|Congress Expands Powers of
12/9. The House amended and approved
S 1608, the
"Undertaking Spam, Spyware, And Fraud Enforcement With Enforcers beyond Borders
Act". This title renders the near acronym of US SAFE WEB Act. The Senate
then approved the House version of the bill. It is now ready for President
The bill increases the investigatory and information sharing powers of the
Federal Trade Commission's (FTC). The bill will, among
other things, enhance the FTC's ability to fight online fraud.
Legislative History. Sen. Gordon
Smith (R-OR) introduced this bill on July 29, 2005. The
Senate Commerce Committee approved
this bill on December 15, 2005, with little discussion. See, story titled
"Senate Commerce Committee Approves Bill to Expand FTC Powers to Pursue Online
Fraud" in TLJ Daily
E-Mail Alert No. 1,274, December 16, 2006.
The Senate approved its version of the bill on March 16, 2006, by unanimous consent.
Neither the House Commerce Committee (HCC),
nor any of its subcommittees, held a hearing or markup of this bill. The House approved an
amendment in the nature of a substitute offered by
Rep. Joe Barton (R-TX), the Chairman of the HCC,
without debate, or roll call vote. On December 9, 2006, the Senate approved the bill, as
amended by the House, by unanimous consent.
During the House of Representative's quick consideration
Rep. Dennis Kucinich (D-OH) asked Rep.
Barton, "Would you like to, for the benefit of those of us who aren't familiar
with it, just give a couple-sentence summary that elaborates a little bit?"
Rep. Barton responded that "This is just a bill on spam and enforcement of antispam
and spyware, things of this sort. The bill would provide additional authority to the FCC
to investigate spam that originates overseas and fraudulent practices of that sort."
The House then approved the bill.
Rep. Barton wrote in his
remarks that "The issue is important because fraud perpetrated against our
citizens increasingly originates or is committed outside the U.S: the Federal
Trade Commission reports 20% of the complaints it received are ``cross-border´´
fraud complaints. Under current law, there is little the FTC can do to stop or
prosecute a perpetrator outside the U.S."
He added that "The Safe Web Act will make two significant changes to help
stop the fraud and protect consumers. First, it amends the FTC Act definition of
“unfair or deceptive acts or practices” to include acts or practices involving
foreign commerce. Second, it allows the FTC to share information and cooperate
with foreign governments to investigate and take action on fraud complaints
consistent with existing law enforcement practices."
Reaction. FTC Chairman Deborah Majoras wrote in a
[PDF] that "Congress has taken an important step in the fight to combat cross-border
fraud by passing the US SAFEWEB Act. Just as today's marketplace has gone global, so have
scams and deception. Scammers cannot hide behind foreign borders to escape FTC law
enforcers. I appreciate this congressional initiative to provide the Commission
with useful tools that enhance our ability to bring law enforcement actions."
The Center for Democracy and Technology (CDT) wrote
in its web site that this bill "will help the Federal Trade Commission be more
effective in protecting consumers from spam, spyware, and Internet fraud on a global scale.
The bill allows the FTC and its foreign counterparts to share confidential information and
obtain investigative assistance from one another. CDT has long been supportive of this
measure given the increasingly international nature of Internet crime."
Summary of the Bill. This bill increases the FTC's
statutory authority in many ways. It will enable the FTC to more effectively
pursue fraud, and especially online fraud, that crosses national boundaries.
While Rep. Barton and others have focused on the bill's application to spam, spyware
and other internet based activity, this bill extends FTC authority in other areas as well.
However, many of the new powers do not apply to antitrust investigations.
Section 5 of the FTC Act , which is codified at
15 U.S.C. § 45, is
the provision that the FTC usually relies upon in actions against perpetrators
of 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 "acts or practices involving 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 would also add a new subsection to
15 U.S.C. § 46, which pertains to "Additional powers of Commission". The new
subsection 46(j) is titled "Investigative Assistance for Foreign Law Enforcement
Agencies". It enumerates numerous powers to assist foreign agencies, including
the conducting of investigations in the US. However, these new powers do not
apply to common carrier activities, or to foreign governments that assist terrorists.
