6/6. The House approved HR 964 [LOC | WW], the "Securely Protect Yourself Against Cyber Trespass Act", the House Commerce Committee's (HCC) spyware bill, by a vote of 368-48. See, Roll Call No. 434.

This bill would prohibit certain deceptive acts or practices related to spyware, and prohibit collection of certain information without notice and consent. It would give civil enforcement authority to the Federal Trade Commission (FTC). It would also preempt certain state spyware related laws.

See also, stories titled "House Subcommittee Approves SPY ACT" and "Summary of HR 964, the SPY ACT" in TLJ Daily E-Mail Alert No. 1,568, April 23, 2007.

Rep. Ed Towns (D-NY), sponsor of the bill, stated that "There is no debate that Spyware is a serious problem. These programs can invade your privacy by recording and transmitting personal information, monitoring the websites you visit or even steal documents from your computer. Spyware software usually impairs the functionality of a computer, often slowing its operation to a grinding halt. This is the primary reason Representative Mary Bono and I crafted this legislation".

On May 22, 2007, the House approved HR 1525 [LOC | WW], the "Internet Spyware (I-SPY) Prevention Act of 2007", the House Judiciary Committee's bill, by voice vote. The Senate has yet to approve either bill. See, story titled "House Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 1,586, May 23, 2007, and story titled "House Crime Subcommittee Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 1,573, May 2, 2007.

43 of the 48 votes against the HR 964 were cast by Republicans. Rep. Zoe Lofgren (D-CA) and Rep. Jerry Honda (D-CA), both of whom represent Silicon Valley districts, voted against the bill. Rep. Bob Goodlatte (R-VA) also voted against the bill. Rep. Lofgren and Rep. Goodlatte are sponsors of the HJC bill, HR 1525.

6/5. The Securities and Exchange Commission (SEC) issued an administrative order [PDF] instituting cease and desist proceeding against IBM.

IBM and the SEC settled this matter, with the SEC alleging violation of Section 13(a) of the Exchange Act by IBM, but IBM admitting no wrongdoing. The SEC ordered IBM to cease and desist from violating federal securities laws. The SEC imposed no fine.

The order states that "This matter involves a misleading chart presented by IBM during an April 5, 2005 conference call with analysts, which was simultaneously webcast, and included in a Form 8-K filed with the Commission, relating to the impact that the company’s decision to expense employee stock options would have on its first quarter 2005 (``1Q05´´) and fiscal year 2005 (``FY05´´) earnings results."

It continues that "During the conference call, IBM announced that beginning in 1Q05 it would report stock options as an expense in its financial statements and advised analysts to adjust their earnings models to account for the change. At the time, IBM expected that its stock options expense for 1Q05 would have a $0.10 impact on first quarter earnings per share results and estimated a $0.39 impact on FY05 earnings per share results. IBM did not disclose this information during the conference call or in its subsequently filed Form 8-K. IBM included a misleading chart in its presentation which was understood by many analysts to indicate that the earnings per share impact of the stock options expense would be $0.14 for 1Q05 and $0.55 for FY05, thereby causing analysts to lower their 1Q05 and FY05 earnings per share estimates by these amounts. By engaging in this conduct, IBM violated the reporting provisions of the federal securities laws."

Specifically, the SEC stated that this violated Section 13(a) of the Exchange Act, which is codified at 15 U.S.C. § 78m(a), and Rule 13a-11 thereunder, which is codified at 17 C.F.R. § 240.13a-11.

Scott Friestad, Associate Director of Enforcement at the SEC, stated in a release that "IBM misled investors by failing to disclose information that would have allowed them to accurately determine the impact that the company's decision to expense stock options would have on its financial results. The facts here are particularly troubling because the disclosure decision was driven, in part, by management's perception of how the news would be interpreted by analysts."

This release adds that this is a "settled enforcement action".

IBM stated in a release that it "has consented to entry of an administrative order by the SEC directing that IBM cease and desist from committing or causing any violations of certain of the reporting provisions of the federal securities laws and related SEC rules. IBM consented to this order without admitting or denying any wrongdoing. The SEC's order contains no finding of securities fraud or violation of any antifraud provision of the federal securities laws and related SEC rules. No monetary penalty or fine was imposed in connection with the resolution of this matter."

6/5. Henry Paulson, the Secretary of the Treasury, gave a speech titled "China and the Strategic Economic Dialogue" at the Heritage Foundation in Washington DC.

He said that "I believe it is in the best interest of the United States, China and the rest of the world that China move more quickly to adopt market-based reforms. And that is one of the primary objectives of the SED -- to speed the pace of reform in China.

