NIPC Advisory. 5/5. The FBI's National Infrastructure Protection Center (NIPC)
released an advisory
regarding potential DDoS attacks. It stated that "The NIPC has received
reliable information indicating ongoing attempts to disrupt web access to
several sites. The activity has been seen from several networks, and consists
entirely of fragmented large UDP packets directed at port 80. Analysis indicates
that this activity may be intended to bypass standard port/protocol blocking
techniques, as certain major routing equipment manufacturer's products will
block the first fragment of a large UDP packet, but may not block subsequent
packets, thereby permitting the denial of service to continue."
Trade and E-Commerce. 5/5. Igor Abramov,
Special Advisor to the U.S. Department of Commerce, gave a speech
in Baku, Azerbaijan, regarding the importance of the rule of law. He stated that
"Electronic commerce, for example, spans continents to create larger and
more dynamic markets, making geographic and territorial boundaries almost
irrelevant. This means that businesses can no longer afford to rely only on
personal relations. Today, they must also be able to call on rule-based
institutions for assurance that partners will employ proper business practices
or, when necessary, that they have recourse to effective mechanisms for
resolving commercial disputes."
5/4. Sen. Robert Byrd (D-WV), a leading
protectionist in the Senate, gave an address in the Senate on trade and fast
track trade negotiating authority. He stated that "The administration wants
fast track. The administration says it needs this deviation from the traditional
prerogatives of Congress in order to negotiate multilateral trade agreements.
... Under the Constitution, which I hold in my hand, Congress has this
responsibility. We ought to read it. ... we don't need fast track. We need to
live by this Constitution which I hold in my hand."
5/4. The GAO released
a report [PDF] titled
"Financial Privacy: Too Soon to Assess the Privacy Provisions in the Gramm-
Leach- Bliley Act of 1999." The report, which was mandated by the Act,
concluded that "As of March 31, 2001, federal regulatory and enforcement
agencies had not taken any enforcement actions or prosecuted any cases under
this law. FTC staff have begun to monitor firms' compliance with the statute's
provisions and have several pending nonpublic investigations. However, FTC staff
and Department of Justice officials told us that until they have fully
prosecuted cases under the statute, they would lack the necessary experience to
assess the effectiveness of Subtitle B provisions. The federal financial
regulatory agencies are still in the process of taking steps to ensure that the
financial institutions that they regulate have reasonable controls to protect
against fraudulent access to financial information. ... Lastly, we found that
there are limited data available to indicate the impact of Subtitle B on the
prevalence of fraudulent access to financial information."
5/4. The U.S. District Court (EDVa) dismissed Rambus' claims for patent infringement against
Infineon involving SDRAM and DDR SDRAM
technology. Rambus stated that it will appeal. See, Rambus
release.
5/4. The FCC published a summary
in the Federal Register of its Second
Order on Reconsideration [PDF] in its CALEA proceeding
(CC Docket No. 97-213). It adopted this order on April 9, 2001, and released it
on April 16, 2001. See, story in TLJ Daily E-Mail Alert
of April 17, 2001. The FCC rejected two FBI petitions for reconsideration
which asked the FCC to impose further "personnel security obligations"
upon carriers, and to require carriers to generate an automated message that
would permit LEAs "to confirm periodically that the software used to
conduct an interception is working correctly and is accessing the equipment,
facilities, or services of the correct subscriber." However, the FCC did
make minor revisions to §§ 64.2103 and 64.2104 of its rules to clarify the
arrangements telecommunications carriers subject to CALEA must make to ensure
that LEAs can contact them when necessary, and the interception activity that
triggers a record keeping requirement. The new rules go into effect on June 4,
2001.
TRIPS, Software and E-Commerce. 5/4. The Business Software Alliance (BSA) wrote a letter
to USTR
Robert Zoellick identifying several trade issues that affect software companies.
The letter states that "Software piracy continues to be a serious problem.
Many WTO members have yet to fully implement their TRIPs obligations; and too
many others are not taking effective enforcement actions." The letter also
states that "Tariffs on computers and peripherals are still very high in
some countries, creating a substantial impediment to U.S. exports of information
technology equipment." Finally, the letter addresses two e-commerce issues.
First, it addresses "the classification for trade purposes of downloaded
products. Since software can be downloaded (as a good) or delivered by an ASP
(as a service), software provided via the Internet can be either as a good or a
service, depending on the business model. It is our firmly held view that
software and other products acquired through networks by means of a download,
should be treated as a good for classification purposes, and subject to the same
trade rules as like products acquired through more traditional means."
Also, the letter states that there is "the need to update our trade
agreements to reflect the array of new Internet-related products and services
that have evolved over the past 10 years since the conclusion of the Uruguay
Round."