The bill also adds a new subsection 46(k) that authorizes the sharing of information
with domestic and foreign criminal enforcement agencies when the FTC has "evidence
that any person, partnership, or corporation, either domestic or foreign, has engaged in
conduct that may constitute a violation of Federal criminal law".
The bill also amends
15 U.S.C. § 57b-2, which pertains to "Confidentiality". It amends subsection
57b-2(b)(6) to provide broader sharing of information with foreign agencies
investigating such things as "fraudulent or deceptive commercial practices" and
"foreign criminal laws".
Section 57b-2 currently contains a Freedom of Information Act (FOIA)
exemption for FTC investigation information. The bill maintains the basic
exemption: "Any material which is received by the Commission in any
investigation, a purpose of which is to determine whether any person may have
violated any provision of the laws administered by the Commission, and which is
provided pursuant to any compulsory process under this Act or which is provided
voluntarily in place of such compulsory process shall not be required to be
disclosed under section 552 of title 5, United States Code, or any other
provision of law, except as provided in paragraph (2)(B) of this section."
It then expands the exemption to include information acquired
from foreign sources, including "any material obtained from a foreign law
enforcement agency or other foreign government agency, if the foreign law
enforcement agency or other foreign government agency has requested confidential
treatment, or has precluded such disclosure under other use limitations, as a
condition of providing the material".
Stored Communications Act. The bill also creates a new section of the
FTCA titled "Confidentiality and Delayed Notice of Compulsory Process for
Certain Third Parties".
The bill provides that "The procedures for delay of notification
or prohibition of disclosure under the Right to Financial Privacy Act (12 U.S.C.
3401 et seq.) and chapter 121 of title 18, United States Code, including
procedures for extensions of such delays or prohibitions, shall be available to
the Commission ..." (Parentheses in original.)
Chapter 121 of Title 18 is the Stored Communications Act (SCA).
The SCA provides, at
18 U.S.C. § 2705, that the government can get from a court
"an order delaying the notification required under section 2703(b) of this title
for a period not to exceed ninety days".
U.S.C. § 2703(b) provides, in part, that "A governmental entity may require a
provider of remote computing service to disclose the contents of any wire or electronic
The bill provides that the FTC too can obtain from the court "an
order delaying notification or prohibiting disclosure" if the court "finds that
there is reason to believe that such notification or disclosure may cause an
The bill continues that the service provider is immune from liability for failure to
notify its customers, even liability under "contract or other legally enforceable
agreement, for failure to provide notice to any person that such process has been
The bill also 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." That is, the FTC is free to
seek orders compelling disclosure of information from service providers and
financial institutions in fora that are distant and inconvenient to the service
providers and financial institutions.
Moreover, the bill provides that upon application of the FTC
"all judicial proceedings pursuant to this section shall be held in camera and
the records thereof sealed until expiration of the period of delay or such other
date as the presiding judge or magistrate judge may permit".
Commentary. The new powers given to the FTC by this bill will enhance the FTC's
ability to fight internet based fraud that crosses international borders.
This bill gives the FTC new powers to compel third party service providers to
disclose the contents of stored wire and electronic communications, without
notice to the owner of the communications, and with a gag order imposed upon the
service provider. When the Congress considered related provisions in the context
of extending the expiring provisions of the USA PATRIOT Act, such provisions
generated opposition both within and outside of the Congress.
In contrast, there has been very little public debate or discussion of the
contents of this FTC bill.
There may be many reasons for this. One may be that affected groups, Representatives
and Senators have more confidence in the professionalism and integrity of the FTC than
the Department of Justice (DOJ), and its Federal Bureau of Investigation (FBI).
Another explanation may be that the House and Senate Commerce Committees are
more effective in exercising oversight over the FTC than the House and Senate
Judiciary Committees are in exercising oversight over the DOJ and FBI. Yet
another explanation may be timing. The House and Senate finally approved the FTC
bill after the midterm elections, when there was less motivation to gain
political advantage from opposing certain provisions of the bill.
|House But Not Senate Approves Caller ID
12/8. The House approved
the "Preventing Harassment through Outbound Number Enforcement Act", by voice
vote. This bill would add a new Section 1039 to Title 18 (the criminal code)
titled "Caller ID spoofing". The Senate did not approve this bill.
