See also, SEC release, draft RFP cover letter [PDF], and story titled "SEC Seeks Contractor to Remake EDGAR" in TLJ Daily E-Mail Alert No. 1,259, November 23, 2005.

Friday, December 23

Informal deadline to submit comments to Rep. Lee Terry (R-NE) and/or Rep. Rick Boucher (D-VA) regarding their discussion draft [31 pages in PDF] of a bill to be titled the "Universal Service Reform Act of 2005". See, story titled "Reps. Terry and Boucher Propose New Internet Taxes" in TLJ Daily E-Mail Alert No. 1,257, November 21, 2005.

Sunday, December 25


Monday, December 26


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

There will be no issue of the TLJ Daily E-Mail Alert.

People and Appointments

12/15. President Bush nominated Stephen Larson to be a Judge of the U.S. District Court for the Central District of California. See, White House release. Larson is currently a Magistrate Judge for the Central District, at Riverside.

12/15. Qwest Communications announced the appointments to its Board of Directors of Caroline Matthews (President of Blue Cross and Blue Shield of Georgia), and David Hoover (Ch/P/CEO of Ball Corporation). See, Qwest release.

12/12. David Drinkwater was named Chief Legal Officer of Nortel Networks, effective December 19, 2005. See, Nortel release.

More News

12/15. Microsoft announced the filing a ten civil complaints in U.S. District Courts against various companies and individuals in connection with their sale of Microsoft software. Seven of the actions, filed in the Western District of Washington (Seattle), allege violation of an agreement, rather than infringement. That is, Microsoft runs a program titled "Microsoft Action Pack Subscriptions Initiative", or "MAPS", in which it provides discounted Microsoft software packages for product evaluation and internal use, but not for resale. Microsoft stated that this is its first round of lawsuits against MAPS Initiative resellers. Three other complaints contain more conventional allegations of distribution of counterfeit software. See, Microsoft release.

12/15. Basit Chaudhary pled guilty in U.S. District Court (DC) to one count of felony theft of government property, in connection with his theft 12 laptop computers from the Department of Labor, where he previously worked. See, Department of Justice (DOJ) release. The DOJ, which prosecuted this case, has its own problems with missing laptops and computer crime. For example, on August 5, 2002, the DOJ's Office of the Inspector General (OIG) released a series of reports on the control of laptop computers and weapons at five DOJ components. It stated that there were a total of 400 missing laptops, and 775 missing weapons. For the FBI, it reported 317 missing laptops and 212 missing weapons. Moreover, the OIG found that the FBI does not know if sensitive data was lost. See, story titled "FBI Loses 317 Laptops" in TLJ Daily E-Mail Alert No. 485, August 6, 2002. See also, story titled "FBI Employee Pleads Guilty to Computer Crime" in TLJ Daily E-Mail Alert No. 791, December 3, 2003.

12/15. A trial jury of the U.S. District Court (DMaine) returned a verdict of guilty against James Tobin on one count of conspiracy to commit telephone harassment in violation of 18 U.S.C. § 371 and 47 U.S.C. § 223 (a)(1)(D), and one count of aiding and abetting of telephone harassment in violation of 47 U.S.C. § 223 (a)(1)(D) and 18 U.S.C. § 2. Tobin is a former Republican National Committee employee who schemed to disrupt phone service to five Democratic party offices election day 2002. See, Department of Justice (DOJ) release.

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