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July 11, 2006, Alert No. 1,408.
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House Approves Unlawful Internet Gambling Enforcement Act

7/11. The House approved HR 4411, the "Unlawful Internet Gambling Enforcement Act of 2006" by a vote of 317-93. See, Roll Call No. 363. Republicans voted 201-17. Democrats voted 115-76.

Rep. James Leach (R-IA) introduced HR 4411 on November 18, 2005. However, Rep. Leach has been introducing related bills for many years. For a summary of the bill, and the history of related legislation, see story titled "House Financial Services Committee Approves Internet Gambling Bill" in TLJ Daily E-Mail Alert No. 1,330, March 16, 2006.

HR 4411 is an attempt to stop internet gambling by regulating the financial transactions that fund what already constitutes unlawful internet gambling. It provides that no one engaged in the "business of betting or wagering" may knowingly accept certain financial transactions, including checks, electronic fund transfers, and credit card debt, in connection with "unlawful Internet gambling".

The bill then requires the Department of the Treasury (DOT) and the Federal Reserve Board (FRB) to write regulations that require each "designated payment system" to identify and block these restricted transactions through the establishment of policies and procedures. The bill requires each "financial transaction provider" to comply with these DOT/FRB regulations.

The bill contains numerous exemptions and limitations. For example, the term "bet or wager" does not include "any participation in a fantasy or simulation sports game". Also, the term "unlawful Internet gambling" does not include a bet or wager where "the bet or wager is initiated and received or otherwise made exclusively within a single State ... the bet or wager ... is expressly authorized by and placed in accordance with the laws of such State ... and ... the bet or wager does not violate any provision of the ... Interstate Horseracing Act ... or ... Indian Gaming Regulatory Act." Moreover, the term "unlawful Internet gambling'" does not include betting or wagering "that is governed by and complies with the Interstate Horseracing Act of 1978".

The bill provides that "No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling -- (1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card); (2) an electronic fund transfer, or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of such other person; (3) any check, draft, or similar instrument which is drawn by or on behalf of such other person and is drawn on or payable at or through any financial institution; or (4) the proceeds of any other form of financial transaction, as the Secretary and the Board of Governors of the Federal Reserve System may jointly prescribe by regulation, which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of such other person."

On July 10 the House Rules Committee (HRC) adopted a rule for consideration of HR 4411 that made in order only one amendment [2 pages in PDF], to be offered by Rep. Shelley Berkley (D-NV), Rep. Robert Wexler (D-FL), and Rep. John Conyers (D-MI).

The rule stated that this amendment "eliminates the exceptions to the bill's general prohibition against online gambling, thereby establishing a complete ban on all internet gambling-related activities".

The sponsors for this amendment wrote in a statement for the HRC that "Somehow we find ourselves in a situation where Congress has gotten in the business of cherry-picking types of gambling. Without my amendment, this committee will effectively be saying that horse track betting is okay on the Internet but dog track and Jai Alai are out. ... The bottom is -- if we pass this bill, you will end up in a situation where horse track betting will be able to occur on the Internet, but you won't be able to do dog track betting on the Internet, you won't be able to do Jai Alai betting on the Internet."

However, the House rejected this amendment by a vote of 114-297. See, Roll Call No. 361. Republicans voted 9-210. Democrats voted 104-87. Also, a motion to recommit the bill to committee failed by a vote of 167-243. See, Roll Call No. 362. Republicans voted 1-218. Democrats voted 165-25.

There is a second bill, HR 4777, the "Internet Gambling Prohibition Act", that deals with criminal prohibitions related to internet gambling. On May 3, 2006, the House Judiciary Committee's (HJC) Subcommittee on Crime, Terrorism, and Homeland Security approved this bill by voice vote, without amendment.  See also, story titled "House Crime Subcommittee Approves Internet Gambling Prohibition Act" in TLJ Daily E-Mail Alert No. 1,364, May 5, 2006. The full Committee amended and approved the bill on May 25, 2006.

The Cato Institute's Radley Balko wrote a short piece on July 7 titled "Federal Ban on Internet Gambling Marches On". He argued that "Because the bill effectively deputizes banks to sniff out and eradicate gambling among their customers (the creepy privacy implications of that alone ought to kill this bill), it amounts to a piece of blatantly protectionist legislation. Its practical effect will be to shield a domestic company (PayPal, which is owned by eBay) from foreign competitors like FirePay and Netteller." (Parentheses in original.)