He also explained the history of the strategic economic dialogue (SED). "In August, 2006, President Bush and President Hu agreed to create an on-going forum to manage our economic relationship, for our mutual benefit, on a long-term strategic basis. We held our inaugural meeting in Beijing, continued our efforts through a series of meetings among Chinese and U.S. officials, and held the second meeting two weeks ago here in Washington."

He also said that "Our discussions also focused on increasing government transparency and intellectual property rights. We signed an agreement to strengthen the enforcement of intellectual property laws, and to maintain an exchange between our respective Customs staff to share experiences on counterfeit goods and seizures."

But, he said that the task of the SED is "long term". He continued that "The dialogue is an on-going process. To get results, we must build relationships, and take smaller, deliberate steps forward together to create momentum for greater change. Through candid discussions, we will ease, rather than increase, tensions and get to solutions and action."

6/1. The National Telecommunications and Information Administration (NTIA) issued a Sources Sought Notice that states that it "intends to procure the services of a Contractor to manage, maintain, and operate the usTLD under NTIA's supervision".

In addition to managing the usTLD, the contractor must also achieve other objectives, including protection of intellectual property rights, especially in trademarks, and promotion of the use of the usTLD, especially in kids.us.

The notice states that the contractor must "Adequately protect intellectual property in the usTLD and as developments in the expanded and the locality usTLD space may necessitate. In the event of further expansion of the usTLD space, the Contractor shall implement a ``sunrise period´´ for qualified trademark owners to pre-register their trademarks as domain names prior to the wider registration for non-trademark owners and a dispute resolution procedure to address ``cybersquatting´´ conflicts between trademarks and domain names in the usTLD."

The notice also states that the contractor must "Promote increased use of the usTLD, including kids.us, by the Internet community of the United States (including small businesses, consumers, not-for-profit organizations, and state and local governments), with a residence or bona fide presence in the United States by introducing enhanced technical and other services, disseminating information about the usTLD, and improving registration and customer services." (Parentheses in original.)

The notice adds that "Affirmative responses must be received Friday, June 22, 2007 by 12:00 p.m. Noon Eastern Standard Time."

6/4. Susan Schwab, the head of the Office of the U.S. Trade Representative (USTR), gave a speech [9 pages in PDF] in which she discussed an agreement between Congressional leaders and the Bush administration regarding trade issues, and the free trade agreement (FTA) with Korea.

She said that "the bipartisan agreement offers a clear and reasonable path forward for all four pending FTAs -- even though each will move along that path in its own way and in its own time." The four FTAs are with Korea, Peru, Columbia, and Panama.

She also said that the agreement "opens the door for an extension of Trade Promotion Authority, which will be essential to complete the Doha Round. It does not guarantee TPA renewal, but it does lay the groundwork. A ``necessary but not sufficient´´ condition."

She said that the FTA with Korea will be "the most commercially significant FTA we have negotiated in over 15 years. Moreover, the KORUS FTA advances the strategic imperative for the United States to increase its economic footprint in Asia."

She also discussed the impact of the Korea FTA on the automobile and beef sectors, and its provisions regarding labor and environment.

See also, story titled "US and Korea Announce FTA" in TLJ Daily E-Mail Alert No. 1,559, April 2, 2007. See, text of the agreement, and particularly, sections regarding telecommunications [17 pages in PDF], electronic commerce [4 pages in PDF], intellectual property rights [35 pages in PDF]

6/4. Sen. Craig Thomas (R-WY) died. He was a member of the Senate Finance Committee (SFC), and an advocate of free trade.

6/6. President Bush withdrew his nomination of former Rep. Henry Bonilla (R-TX) to be Permanent Representative of the United States of America to the Organization of American States. See, White House release.

6/7. The Bureau of Industry and Security (BIS), which regulates exports, published a notice in the Federal Register that announces, describes, recites, and sets the effective date (June 7, 2007) for, its changes to its rules regarding its formula for calculating computer adjusted peak performance in weighted teraFLOPS. The notice states that "This rule corrects the availability of the license exception for technology and software under restriction for specified ``software´´ and ``technology´´ for computers. These additional changes are intended to correct the scope of the license exception in certain Export Control Classification Numbers that were unintentionally narrowed by the rule published on March 22, 2007." See, Federal Register, June 7, 2007, Vol. 72, No. 109, at Pages 31450-31451.