5/3. Rep. Ralph Hall (D-TX)
introduced HR 1693, which is described in the Congressional Record as a
"bill to improve science, mathematics, and technology education in
elementary and secondary schools, advance knowledge on the effective uses of
information technologies in education, increase participation in science,
mathematics, and engineering careers by groups underrepresented in those fields,
provide for more effective coordination of public and private sector efforts to
improve science, mathematics, and technology education, and for other
purposes." It was referred to the House
Science Committee, and the House Education and Workforce Committee.
5/3. Rep. Howard Berman (D-CA) and Rep. Dana Rohrabacher (R-CA)
introduced HR
1707, a bill to give the Commerce Department jurisdiction over exports of
commercial satellites. The State Department currently has this authority.
The bill was referred to the House International Relations Committee and House
Armed Services Committee. See, Berman release.
5/3. Rep. Chris Cannon (R-UT) and Rep. John Conyers (D-MI) introduced the
American
Broadband Competition Act of 2001, another bill in the debate over incenting
the deployment of broadband services. Its content contrasts sharply with another
bill, HR 1542, the
Internet Freedom and Broadband Deployment Act of 2001, sponsored by Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI). See also, statement by
Rep. Cannon.
Overturn Goldwasser. The Cannon Conyers bill would amend the Clayton Act to
provide that a violation of the Communications Act can constitute a violation of
antitrust law. The bill provides that "the court shall not dismiss such
claim on the ground that the defendant's conduct was or is subject to the
Communications Act of 1934 ..." It also provides that the trial court
"may consider any conduct that violates any obligations or requirements
imposed by the Communications Act of 1934 ... in determining whether the
defendant has engaged in anticompetitive or exclusionary conduct." The bill
thus addresses the July 25, 2000, opinion of the U.S. Court of Appeals (7thCir)
in Goldwasser v. Ameritech.
Fast Arbitration of Interconnection Disputes. The bill would also require
the Justice Department to establish an alternative dispute resolution process
for the arbitration of disputes related to an interconnection agreement with an
incumbent local exchange carrier (ILEC), such as Verizon, BellSouth and SBC. In
this arbitration process, disputes must be arbitrated within 45 days, the
Commercial Dispute Resolution Procedures of the American Arbitration Association
would apply, discovery would be available, and decisions would be enforceable in
federal court.
No Joint Marketing of DSL by Bells. The bill would also amend the Clayton
Act to provide that an ILEC "and all affiliates of such carrier may not
jointly market in such State any advanced telecommunications service with any
other telecommunications or information services offered by such carrier or by
any of such affiliates."
Commerce v. Judiciary. The Cannon Conyers bill would benefit competitive
local exchange carriers (CLECs), while the Tauzin Dingell bill would benefit
ILECs. In addition to the conflict between constituencies, there is a conflict
between two committees, both of which seek authority over legislation affecting
the Internet. Both Cannon and Conyers are members of the House Judiciary Committee. Their bill
would amend antitrust law, which falls within the jurisdiction of their
Judiciary Committee. Tauzin and Dingell are the Chairman and ranking Democrat of
the House Commerce Committee. Their
bill would amend communications law, which falls within the jurisdiction of
their Commerce Committee. In addition, Judiciary Committee Chairman James Sensenbrenner (R-WI) has
also asserted jurisdiction over the Tauzin Dingell bill.
Reaction. The USTA, whose membership includes
ILECs, issued a release
condemning the Cannon Conyers bill. USTA President Gary Lytle said that "HR
1542 is the best vehicle for spurring broadband deployment." The main
provision of HR 1542 would exempt interLATA data traffic from the
requirements of Section 271
ot the Telecom Act of 1996, which requires the Bells to open up their facilities
to competitors before they are allowed to provided interLATA (or long distance)
services. In contrast, the Consumers Union
(CU) and Consumer Federation of America
praised the Cannon Conyers bill. "By attempting to streamline dispute
resolution and increase penalties for failure to comply with network opening
requirements, this legislation offers consumers a much better chance of seeing
local markets open to competition than either the Tauzin-Dingell bill or the
status quo," said the CU's Gene Kimmelman. "We are concerned that the
Tauzin Dingell bill would have exactly the opposite effect of its professed aim.
Due to the economic slowdown, many of those who were the real innovators for
Internet services and local phone competition are faltering. Tauzin-Dingell
would hobble those innovators by giving the monopoly Bell companies further
advantage over their potential competitors."
5/3. The U.S.
Court of Appeals (5thCir) issued its opinion
in COMSAT
v. FCC, a petition for review of the Sixteenth Order
on Reconsideration in Federal-State Joint Board on Universal Service,
CC Docket No. 96-45. The Appeals Court ruled that the FCC's order permitting the Incumbent Local
Exchange Carriers to recoup universal services costs through access charges is
contrary to the plain language of §
254(e). It reversed and remanded.