See also, Balko's June 11 piece titled "eBay Invites Internet Regulation, Backs Online Gambling Ban".

District Court Denies Rep. Jefferson's Motion for Return of Property

7/10. The U.S. District Court (DC) denied Rep. William Jefferson's (D-LA) motion for return of property and other relief in his challenge to the Federal Bureau of Investigation's (FBI) search of, and seizure of paper documents and computer files from, his Congressional office in the Rayburn Building.

The District Court wrote in its Memorandum Opinion [28 pages in PDF] that "the search executed on Congressman Jefferson's congressional office was constitutional, as it did not trigger the Speech or Debate Clause privilege, did not offend the principle of the separation of powers, and was reasonable under the Fourth Amendment."

The FBI obtained a search warrant from the District Court to search Rep. Jefferson's office. It conducted the search without notice to, or consent from, either Rep. Jefferson or the House of Representatives.

House Speaker Dennis Hastert (R-IL), Rep. John Boehner (R-OH), the Majority Leader, Rep. Roy Blunt (R-MO), the Majority Whip, Rep. Nancy Pelosi (D-CA), the Democratic Leader, and Rep. Steny Hoyer (D-MD), the Democratic Whip, filed a joint amicus brief in support of Rep. Jefferson.

The Department of Justice (DOJ) has not charged, or obtained an indictment of, Rep. Jefferson. Hence, Rep. Jefferson filed a motion for return of property, pursuant to Rule 41 of the Federal Rules of Criminal Procedure, rather than a motion to suppress evidence.

Rep. Jefferson, and the House leaders, argued that the search violated the speech or debate clause of the Constitution, which provides that "The Senators and Representatives ... shall in all Cases, except Treason, Felony, and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same; and for any Speech or Debate in either House, they shall not be questioned in any other Place."

In particular, they argued that the no notice search of his office entailed search of privileged materials, in violation of the speech or debate clause. They also argued that the search violated the doctrine of separation of powers.

This proceeding is In Re: Search of the Rayburn House Office Building Room Number 2113, Washington, D.C. 20515, U.S. District Court for the District of Columbia, D.C. No. 06-0231 M-01, Judge Thomas Hogan presiding.

Schwab Discusses Doha Negotiations and Russia's Enforcement of IPR

7/10. Susan Schwab, the U.S. Trade Representative (USTR), gave a speech and answered questions regarding the absence of progress in recent Doha round negotiations in Geneva, Switzerland.

She said, "Where does Doha go from here? Above all we need to avoid defeatist thinking. That's not going to help us. ... What does the United States do from here? Obviously, as you can tell, we're still committed to getting this Doha round done and done this year. We also have, I might mention just in closing, a very ambitious bilateral and regional agenda ..."

Schwab also discussed Russia's joining the World Trade Organization (WTO) and intellectual property theft in Russia. She said that "it is in Russia’s own best interest to be fully integrated into the global economy. You can’t be fully integrated into the global economy unless you are operating under a system of rules, of controls, of in this case trade agreements with transparency and due diligence and processes that are internationally accepted, internationally recognized."

She continued that "It is in Russia’s interest, both in terms of its own entrepreneurs, its own creative class, its own engineers and inventors, to protect intellectual property. Not just the intellectual property, international, that other foreign companies or individuals create but also Russian intellectual property. President Putin has spoken specifically about this and there have been some real improvements in terms of their treatment and protection of intellectual property. We're not there yet, but they’re doing it and they’re doing it for their own sake. They’re doing it for the right reasons."

Sen. Charles Grassley (R-IA), the Chairman of the Senate Finance Committee stated on July 11, 2006, in a conference call with farm broadcasters that he would not "bring in a Doha ``light´´ agreement to my committee".

He added that "My advice to Susan Schwab was go to Geneva -- she did two weeks ago -- and just think of two things; sit, in other words, sit and listen, and the second one is, if you sit and don't like what you hear, then walk. And I think basically that's what she's done, she's done right".