6/1. The Copyright Office (CO) published a notice in the Federal Register stating that it is now accepting requests for participation in the beta test of the CO's online copyright registration system, eCO. This notice states that registration and deposit of works currently "is primarily a paper-based operation". It continues that a major objective of its business process reengineering (BPR) initiative is "to increase the availability of Copyright Office services online. This objective will be met through the introduction of an automated registration system, electronic Copyright Office (eCO), which is scheduled for release to the public later this year. Currently in the alpha testing phase of development, eCO will allow users to submit applications, deposits, and fees electronically through a portal on the Copyright Office Web site." See, Federal Register, June 1, 2007, Vol. 72, No. 105, at Pages 30641-30643. See also, CO web page titled "eCO Beta-Test Announcement".

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's weekly calendar [PDF].

The Senate will meet at 10:00 AM. It will resume consideration of S 1348, a bill related to immigration and other matters.

9:30 AM - 12:00 NOON. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will meet to prepare for ITU-T Study Group 16. See, notice in the Federal Register, February 12, 2007, Vol. 72, No. 28, at Pages 6640-6641. Location: Communications Technologies Inc, 14151 Newbrook Drive, Suite 400, Chantilly, VA.

8:30 AM - 5:00 PM. Day one of a two day meeting of the National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB). See, notice in the Federal Register, May 25, 2007, Vol. 72, No. 101, at Page 29304. Location: Room 308 (Parks Room), Cafritz Conference Center, George Washington University, 800 21st St., NW.

9:00 - 10:30 AM. The Information Technology and Innovation Foundation (ITIF) will host an panel discussion titled "The Gowers Review of Intellectual Property". See, notice. RSVP to Torey Liepa at 202-449-1351 or tliepa at itif dot org. Location: ITIF, 1250 I St., NW.

10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda includes consideration of Leslie Southwick to be a Judge of the U.S. Court of Appeals (5thCir) and Robert James Jonker to be a Judge of the U.S. District Court for the Western District of Michigan. See, notice. Location: Room 226, Dirksen Building.

CHANGE OF TOPIC AND SPEAKERS. 12:00 NOON - 2:00 PM. The Federal Communications Bar Association's (FCBA) Transactional Practice Committee will host a brown bag lunch titled "Investing Safely in Foreign Countries or How Not to Fall Afoul of the Federal Corrupt Practices Act". The speakers will be Tara Giunta (Paul Hastings), Aileen Pisciotta (Trans-World Telecom Caribbean), and Mel Schwechter (LeBoeuf Lamb). RSVP to Almira Kennedy at 202-418-1743 or Almira dot Kennedy at fcc dot gov. Location: Paul Hastings, 875 15th St., NW.

1:00 - 5:00 PM. The National Science Foundation's (NSF) Advisory Committee for Social, Behavioral and Economic Sciences will hold a meeting. The first topic on the agenda is "Science of Science and Innovation Policy". See, notice in the Federal Register, May 11, 2007, Vol. 72, No. 91, at Page 26850. Location: 4201 Wilson Blvd., Room 920, Arlington, VA.

2:00 PM. The House Judiciary Committee's (HJC) Subcommittee on the Constitution, Civil Rights, and Civil Liberties will hold a hearing titled "Constitutional Limitations on Domestic Surveillance". See, notice. Location: Room 2141, Rayburn Building.

2:00 PM. The House Oversight and Government Reform Committee's (HOGRC) Subcommittee on Information Policy, Census, and National Archives will hold a hearing titled "Federal IT Security: The Future for FISMA". Location: Room 2154, Rayburn Building.

2:00 PM. The U.S. Court of Appeals (FedCir) will hear en banc oral argument in In Re Seagate Technology, App. Ct. No. 2006-M830. Location: Courtroom 201. 

3:00 PM. The Department of Commerce's (DOC) President's Export Council (PEC) will meet. The deadline to register to attend is June 1, 2007. See, notice in the Federal Register: May 18, 2007, Vol. 72, No. 96, at Page 28030. Location: Room 628, Dirksen Building.

Day one of a two day conference titled "Broadband Policy Summit III". See, conference web site. Location: Ritz Carlton, Pentagon City, Arlington, VA.

8:00 - 9:15 AM. The Federal Communications Bar Association (FCBA) and the Northern Virginia Technology Council (NVTC) will jointly host a breakfast titled "Trends in Communications Technologies". The speaker will be Ed Thomas (Harris Wiltshire & Grannis). RSVP to Meghan Exley at 703-770-7807 or meghan dot exley at pillsburylaw dot com. Location: Pillsbury Winthrop Shaw Pittman, 1650 Tysons Blvd., McLean, VA.

8:30 AM - 5:00 PM. Day two of a two day meeting of the National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB). See, notice in the Federal Register, May 25, 2007, Vol. 72, No. 101, at Page 29304. Location: Room 308 (Parks Room), Cafritz Conference Center, George Washington University, 800 21st St., NW.