Proponents of this legislation will begin anew in the 110th Congress.
The bill provides that "Whoever knowingly modifies caller ID information with
the intent to defraud or harass another person, or to use another person's
caller ID information without consent, shall be fined under this title,
imprisoned for not more than five years, or both."
The bill provides that a "telephone call" means "a call made using a
telecommunications service or VOIP service".
The bill also includes a law enforcement exemption. It provides that "Any lawfully
authorized investigative, protective, or intelligence activity of a law enforcement agency
of the United States, a State, or a political subdivision of a State, or of an intelligence
agency of the United States, or any activity authorized under chapter 224 of this title."
Chapter 224 of Title 18 pertains to protection of witnesses.)
Rep. Tim Murphy (R-PA) introduced this bill on May
4, 2006. He will return in the 110th Congress. See also, Rep. Murphy's
Rep. Chris Cannon (R-UT) stated during floor
debate on December 8, 2006, that "In the last few years, the criminal activity known
as ``spoofing´´ has been on the rise. Caller ID spoofing occurs when a person deliberately
uses an incorrect, fake or fraudulent caller identification to hide their identity in order
to facilitate a fraudulent telephone call and to harass, trick or further a fraudulent
scheme. The victims of this activity include the legitimate owner of a caller ID or the
recipient of a fraudulent telephone call, who, as a result, may divulge legitimate
financial or identifying information such as credit card numbers or other financial
information. Spoofing is nothing less than criminal fraud."
Rep. Cannon continued that "Spoofing technology has become more accessible to the
average person, either through the purchase of Internet telephone equipment or through Web
sites specifically set up to spoof. These Web sites promote spoofing as a device to commit
fraud, prank phone calls and political attacks, and are used by telemarketers who are
attempting to avoid the current ``do not call´´ limits."
He concluded that "This legislation will help to deter telephone fraud, to protect
consumers from harassment, and to increase protection of consumers and their personally
identifiable data from fraudulent telephone use."
Rep. Bobby Scott (D-VA) stated that
"A misleading caller ID can enable criminals to get information that they
couldn't otherwise get. It will enable people to harass. There may be, however,
legitimate uses for this technology, and that is why I have to oppose the motion
to suspend the rules and pass the bill at this point."
"There are a lot of people for whom it should be illegal", said Rep. Scott.
"We had a hearing and we found that there are a lot of legitimate uses for
this. For example, women's shelters use misleading caller ID numbers. Businesses
may use a misleading caller ID number if they are calling from one line of many
lines. If they want people to call back on their main line, they want to use
that caller ID."
Rep. Cannon replied that the bill uses the language "defraud or harass".
Rep. Scott also said that "I was under the impression earlier today that we were
going to continue negotiating this and work on it and get a decent bill next year."
Rep. Murphy explained some of the abuses of caller ID spoofing. He said that "a
criminal could try to obtain personal financial information from individuals by falsely
using a bank's phone number. An ex-spouse can harass a former wife or husband who has
blocked calls from the ex-spouse's phone line. A pedophile could stalk a child by using a
school phone number or the phone number of a friend of the child. A sexual predator could
use a doctor's office phone number. Or a terrorist could make threats from a government
phone number, and there is no quick way to trace that original call".