5/3. Sen. Max Baucus (D-MT), the ranking
Democrat on the Senate Finance Committee, and a leading free trade advocate,
gave an address in the Senate on trade. He stated that "despite a strong
feeling in the Congress that we need to continue the aggressive pursuit of trade
liberalization and market opening around the world, we have made no progress at
all this year." He said that progress is being held up by the dispute over
how to deal with environmental labor standards in trade agreements, and
specifically, with the U.S. Jordan Free Trade Agreement. He concluded: "We
need to delink Jordan from the rest of our trade agenda."
5/3. The Senate Commerce Committee
approved several nominations, including Brenda Becker to be Assistant
Secretary of Commerce, and Theodore Kassinger to be General Counsel of
the Department of Commerce. See, release.
5/3. The Senate Judiciary Committee
held its Thursday executive business meeting. The agenda included votes on the
nominations of Ted Olson to be Solicitor General, and Larry Thompson
to be Deputy Attorney General. The votes were held over, at least until next
week. The reason for the delay was an unrelated ongoing dispute between
Democrats and Committee Chairman Orrin Hatch
(R-UT) over procedure for Senate confirmation of judges. Other matters ripe for
consideration by the Committee include the nominations of Charles James
to be an Assistant Attorney General in charge of the Antitrust Division and Daniel Bryant
to be an Assistant Attorney General in charge of the Office of Legislative
Affairs.
5/3. The FCC published a notice
in the Federal Register that it has made minor technical corrections to it rule
implementing the Children's
Internet Protection Act [PDF]. See, Federal Register, May 3, 2001, Vol. 66,
No. 86, at Pages 22133. The FCC published its original
rule at Federal Register, April 16, 2001, Vol. 66, No. 73, Pages 19394 -
19398.
5/3. The U.S. Copyright Office
published a Notice
of Proposed Rulemaking (NPRM) in the Federal Register regarding proposed
amendments to its regulation governing notices of termination of transfers and
licenses covering the extended renewal term. The current regulation is limited
to notices of terminations made under section 304(c) of the copyright law. The Sonny Bono
Copyright Term Extension Act created a separate termination right under
section 304(d). Under the proposed regulation, procedures governing notices of
termination of the extended renewal term would cover notices made under either
section 304(c) or 304(d). Comments are due by June 18, 2001. See, Federal
Register, May 3, 2001, Vol. 66, No. 86, at Pages 22139 - 22140. See also, PDF copy in CO
web site.
5/3. The Treasury Department's Committee
on Foreign Investment in the United States approved ASM Lithography Holding
NV's acquisition of Silicon Valley Group. ASM
is a Dutch company. SVG is Intel's primary
supplier of automated wafer processing equipment for making semiconductors. See,
SVG release.
5/3. The SEC launched of a web-based survey that asks
investors to provide information about how they use electronic media, including
the Internet, to make investment decisions. See, SEC release.
5/3. The Consumer Electronics Association (CEA)
submitted another comment
[PDF] to the FCC regarding the compatibility
between digital cable systems and consumer electronic products. See also, CEA release.
PP Docket No. 00-67.
5/3. The U.S. Attorney (DNJ)
charged two individuals and one company by criminal complaint with conspiracy to
commit wire fraud. The complaint alleges that Hai Lin and Kai Ku, citizens of
the People's Republic of China, while working at Lucent, conspired to steal source code and
software associated with an Internet server developed by Lucent, and to transfer
the stolen technology to a company owned by the PRC. The FBI also arrested Lin
and Ku, and a third individual, and executed search warrants at their homes. The
complaint also charged ComTriad Technologies, Inc., a New Jersey corporation
founded by Lin and Ku. The U.S. Atty also stated that "It is expected that
the matter will be presented to a grand jury." See, release.
5/3. May 3 was the deadline to submit comments to the NTIA
regarding "the advantages accorded signatories of the INTELSAT,
in terms of immunities, market access, or otherwise, in the countries or regions
served by INTELSAT, the reason for such advantages, and an assessment of
progress toward fulfilling a pro- competitive privatization of that
organization." The NTIA published copies of comments which it received in
its web site.
PanAmSat submitted a comment in which it
stated that it and other private satellite operators face market entry barriers.
Motient, which operates a mobile satellite
service (MSS) system in L-band, stated that Inmarsat has not complied with
ORBIT Act.
In contrast, INTELSAT stated that its "privatization process continues
apace" and "in a manner consistent with the ORBIT Act." Lockheed Martin stated that
International Satellite Organizations (ISOs) have no competitive advantages that
negatively impact the satellite market. See, comments of ITSO, Lockheed Martin,
Motient
Services, and PanAmSat.
See also, copy
of notice requesting comments.
5/3. The USTR announced several staff
appointments. Naotaka Matsukata will be Special Assistant for Policy
Planning. He previously was on the staff of Sen. Joe Lieberman (D-CT). Dayna Cade
will be a Deputy Assistant USTR for Congressional Affairs. She previously worked
on the Bush Cheney campaign. Before that she was the Director of Government
Affairs for the Airports Council International (ACI). Matt Niemeyer will
be a Deputy Assistant USTR for Congressional Affairs. He was previously the
Deputy Political Director for the American Israel Public Affairs Committee.