10:00 AM. The House Financial Services Committee (HFSC) will hold a hearing titled "Can Internet Gambling Be Effectively Regulated to Protect Consumers and the Payments System?" Rep. Barney Frank (D-MA), the Chairman of the HFSC, is the sponsor of HR 2046 [LOC | WW], the "Internet Gambling Regulation and Enforcement Act of 2007". See, story titled "Rep. Frank Introduces Bill to Facilitate Licensed Internet Gambling" in TLJ Daily E-Mail Alert No. 1,574, May 3, 2007. The witnesses will be Radley Balko (Reason Magazine), Jon Prideaux (Asterion Payments), Gerald Kitchen (SecureTrading Ltd.), Greg Hogan Sr., Jeff Schmidt (Authis). See, notice. The hearing will be webcast by the HFSC. Location: Room 2128, Rayburn Building.

Day two of a two day conference titled "Broadband Policy Summit III". See, conference web site. Location: Ritz Carlton, Pentagon City, Arlington, VA.

1:00 PM. The Fiber to the Home Council (FTTH) will host a web seminar titled "Presenting on Next-Generation: FTTH Architectures and Enabling Technologies". See, notice, with registration and call in information.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding installation of smaller antennas by Fixed Service (FS) operators. This NPRM is FCC 07-38 in WT Docket No. 07-54. See, notice in the Federal Register, April 25, 2007, Vol. 72, No. 79, at Pages 20494-20499.

10:00 AM. The Senate Finance Committee (SFC) will hold a hearing titled "Trade Enforcement for a 21st Century Economy". The witnesses will be Dan Glickman (Motion Picture Association of America), Jennifer Hillman (Georgetown Law School), Robert Lighthizer (Skadden Arps Meagher & Flom), and Erik Autor (National Retail Federation). See, notice. Location: Room 215, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Universal Service Fund: Assessing the Recommendations of the Federal-State Joint Board". See, notice. Location: Room 253, Russell Building.

10:00 AM - 12:00 NOON. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will meet regarding U.S. positions for a meeting of the Organization of American States Inter American Telecommunication Commission (CITEL) Permanent Consultative Committee II (Radiocommunication) which will prepare for the International Telecommunication Union World Radiocommunication Conference (WRC07). See, notice in the Federal Register, May 30, 2007, Vol. 72, No. 103, at Page 30045. Location: undisclosed.

2:30 PM. The Senate Commerce Committee's (SCC) Subcommittee on Interstate Commerce, Trade, and Tourism will hold a hearing titled "U.S. Trade Relations with China". See, notice. Location: Room 256, Russell Building.

2:30 PM. The Senate Homeland Security and Governmental Affairs Committee's Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia will hold a hearing titled "Assessing Telework Policies and Initiatives in the Federal Government". See, notice. Location: __.

6:00 - 8:15 PM. The Federal Communications Bar Association's (FCBA) State and Local Practice Committee will host a continuing legal education (CLE) seminar titled "State Legislative Update". The price to attend ranges from $50 to $125. See, registration form [PDF]. Registrations are due by 5:00 PM on June 8. Location: undisclosed.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its request for comments regarding Google's proposals regarding service rules for the 700 MHz band. The FCC states that "Google requests that the Commission clarify the service rules governing the 700 MHz bands and declare that the rules allow the use of ``dynamic auction mechanisms´´ such as real-time auctions and per-device registration fees. Google also requests that the Commission posit at least whether it would be in the public interest to mandate the use of such mechanisms for some, or even all, of the commercial spectrum to be auctioned in the 700 MHz bands. The document also seeks comment on Google's proposal that the unpaired 6 megahertz E Block (722-728 MHz) in the current Lower 700 MHz band plan should be designated primarily or exclusively to be used for deployment of broadband communications platforms.". This item is DA 07-2197 in WT Docket No. 06-150, WT Docket No. 06-169, PS Docket No. 06-229, and WT Docket No. 96-86. See, notice in the Federal Register, May 30, 2007, Vol. 72, No. 103, at Pages 29930-29933.

8:30 AM - 4:00 PM. Day one of a two day hearing of the U.S.-China Economic and Security Review Commission. This hearing will focus on the consequences of China's energy consumption. See, notice in the Federal Register: May 23, 2007, Vol. 72, No. 99, at Page 29042. Location: Room 385, Russell Building, Capitol Hill.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "The 700 MHz Auction: Public Safety and Competition". See, notice. Location: Room 253, Russell Building.

2:00 - 3:00 PM. The President's National Security Telecommunications Advisory Committee (NSTAC) will meet by teleconference. See, notice in the Federal Register, December 29, 2006, Vol. 71, No. 250, at Page 78451.

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