See also, story titled "House Judiciary Committee Holds Hearing on Caller ID
Spoofing" in TLJ Daily E-Mail Alert No. 1,492, November 20, 2006.
|People and Appointments
12/13. The Senate confirmed
to be an Assistant Secretary of the Treasury, for tax policy, on December 8,
2006. He took the oath of office on December 13. See, DOT
12/13. The Senate confirmed Philip Swagel to be an Assistant Secretary
of the Treasury, for economic policy, on December 8, 2006. He took the oath of
office on December 13. See, DOT
12/13. The Senate confirmed Anthony Ryan to be an Assistant Secretary
of the Treasury, for financial markets, on December 8, 2006. He took the oath of
office on December 13. See, DOT
12/13. The Senate confirmed Michele Davis to be an Assistant Secretary
of the Treasury, for public affairs, on December 8, 2006. He took the oath of
office on December 13. See, DOT
12/13. The Senate confirmed Robert Hoyt to be General Counsel of the
Department of the Treasury, on December 8, 2006. He took the oath of office on
December 13. See, DOT
12/13. Dale Hatfield was named chairman of the
Management Advisory Committee. See, NTIA
12/8. The Senate confirmed the nomination of
Kneuer (at right) to be Assistant Secretary of Commerce for Communications and
Information -- that is, head of the National
Telecommunications and Information Administration (NTIA).
12/8. The Senate confirmed Rachel Paulose to be the U.S. Attorney for
the District of Minnesota for the term of four years.
|Congress Extends R&D Tax
12/8. The House and Senate approved
HR 6111, the
"Tax Relief and Health Care Act of 2006". This bill, among other things, revises
and extends the research and development (R&D) tax credit, revises and extends the
deduction for donation of computer technology and equipment, and extends normal trade
relations status to Vietnam. The bill is now ready for President Bush's signature.
Section 104 of the bill extends and modifies the R&D tax credit that is codified at
26 U.S.C. § 41. The statute currently provides that the credit does not
apply to any amount paid or incurred after December 31, 2005. The just enacted
bill changes this to December 31, 2007. The just enacted bill also provides that
"The amendments made by this subsection shall apply to amounts paid or incurred
after December 31, 2005."
This is a two year extension. The Congress has a long history of enacting brief, and
sometimes retroactive, extensions. The Congress has not yet made the R&D tax credit
The bill also increases in the rates of the Alternative Incremental Credit (AIC).
Robert Holleyman, head of the Business Software Alliance
(BSA), stated in a
release that "The R&D tax credit is critical to the vitality of the software
industry. Now that Congress has extended the credit, BSA member companies can to continue
to innovate at a pace consumers have come to expect and economies have come to
rely on. This extension will also permit more companies to perform research
activities in the United States."
William Archey, head of the American
Electronics Association (AEA), stated in a release that “The R&D tax credit
is an important investment in the US economy and American innovation. This
action was long overdue as the credit expired nearly one year ago."
He added that "By passing a strengthened version of the R&D tax credit,
Congress acted to enhance US competitiveness. Because of this action, companies
that were previously unable to do so can now take advantage of the R&D tax
credit, and we expect this will increase US-based R&D programs. What we need is
a greater predictability about the credit, and we hope the 110th Congress will
pass a permanent R&D tax credit."
Phil Bond, head of the Information Technology
Association of America (ITAA), praised the Congress in a
release for the
R&D tax credit provision.
Section 116 of HR 6111 pertains to "Corporate Donations of Scientific Property
Used for Research and of Computer Technology and Equipment". It extends the deduction
for donations of certain computer technology and equipment, which is codified at
26 U.S.C. § 170(e)(6), through December 31, 2007. This is a two year extension of the d
Also, HR 6111, at Sections 4001 through 4007, extends nondiscriminatory
treatment to the products of Vietnam.
President Bush released a
statement: "I commend the Congress for its bipartisan support for my request
to approve legislation authorizing the grant of permanent normal trade relations
to Vietnam. PNTR marks a significant step forward in the process of normalizing
relations with Vietnam and will benefit both our nations. This designation will
advance our trade and investment relations with Vietnam and ensure that the
United States shares in the economic benefits generated by Vietnam's imminent
membership in the World Trade Organization. Vietnam is demonstrating its strong
commitment to continuing economic reforms, which will support political reform
and respect for human rights. The American people welcome the remarkable
transformation and economic progress in Vietnam, and we will continue to work
together to strengthen our ties."
|Washington Tech Calendar
New items are highlighted in red.
|Wednesday, December 13
The House and Senate will next meet at 12:00 NOON on Tuesday,
January 4, 2007. See,
8:00 AM. The Federal Communications
Bar Association (FCBA) will host a breakfast. The speaker will be
Assistant Secretary of Defense for Networks and Information Integration / CIO. See,
registration form [PDF].