Prior to that he worked for the Independent Insurance Agents of America, for
former Rep. Gerald Solomon (R-NY), and for Sen.
John McCain (R-AZ). Heather Wingate will be an Assistant USTR for
Intergovernmental Affairs and Public Liaison. She was previously Chief of Staff
to Sen. Sam Brownback (R-KS). Before
that she worked for the NRA. Richard Mills will be Press Secretary. He
was previously Communications Director for House Rules Committee Chairman David Dreier (R-CA). Before that he
worked as Press Secretary to the Senate Banking Committee. See release.
5/3. Eric Holder will join the Washington DC law firm of Covington & Burling as a partner. He
previously was the Deputy Attorney General. He will handle complex civil and
criminal cases, domestic and international advisory matters, and internal
corporate investigations. See, CB release.
5/3. A grand jury of the U.S. District Court (DConn) returned a
superseding indictment against Aleksey Ivanov charging him with conspiring to
make unauthorized intrusions into computer systems owned by companies in the
U.S., transmitting threats to damage those computer systems, extortion, and
stealing credit card numbers and merchant account numbers. Ivanov, of
Chelyabinsk, Russia, was arrested in the U.S. last year while traveling to met
with an undercover company established by the FBI. See, release.
5/2. The Senate Judiciary Committee
held a hearing on the nomination of Charles James to be an Assistant
Attorney General. If confirmed by the Senate, he will oversee the Antitrust Division of the Department of
Justice (DOJ). He will have major responsibility for determining whether or how
to proceed with the government's antitrust case against Microsoft. He cruised
through the hearing with no opposition, no criticism, and almost no questions
relevant to the Microsoft case. He revealed little about how he would proceed.
James was introduced and praised by Sen.
George Allen (R-VA) and Sen. John Warner
(R-VA). Sen. Orrin Hatch (R-UT), the
Chairman of the Committee, called James "one of the most qualified people
for this job." He added that "you appear to be well on your way to
being confirmed." Hatch said that "I intend to put you on our markup
for tomorrow," but any member could hold the matter over until next week.
Sen. Maria Cantwell (D-WA), the newly
elected Senator from Microsoft's home state of Washington, asked James about
antitrust issues involving apples -- the fruit, not the computers. She expressed
her concern about concentration in the apple processing market. Similarly, Sen. Charles Grassley (R-IA) devoted all
of his questions to the impact of antitrust on rural communities. He too is
concerned about increased agribusiness concentration.
Sen. Pat Leahy (D-VT), the ranking
Democrat on the Committee, asked James not to involve himself in any matters
affecting his former clients at the law firm of Jones Day. He also asked James not to seek
recusal waivers.
Sen. Arlen Specter (R-PA) asked James a
thinly veiled question about how he will proceed in the Microsoft case. Specter
asked James for his "views regarding the continuity of the
Department." James gave a rambling and vague response that left observers
scratching their heads and comparing their notes. "Well, Senator Specter,
it is certainly my perspective that, whenever the Department begins a
litigation, commences, if there is at some juncture of the case, an adverse
ruling, the appropriate thing for the Department to do, and that is, is to
evaluate the nature of the ruling, and evaluate (inaudible word) the procedural
posture is, and determine whether there are appropriate issues that can be
carried forward legitimately to an appeal, and certainly, with the, my
expectation, is (inaudible) to follow that procedure in the future." Then
James concluded, "We will look as closely as possible to preserving
victories, and rectifying defeats."
Sen. Hatch also addressed antitrust and high tech generally. He asked,
"Should the antitrust laws be applied to the high tech industry?"
James responded, "Absolutely." Hatch also referenced "network
effects" and asked, "Do you think monopoly is more likely to occur in
high tech industries than in other industries? And if so, what are the
implications of your conclusions for antitrust enforcement." James
addressed network effects, and added that he hopes to publish "some clear
statements of policy" -- in the future.
5/2. Peter
Tenhula, Senior Legal Advisor to FCC
Chairman Michael Powell, spoke at luncheon hosted by the Federal Communications Bar Association's
Telecommunications Competition Issues Committee. He discussed Chairman Powell's
approach to merger reviews and the public interest standard. "You
will see less competitive analysis that is duplicative of the antitrust
authorities," said Tenhula. "We are not going to spend a lot of time
negotiating conditions. We have got better things to do." However, he added
that while Powell may not have supported imposing certain conditions in previous
merger reviews, "he is going to enforce them."
Tenhula also stated that Powell has said that the public interest standard is
"an empty vessel." But, "that is not to say that the pendulum is
going to swing back. We have got to live with our precedents."
Nevertheless, he stated that "it is going to be more limited" and
"we are not going to legislate through mergers." Tenhula spoke to, and
answered questions from, a group of lawyers who work for law firms, trade
groups, the FCC, and the DOJ's Antitrust Division.