More News

7/10. The U.S. Court of Appeals (7thCir) issued its opinion [PDF] in McCready v. eBay, affirming two District Court dismissals, and ordering McCready to show cause why he should not be sanctioned by the District Court for abuse of process. The Court of Appeals wrote that Kenneth A. McCready, who has had accounts with eBay, has a long and "wildly unsuccessful" history of filing complaints in state and federal courts around the country against eBay and its customers. However, the Court of Appeals wrote that McCready's complaints and numerous motions are meritless and harassing. This case is Kenneth A. McCready v. eBay, Inc., Bruce Kamminga, and David McDuffee, U.S. Court of Appeals for the 7th Circuit, App. Ct. Nos. Nos. 05-2450 and 05-3043, appeals from the U.S. District Court for the Central District of Illinois, D.C. Nos. 03 C 2117 and 05 C 2033.

7/6. Donald Kohn, Vice Chairman of the Federal Reserve Board, gave a speech in London, United Kingdom, titled "Reflections on Globalization and Policies".

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Washington Tech Calendar
New items are highlighted in red.
Tuesday, July 11

The House will meet at 9:00 AM for morning hour, and at 10:00 AM for legislative business. It will consider HR  5646, a bill to require that the Environmental Protection Agency (EPA) study and promote the use of energy efficient computer servers, and HR 4411, the "Unlawful Internet Gambling Enforcement Act of 2006. See, Republican Whip Notice.

10:00 AM. The House Financial Services Committee will hold a hearing titled "The Terror Finance Tracking Program". The witnesses will include Stuart Levey, Under Secretary for Terrorism and Financial Intelligence at the Department of the Treasury. Location: Room 2128, Rayburn Building.

10:00 AM. The House Commerce Committee's (HCC) Subcommittee on Telecommunications and the Internet will hold a hearing on HR 5319, the "Deleting Online Predators Act of 2006". The witnesses will be Greg Abbott (Texas Attorney General), Michelle Collins (National Center for Missing and Exploited Children), Amanda Lenhart (Pew Internet and American Life Project), Beth Yoke (ALA Young Adult Library Services Association), Ted Davis (Fairfax County Public Schools), Parry Aftab (, Chris Kelly (Facebook), and David Zellis (Office of the Bucks County District Attorney). See, notice. Location: Room 2123, Rayburn Building.

12:00 NOON - 2:00 PM. The DC Bar Association will host a panel discussion titled "The Supreme Court: The View from the Press Gallery". The speakers will include Joan Biskupic (USA Today), Charles Lane (Washington Post), Tony Mauro (Legal Times and American Lawyer Media), David Savage (Los Angeles Times), and Stuart Taylor (National Journal and Newsweek). The price to attend ranges from $15-$35. For more information, call 202-626-3463. See, notice. Location: Arnold & Porter, 555 12th Street, NW.

2:00 PM. The House Commerce Committee's (HCC) Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled "CFIUS Reform: HR 5337, the Reform of National Security Reviews of Foreign Direct Investments Act". See, HR 5337 and HCC notice. Location: Room 2123, Rayburn Building.

2:15 PM. The Senate Judiciary Committee (SJC) may hold a hearing on judicial nominations. The SJC frequently cancels or postpones hearings without notice. Press contact: Courtney Boone at 202-224-5225. See, notice. Location: Room 226, Dirksen Building.

POSTPONED. 2:30 PM. The Senate Homeland Security and Governmental Affairs Committee's Subcommittee on Federal Financial Management, Government Information, and International Security will hold a hearing titled "Cyber Security: Recovery and Reconstitution of Critical Networks". See, notice. Location: Room 342, Dirksen Building.

Deadline to submit initial comments to the Copyright Office regarding its proposal to amend its rules governing the submission of royalty fees to the Copyright Office to require such payments to be made by electronic funds transfer. See, notice in the Federal Register, April 27, 2006, Vol. 71, No. 81, at Pages 24829-24831.

Wednesday, July 12

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

9:00 AM. The U.S. District Court (DC) will hold a motion hearing in USA v. SBC. Judge Sullivan will preside. This case is U.S.A. v. SBC Communications, et al., D.C. No. 1:05CV02102 (EGS). See also, the Department of Justice's (DOJ) web page with hyperlinks to its pleadings in this case. Location: Courtroom 24A, 333 Constitution Ave., NW.