Registrations and cancellations are due by 5:00 PM on December 7. The price to
attend ranges from $30 to $55. Location: Mayflower Hotel, 1127 Connecticut
9:00 - 11:00 AM. Day two of a two day meeting of the
National Institute of Standards and Technology's
Committee on Advanced Technology. See,
notice in the Federal Register: November 28, 2006, Vol. 71, No. 228, at
Page 68800. Location: Employees Lounge,
Administration Building, NIST, Gaithersburg, MD.
10:00 AM - 12:00 NOON. The EMC Corporation will host
a panel discussion on the changes to the Federal Rules of Civil Procedure
(FRCP) that took effect on December 1, 2006. The speakers will include US
Magistrate Judge David Waxse (who has written opinions on electronic
discovery), Thomas Allman (Mayer Brown Rowe & Maw), and Chris Panagiotopoulos
(Director of Information Technology of LifeBridge Health, Inc.). Press
contact: Erin Zeitler, EZeitler at outcastpr dot com or 212-905-6047.
Location: Grand Hyatt Washington, 1000 H Street, NW.
10:30 AM - 12:30 PM. The
National Telecommunications and Information
Administration NTIA) Commerce
Spectrum Management Advisory Committee will hold its first meeting. The agenda
includes "(1) Discussion of Committee organization and future agendas and (2)
Briefings on matters related to the President's Spectrum Policy Initiative." See,
notice in the Federal Register, November 28, 2006, Vol. 71, No. 228, at Page
68808. Location: Hoover Building, Room 6059, 1401 Constitution Ave., NW.
11:00 AM - 12:00 NOON. The Federal Communications
Commission's (FCC) Advisory Committee for the 2007 World Radiocommunication
Conference (WRC-07 Advisory Committee) will meet. See, FCC
notice in the Federal Register, November 1, 2006, Vol. 71, No. 211, at Page 64278.
Location: FCC, Commission Meeting Room, Room TW-C305, 445 12th St., SW.
12:00 NOON. The Cato
Institute will host a panel discussion on the
book [Amazon] titled "Overblown: How Politicians and the Terrorism Industry
Inflate National Security Threats, and Why We Believe Them". The speakers will
include James Gilmore (former Governor of Virginia) and
John Mueller (author). See,
notice and registration page.
Lunch will be served after the program. Location: Cato, 1000 Massachusetts
2:00 - 3:15 PM. The Broadcasting Board of Governors
will hold a closed meeting. See,
notice in the Federal Register, December 12, 2006, Vol.71, No. 238, at
Page 74485. Location: Cohen Building, Room 3321, 330 Independence Ave., SW.
TIME? The National Institute
of Standards and Technology (NIST) will host a conference titled "2nd Annual
NIST/USMS Telemedicine Workshop". See,
Location: National Institutes of Health (NIH), Natcher Center, Building 45,
9000 Rockville Pike, Bethesda, MD.
6:00 - 8:15 PM. The DC Bar
Association will host a continuing legal education (CLE) seminar titled "2006
Intellectual Property Law Year in Review: 2-Part Series: Patent Law Update".
The speakers will include
Bradley Wright (Banner & Witcoff) and
(Morgan & Finnegan). The price to attend ranges from $80 to $115. For more
information, call 202-626-3488. See,
notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
|Thursday, December 14
9:00 AM - 5:00 PM. Day one of a two day conference hosted by the
Federal Communications Bar Association (FCBA) and the
Practicing Law Institute titled "Telecommunications
Policy and Regulation". See,
agenda [MS Word] and
registration form [MS Word]. The price to attend ranges from $1,165.50 to
$1,295. The price for FCC employees is $25. Location: Washington Hilton Hotel, 1919
Connecticut Ave., NW.
RESCHEDULED FOR DECEMBER 20.
9:30 AM. The
Commission (FCC) will hold a meeting. The event will be webcast by the FCC.
Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).
Deadline to submit initial comments to the Federal
Communications Commission (FCC) regarding the National Aeronautics and Space
Administration's (NASA) request for a waiver of the FCC's Calling Party
Number rules. This proceeding is CC Docket No. 91-281. See,
notice in the Federal Register, November 29, 2006, Vol. 71, No. 229, at
|Friday, December 15
9:00 AM - 12:45 PM. Day two of a two day conference hosted by the
Federal Communications Bar Association (FCBA) and
the Practicing Law Institute titled
"Telecommunications Policy and Regulation". See,
agenda [MS Word] and
registration form [MS Word].
The price to attend ranges from $1,165.50 to $1,295. The price for FCC employees is
$25. Location: Washington Hilton Hotel, 1919 Connecticut Ave., NW.
9:30 AM - 12:30 PM. The National Archives and
Records Administration (NARA) Information Security Oversight Office's (ISOO)
Public Interest Declassification Board (PIDB) will hold a meeting. See,
notice in the Federal Register, December 5, 2006, Vol. 71, No. 233, at Pages
70550-70551. Location: NARA, Rooms 500 and 501, 700 Pennsylvania
Deadline to submit initial comments to the Federal Communications
Commission (FCC) to assist the Wireless
Telecommunications Bureau (WTB) in drafting a report on the ability of persons
with hearing disabilities to access digital wireless telecommunications. See, FCC
Notice [4 pages in PDF] (DA 06-2285). This proceeding is WT Docket No. 06-203.
Deadline to submit initial comments to the
Office of the US Trade Representative regarding the
operation, implementation and effectiveness of all trade agreements regarding
telecommunications products and services to assist it in preparing its annual Section
1377 report. See,
notice in the Federal Register, November 15, 2006, Vol. 71, No. 220, at
|Saturday, December 16
|Monday, December 18
Effective date of the Report and Order (R&O) portion of
the Federal Communications Commission's (FCC) R&O and Further Notice of Proposed
Rulemaking (FNPRM) in its TV white space proceeding. This item is FCC 06-156 in ET
Docket Nos. 04-186 and 02-380. The FCC adopted this item at an October 12, 2006, meeting,
and released it on October 18, 2006. See, story titled "FCC Adopts Order and FNPRM
Regarding TV White Space" in TLJ Daily E-Mail Alert No. 1,467, October 12, 2006, and
notice in the Federal Register, November 17, 2006, Vol. 71, No. 222, at
|Tuesday, December 19
1:00 - 4:00 PM. The President's
National Security Telecommunications
Advisory Committee (NSTAC) will
hold a partially closed meeting. At 1:00 PM the NSTAC will meet in public to
receive comments from government agencies, to discuss the work of the NSTAC's
Emergency Communications and Interoperability Task Force (ECITF), and to
discuss the work of the Telecommunications and Electric Power Interdependency
Task Force (TEPITF). At 3:00 PM the NSTAC will meet in secret to
discuss the Global Infrastructure Resiliency (GIR) Report. See,
notice in the Federal Register, December 4, 2006, Vol. 71, No. 232, at
Pages 70413. Location: U.S. Chamber of Commerce, 1615 H St., NW.
|Wednesday, December 20
RESCHEDULED FROM DECEMBER 14. 9:30 AM. The
Federal Communications Commission (FCC) will hold a
meeting. The event will be webcast by the FCC.
Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).
Deadline to submit initial comments to the
Federal Communications Commission (FCC) regarding the petition for declaratory ruling
filed by One Stop Financial, Inc., Group Discounts, Inc., 800 Discounts, Inc., and
Winback & Conserve Program, Inc. pertaining to the AT&T tariff at issue, and
"any other issues left open by the D.C. Circuit’s Opinion in AT&T Corp. v.
FCC", 394 F.3d 933. This proceeding is WC Docket No. 06-210. See, FCC
Public Notice [3 pages in PDF] (DA 06-2360).
|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
P.O. Box 4851, Washington DC, 20008.
Copyright 1998 - 2006 David Carney, dba Tech Law Journal. All