5/2. The Senate Judiciary Committee's
Antitrust, Business Rights, and Competition Subcommittee held a hearing titled The
Telecom Act Five Years Later: Is it Promoting Competition? Sen. Mike DeWine (R-OH) and Sen. Herb Kohl (D-WI), the Chairman and
ranking Democrat on the Subcommittee conducted the hearing. Both Senators
suggested that it might be time to revisit the Telecom Act of 1996. "We've
been waiting for local phone competition for five years, and we are still being
kept on hold," said Sen. Kohl. "The biggest lesson seems to be this:
Congress can't mandate competition, and if competition doesn't make sense, laws
like the Telecom Act won't really work." He concluded: "maybe we need
to tinker with the Act a little more. We need to ask whether the Act needs more
enforcement authority -- through antitrust laws or by the FCC -- and we also
should ask whether we need to give the Regional Bells more of an incentive to
open up their networks."
However, witnesses praised the competitive and deregulatory provisions of the
1996 Act, and urged Congress to give it more time. Pat Wood, Chairman of the
Texas Public Utilities Commission, stated that "the Act can work," and
discussed his State of Texas as an example. See, Wood's prepared testimony.
"We did the right thing in 1996. Stick with it," said former FCC
Chairman Reed Hundt. See, Hundt's prepared
testimony. See also, prepared statements of other witnesses: David Dorman
(AT&T), James
Robbins (Cox Communications), Larissa Herda (Time
Warner Telecom), and James
Ellis (SBC).
Reed Hundt also commented to reporters afterwards regarding HR 1542, the Internet
Freedom and Broadband Deployment Act of 2001, sponsored by Rep. Billy Tauzin
(R-LA) and Rep. John Dingell (D-MI). He said that "a lot of people on the
Senate side think the bill is a solution in search of a problem." He also
added that even if it were passed, "it may not happen soon enough to matter
to the businesses."
5/2. Anthony Wayne, Assistant Secretary of State For Economic and
Business Affairs, gave a speech
in Brussels, Belgium, to the Transatlantic Consumer Dialogue (TACD) Opening
Plenary. He touched on e-commerce disputes. "The third issue is e-commerce
codes of conduct, including Alternative Dispute Resolution. I know this is a top
priority for Commissioner Byrne and DG SANCO. The U.S. Federal Trade Commission
and Department of Commerce have sponsored a number of workshops on the issue.
There are a number of interesting models for alternative dispute resolution. I
understand that TACD NGOs have met with the Global Electronic Business Dialogue
(GBDE) to discuss ADR and other e-commerce issues. Already, we can see the
potential benefits of collaboration."
5/2. The House Judiciary Committee's
Subcommittee on the Courts, the Internet, and Intellectual Property held an
oversight hearing on the U.S.
Copyright Office. Rep. Howard
Coble (R-NC), the Chairman of the Subcommittee presided. Rep. Howard Berman (D-CA), the ranking
Democrat, and Rep. Tammy Baldwin
(D-WI), a new member of the Subcommittee, also participated. Marybeth Peters,
the Register of Copyrights, was the sole witness. See, Peters' prepared testimony.
Rep. Baldwin asked Peters for an update on distance learning issues. On
March 7, Sen. Orrin Hatch (R-UT) and Sen. Pat Leahy (D-VT) introduced S 487, the
Technology, Education and Copyright Harmonization (TEACH) Act. On March 13, the Senate Judiciary Committee held a
hearing on bill; Peters provided testimony. The
bill would amend §§ 110(2)
and 112 of the
Copyright Act to extend the distance learning exemptions enacted in 1976 to
digital delivery media. The TEACH Act incorporates many of the recommendations made by the
Copyright Office in 1999 in a study mandated by the the DMCA. Under current
law, there are exemptions for "face-to-face" and
"transmission" teaching activities; but Internet based education is
not referenced. Peters told Baldwin that there are some differences between the
two sides -- the education community and copyright owners. Peters said that
talks began last week to work out their differences, and "hopefully they
will be able to reach an agreement, and that will form the basis of the
bill."
Rep. Coble questioned Peters regarding the Copyright Office's Section 104
proceeding. This section of the Digital Millennium
Copyright Act [PDF] directs the Copyright Office and the NTIA to prepare a
report for the Congress examining the effects of the amendments made by Title 1
of the DMCA and the development of electronic commerce on the operation of §§
109 and 117, and the relationship between existing and emerging technology and
the operation of these sections. Peters stated that the 104 report would be
completed, "hopefully in the month of May." See also, Copyright
Office web page on 104.
5/2. The Senate Appropriations
Committee's Legislative Branch Subcommittee held a hearing on proposed
budget estimates for FY 2001 for the Library of Congress, Joint Economic
Committee, Joint Tax Committee, and the Congressional Research Service. The
Librarian of Congress, James Billington, submitted prepared
testimony on the Library of Congress, including its Copyright Office. He stated that the
"The Library requests a decrease in the Copyright Office's Offsetting
Collections Authority -- from $23,500,000 to $21,880,000. The $1,620,000
decrease in Offsetting Collections Authority is based on projected annual
registration receipts of $21,500,000 and the use of $380,000 from the Copyright
Office no-year account."