10:00 AM. The Senate Finance Committee will hold a hearing on S 3495, a bill to authorize the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of Vietnam. See, notice. Location: Room 215, Dirksen Building.

10:00 AM. The House Judiciary Committee will meet to mark up several bills. The agenda does not include any technology related bills, but bills may be added to the agenda. See, notice. Press contact: Jeff Lungren or Terry Shawn at 202-225-2492. Location: Room 2141, Rayburn Building.

10:30 AM. The House Ways and Means Committee will hold a hearing titled "Implementation of the United States-Peru Trade Promotion Agreement". See, notice. Press contact: 202- 225-1721. Location: Room 1100, Longworth Building.

10:30 AM. The Senate Banking Committee will hold a hearing on several pending nominations, including that of Frederic Mishkin to be a member of the Board of Governors of the Federal Reserve System. See, notice. Location: Room 538, Dirksen Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch. Andrew Cotlar (Associate General Counsel of the Association of Public TV Stations) will speak on public broadcasting in the US. For more information, contact Robert Rini at rrini at rinicoran dot com or 202-463-4301. Dial-In Information: 1-866-443-4185, participant code #31665. Location: Sheppard Mullin, 1300 I Street, NW, 11th Floor.

The calendar for the U.S. Court of Appeals (FedCir) states that it will consider, on the briefs, Eolas Technologies v. Microsoft. This is App. Ct. No. 2006-1238.

Thursday, July 13

The House will meet at 10:00 AM for legislative business. It may consider HR 4411, the "Unlawful Internet Gambling Enforcement Act of 2006". See, Republican Whip Notice.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. See, agenda [PDF]. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

9:30 AM - 5:30 PM. The Antitrust Modernization Commission (AMC) will hold a meeting to deliberate on possible recommendations regarding the antitrust laws to Congress and the President. The meeting is open to the public, but registration is required. See, notice in the Federal Register, June 23, 2006, Vol. 71, No. 121, at Page 36059. Location: Morgan Lewis, main conference room, 1111 Pennsylvania Ave., NW.

9:30 AM. The Senate Judiciary Committee may hold an executive business meeting. Press contact: 202-224-5225. See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Finance Committee will hold a hearing on the nomination of Eric Solomon to be Assistant Secretary of the Treasury for Tax Policy. Location: Room 215, Dirksen Building.

10:00 AM. The Senate Homeland Security and Governmental Affairs will hold a hearing on the nomination of Eric McMillin to be Deputy Director of the Office of Management and Budget (OMB). See, notice. Location: Room 342, Dirksen Building.

10:30 AM. The House Ways and Means Committee's Subcommittee on Select Revenue Measures will hold a hearing titled "Issues Relating to the Patenting of Tax Advice". See, notice. Location: Room B-318, Rayburn Building.

12:00 NOON - 2:00 PM. The Alliance for Public Technology (APT) will host a brown bag lunch titled "Preemption of State Wireless Regulation: Where Do Consumers Fit In?". The speakers will be Brian Fontes (Cingular) and Dane Snowden (CTIA). RSVP to apt at apt dot org or 202-263-2970. Location: 919 18th St., NW, 10th Floor Conference Room.

2:00 - 5:00 PM. The Center for Democracy and Technology (CDT) and the Congressional E-9-1-1 Caucus will host a demonstration titled "Emergency Communications Services Tech Fair". See, notice. There will also be a reception at 5:00 - 7:00 PM. Location: Rayburn Foyer, Rayburn Building, Capitol Hill.

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing titled "Unmanned Aerial Systems in Alaska: A Framework for the Nation". Sen. Ted Stevens (R-AK) will preside. See, notice. Location: Room 562, Dirksen Building.

TIME? The Board of Directors of the American Intellectual Property Law Association (AIPLA) will meet. Location: AIPLA, Headquarters Board Room, Arlington, VA.

6:00 - 9:15 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled & "Antitrust Investigations: Tactical and Ethical Issues". The speakers will include Ray Hartwell (Hunton & Williams), Kathryn Fenton (Jones Day), Donald Klawiter (Morgan Lewis & Bockius), Ann Marie O’Brien (Antitrust Division). The price to attend ranges from $70-$125. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

Friday, July 14

The Republican Whip Notice states that there are no votes expected in the House.