Billington's testimony also addressed DMCA proceedings.
"The DCMA requires the Copyright Office to conduct a rulemaking every three
years on exemptions that permit circumvention of technological access control
measures in order to engage in noninfringing uses of copyrighted works. Two
relatively narrow exemptions were granted on October 28, 2000, but at the
conclusion of this process of conducting the rulemaking, I expressed several
concerns that might warrant congressional consideration. The rapid changes in
technology may require the rulemaking process to be conducted at intervals
shorter than the triennial review enacted under the DMCA. In addition, I ask
that the Congress address the further refinement of the appropriate criteria for
assessing the harm to noninfringing uses in scholarly, academic, and library
communities as well as guidance on the precise scope of the term "class of
works."
5/2. Rep. Howard Coble (R-NC) stated at the oversight hearing for the Copyright
Office that he is opposed to the diversion of USPTO
user fees to fund other government programs. "I spoke with the President
about it, in fact, ten days ago. I don't mean to be -- you never know who is
listening to you -- I don't mean to put the President on the spot. But, he
seemed to be very understanding. And he seemed to share my concern. I don't want
to that in the Post tomorrow that I am quoting the President as defending it.
But, he said, "This doesn't seem right." And it doesn't seem right.
Well, these exclusively, exclusive user fees, that all of a sudden become fair
game for everybody who wants to appropriate here, there, and yonder."
TLJ asked Rep. Coble after the hearing about the next head of the USPTO. He
stated that he was aware of reports that it would be former Rep. James Rogan
(R-CA). He stated that "I would be very comfortable with him at the
helm." Rogan was a member of the Courts and Intellectual Property
Subcommittee until he lost his bid for re-election last November.
5/2. House Majority Leader Dick Armey
(R-TX) wrote a letter to
HHS Secretary Tommy Thompson regarding medical privacy regulations. He
stated that "Now that the President has decided to finalize the medical
privacy regulation under the Health Insurance Portability and Accountability Act
(HIPAA), I write to suggest specific changes to that controversial regulation,
in hopes you will use your authority to strengthen rather than endanger the
medical privacy of all Americans." Specifically, Armey suggested that
"We demand federal agents obtain a search warrant before going through our
... medical records."
5/2. The CDT, EPIC, ACLU, Free Congress Foundation, and other
groups wrote a letter
to Attorney General John Ashcroft regarding three privacy issues: Carnivore,
electronic surveillance by law enforcement, and medical records.
The letter stated that "The FBI's current use of the Carnivore system ...
threatens the privacy of electronic communications and cannot be squared with
the Fourth Amendment, the Electronic Communications Privacy Act, or the Foreign
Intelligence Surveillance Act." The letter also stated that "The
Electronic Communications Privacy Act of 1986 and the other surveillance
statutes should be updated". Finally, the letter stated that the HHS
Department regulation implementing HIPAA "does not meaningfully limit law
enforcement access to sensitive medical information."
5/2. Sen. Charles Grassley (R-IA) and Sen. Max Baucus (D-MT) sent a letter to the
Congressional Budget Office (CBO) asking for
economic data on how consumers, state and local governments and Internet
businesses would fare under additional Internet sales taxes. See, release and letter.
5/2. The National Academies' Computer Science & Telecommunications Board and
the FCC's Office of Engineering and Technology
hosted a tutorial titled Internet's Coming of Age.
5/2. The House Science Committee's
Subcommittee on Research held a hearing titled Improving Math and Science
Education so that No Child is Left Behind.
5/2. The FBI's National Infrastructure Protection
Center (NIPC) issued an advisory
regarding a buffer overflow vulnerability in Microsoft's Internet Information
Services 5.0. The advisory stated that "the threat level of the above
vulnerability is high." See also, Microsoft's Security
Bulletin MS01-023.
5/2. The U.S.
Court of Appeals (FedCir) issued its opinion in Oak
Technology v. ITC, an appeal of a Section 337 determination by the U.S. International Trade Commission pertaining
to the importation of CD-ROM drive controllers. The ITC instituted an
investigation of MediaTek, United Microelectronics, Lite-On Technology, and
AOpen at the request of Oak Technology.
Oak asserted that MediaTek and the others imported articles into the U.S. in
violation of Oak's U.S.
Patent No. 5,581,715. The ITC ruled, pursuant to Section 337, that the
'715 patent was not infringed by MediaTek and the others. The Court of Appeals
affirmed.
5/2. The Washington DC based law firm of Wiley
Rein & Fielding opened its office in McLean, Virginia. See, release. The
office will be run by Michael Senkowski
and Rand Allen,
head of the firm's Telecommunications and Government Contracts practice groups,
respectively. Partners Greg Cirillo and Dan Hassett, whose
practices involve representing technology companies, will also work out of this
office.
5/2. Tim Simeone joined the Washington DC law firm of Harris Wiltshire & Grannis as an
associate. Simeone taught courses titled "Computer Law" and "The
First Amendment in Cyberspace" last year at Villanova University Law
School. Before that he was a legal consultant to the Antitrust Division of the Department of
Justice in connection with the Microsoft litigation. He also clerked for Justice
David Souter. See, HWG release.
5/2. The Senate confirmed Brenda Becker to be Assistant Secretary of
Commerce and Theodore Kassinger to be General Counsel of the Department
of Commerce.
5/1. Sen. Joe Lieberman (D-CT), Sen. Conrad Burns (R-MT), and Sen. Pat Leahy (D-VT) introduced a bill in
the Senate titled the E-Government
Act of 2001 [94 pages in PDF]. Sen. Lieberman stated that "What our
bill tries to do is put information technology to work to overcome arbitrary or
jurisdictional boundaries so that we can provide the public with seamless,
secure online services. We focus on delivering services and information to the
citizen, organized according to the citizen’s needs. To do this, we will need
leadership and coordination between agency decision-makers. We are calling for a
Federal Chief Information Officer, to be located in the Office of Management and
Budget ..." See Lieberman's statement
and summary
of the bill.
Ari Schwartz of the Center for Democracy and
Technology praised the bill. He stated that "this is the first bill
ever to comprehensively require the federal government to use the Internet to
serve citizens." Robert Atkinson, VP of the Progressive Policy Institute, a Democratic
think tank, also commended the bill: "The E-government Act of 2001 will
enable the federal government to make a quantum leap toward an electronic,
customer-centric government of the 21st century." See, PPI release.
Microsoft also praised the bill. See, release.
5/1. HR
1542, the Internet Freedom and Broadband Deployment Act of 2001, sponsored
by Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), has not
proceeded to markup by the full House
Commerce Committee. Last week, on short notice, the Commerce Committee held
a hearing on the bill, and its Telecom Subcommittee marked up the bill.
Subcommittee Chairman Fred Upton
(R-MI) stated at the mark up session that the full committee markup would take
place on Wednesday, May 2.
Rep. James Sensenbrenner
(R-WI), Chairman of the House
Judiciary Committee, wrote a letter to House Speaker Denny Hastert (R-IL) asserting that the
Judiciary Committee also has jurisdiction over HR 1542, on the basis that it
deals with the regulation of monopoly power, a subject which lies within his
Committee's jurisdiction. Also, Rep.
John Conyers (D-MI), ranking Democrat on the House Judiciary Committee, and Rep. Chris Cannon (R-UT), another member
of the Committee, announced that they plan to introduce a bill on the same
topic.
Meanwhile, the Senate Judiciary
Committee's Antitrust, Business Rights, and Competition Subcommittee has
scheduled a hearing on the implementation of the Telecommunications Act and its
impact on competition for Wednesday, May 2, at 2:00 PM. Sen. Mike DeWine (R-OH) and Sen. Herb Kohl (D-WI) are the Chairman and
ranking Democrat.
The House Commerce Committee released a copy of an April 25 letter
from Robert Sachs, P/CEO of the NCTA, to Rep.
Billy Tauzin (R-LA) and other members of the House Commerce Committee, stating
that his group does not oppose HR 1542. However, the NCTA, which represents the
cable industry, "would strongly oppose efforts to classify cable Internet
services as telecommunications services or otherwise extend common carrier-like
regulation, including mandatory access requirements, to cable Internet services
and facilities."
5/1. Rep. Mark Green (R-WI)
introduced HR 1655, a bill to amend Title 18 to punish the placing of sezual
explicit photographs on the Internet without the permission of the persons
photographed. The bill was referred to the House Judiciary Committee.
5/1. The U.S. Court of Appeals (2ndCir) heard oral argument in Universal Studios v.
Remeirdes, a case involving DeCSS and the DMCA. This is an
appeal of the Final
Judgment of the U.S. District Court (SDNY), Judge Lewis Kaplan
presiding, enjoining the publication on web sites of any computer program that
may be used to decrypt or unscramble the contents of digital versatile discs (DVDs)
that are protected by the Contents Scramble System (CSS). The District Court Opinion [98 pages
in PDF] applied the Digital Millennium Copyright Act (DMCA). The appellants
argue that the DMCA, as applied to computer code, violates the First Amendment.
5/1. Sidney Blumenthal, a former Clinton aide, and Matt Drudge, an Internet journalist,
settled the lawsuit, Blumenthal
v. Drudge and AOL, which has been languishing with little action
for years in the U.S. District Court (DDC).
Under the terms of the settlement, Blumenthal will pay $2,500 to Drudge.