5:00 PM. Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding its special provincial review (SPR) of intellectual property rights (IPR) protection in Peoples Republic of China (PRC). See, notice in the Federal Register, June 16, 2006, Vol. 71, No. 116, at Pages 34969-34970.

Monday, July 17

6:00 PM. Deadline for upfront payments for the Federal Communications Commission's (FCC) Auction 66. This is the auction of Advance Wireless Services (AWS) licenses in the 1710-1755 MHz and 2110-2155 MHz (AWS-1) bands. See also, notice in the Federal Register, June 2, 2006, Vol. 71, No. 106, at Pages 32089-32091.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding whether and how an open global database of proxy numbers of Video Relay Service (VRS) users may be created so that a hearing person may call a VRS user through any VRS provider without having to ascertain the first VRS user's current internet protocol address. See, notice in the Federal Register, May 31, 2006, Vol. 71, No. 104, at Pages 30848-30856. This FNPRM is FCC 06-57 in CG Docket No. 03-123.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its further notice of proposed rulemaking (FNPRM) regarding telecommunications relay services (TRS) and speech to speech services for individuals with hearing and speech disabilities, and misuse of internet protocol relay service and video relay service. This item is FCC 06-58 in CG Docket No. 03-123. See, notice in the Federal Register, June 1, 2006, Vol. 71, No. 105, at Pages 31131-31137.

Tuesday, July 18

8:30 - 10:00 AM. The Progress and Freedom Foundation (PFF) will host a book launch for Net Neutrality or Net Neutering: Should Broadband Internet Services be Regulated? This book is a collection of essays. The speakers will be Thomas Lenard (PFF), Randy May (Maryland Free State Foundation), and Adam Thierer (PFF). See, notice and registration page. Location: Holeman Lounge, National Press Club, 529 14th St., NW.

8:30 AM - 1:30 PM. The U.S. Chamber of Commerce's National Chamber Foundation will host an event titled "The State of the American Judiciary". The keynote speaker will be Justice Antonin Scalia. See, notice. For more information, contact Danielle Walker at 202-463-5500 or ncfevents at uschamber dot com. Location: U.S. Chamber, 1615 H Street, NW.

12:00 NOON - 1:30 PM. The DC Bar Association will host a panel discussion titled "Trademarks and the Internet". The speakers will include David Kelly (Finnegan Henderson). The price to attend ranges from $15-$30. For more information, call 202-626-3463. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

1:00 - 3:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee will meet to prepare for ITU Radiocommunication Sector's Special Committee on Regulatory/Procedural Matters that will take place on December 4-8, 2006, in Geneva, Switzerland. See, notice in the Federal Register, May 4, 2006, Vol. 71, No. 86, at Pages 26397-26398. Location: Boeing Company, 1200 Wilson Blvd., Arlington, VA.

1:30 - 5:00 PM. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) will hold their third joint public hearing on "whether and when specific types of single-firm conduct may violate Section 2 of the Sherman Act by harming competition and consumer welfare and when they are pro-competitive or benign". This hearing will focus on refusals to deal. The presenters will be Stephen Donovan (International Paper), William Kolasky (WilmerHale), Hewitt Pate (Hunton & Williams), Robert Pitofsky (Georgetown University Law Center), Steven Salop (Georgetown University Law Center), and Mark Whitener (General Electric). Location: Conference Room C, 601 New Jersey Ave., NW.

TIME? The Federal Communications Commission's (FCC) North American Numbering Council (NANC) will hold a meeting. Location: ___.

Day one of a two day conference hosted by the National Institute of Standards and Technology (NIST) ant the American National Standards Institute (ANSI) titled "Options for Action Summit: Addressing U.S. Competitiveness in Global Standardization". See, notice. Location: NIST, 100 Bureau Drive, Gaithersburg, MD.

Day one of a two day closed meeting of the Defense Science Board 2006 Summer Study on Information Management for Net-Centric Operations. See, notice in the Federal Register, April 11, 2006, Vol. 71, No. 69, Page 18292. Location: 3601 Wilson Boulevard, 3rd Floor, Arlington, VA.