Blumenthal and his wife sued Drudge alleging defamation for a story that
Drudge published about Blumenthal which quoted an anonymous source as saying
that Blumenthal had abused his wife. Drudge also issued a retraction.
The Blumenthals demanded $30,000,001.00 in damages on each of 21 counts.
Blumenthal also named AOL as a defendant, alleging that it was liable for
Drudge's alleged defamation, because Drudge also published his story on AOL. AOL
was dismissed from the suit in 1998, pursuant to Section 230
of the Telecom Act of 1996 , which bars claims against "interactive
computer services" for "information provided by another content
provider". Judge Friedman's opinion is
one of the leading precedents on the immunity of interactive computer services.
Blumenthal did not appeal the dismissal of AOL. See also, TLJ case
summary.
5/1. The Senate Finance Committee
unanimously approved several nominations, including Kenneth Dam to be
Deputy Secretary of the Treasury, John Taylor to be Under Secretary of
the Treasury for International Affairs, David Aufhauser to be General
Counsel of the Department of Treasury, and Grant Aldonas to be Under
Secretary of Commerce for International Trade. See, release [PDF].
5/1. Sterling Brennan was named managing partner of the Orange County
office of the law firm of Morrison & Foerster.
He succeeds Dean Zipser, who served as managing partner for over three years.
Zipser will continue to chair the litigation group in Orange County. See, MoFo release.
5/1. The U.S.
Court of Appeals (7thCir) issued its opinion
in S
Industries v. Centra 2000, a case regarding attorneys fees in
trademark infringement cases. S Industries filed a complaint in U.S. District
Court (NDIll)
alleging, among other things, that Centra 2000, a producer of data management
software, infringed its "Sentra" trademark in violation of the Lanham
Act. S Industries did not hold a federal registration for the "Sentra"
mark for use on computer hardware or software. The District Court held that the
claim was unfounded, and eventually awarded $136,803 in attorneys fees. The
District Court based this award on S Industries' unfounded claims, and
procedural maneuvering, including frivolous and dilatory tactics, that increased
the cost of defending the suit. The Appeals Court affirmed.
5/1. James Kelly, Assistant Secretary of State for East Asian and Pacific
Affairs, testified to the Senate
Foreign Relations Committee's Subcommittee on East Asia and Pacific Affairs
regarding trade with the People's Republic of China. He stated in his prepared
testimony that "Our trade with China is in our interest. That is not
changed by the fact that trade also happens to be good for China. As the
President said to the American Society of Newspaper Editors on April 5, the
marketplace promotes American values; trade encourages more freedom and
individual liberties. You can see that happening today in China, where trade has
led to greater openness and fewer government controls on day-to-day life,
particularly in the coastal region most affected by international trade. We do
not claim that trade will remake China, but it helps. For these reasons, as well
as our economic interests, and to help foster China's greater integration in the
international community of nations, we support China's WTO entry as soon as
China is ready to meet WTO standards. Taiwan is ready for entry now, and we
expect both to enter the WTO in close proximity."
5/1. FBI Director Louis Freeh announced that he will retire from the FBI in
June. Freeh released a statement in
which he thanked various individuals and entities, and reviewed the recent
accomplishments of the FBI. For example, he stated that "We have received
the human, technical, and financial resources needed to keep the FBI at the
cutting edge of investigations, particularly in the rapidly evolving area of
cyber-crime. Over the nearly eight years that I have been Director, Congress has
increased the FBI's budget by more than $1.27 billion to the 2001 Budget
Appropriation level of $3.44 billion. That is a 58% increase over 1993's budget.
At the same time, we have benefitted from laws that have strengthened our
crime-fighting abilities, including the Communications Assistance for Law
Enforcement Act ..." He also thanked former President Clinton for
appointing him, and President Bush for asking him to continue as Director of the
FBI. He also stated that Bush "brought great honor and integrity to the
Oval Office." He did not say what Clinton brought to Oval Office.
5/1. The FBI's National Infrastructure Protection
Center (NIPC) issued an alert that it
"has reliable information indicating a very significant increase in
attempts to exploit known weaknesses in the lpd/LPRng and RPC daemons of
Unix-based operating systems." The alert adds that this "is consistent
with past activities involving the installation and operation of the "mstream"
Distributed Denial of Service (DDoS) tool."
5/1. The Senate Appropriations
Committee's Subcommittee on Commerce, Justice, State, and the Judiciary held
a hearing on the Department of Commerce FY 2002 budget. Donald Evans,
Secretary of Commerce, addressed funding for several tech related offices,
including the USPTO, NTIA,
and BXA,
in his prepared
testimony. He stated that the USPTO "requests a total program level of
$1,139 million, a $100 million increase to manage its growing workload." He
stated that the NTIA "requests $73.0 million. This includes a program
increase of $2.1 million for the Radio Spectrum Measurement van and suitcase
necessary for NTIA's analysis of critical new wireless technologies. We are
requesting a decrease of $30 million in the Technology Opportunities Program
(TOP), for a total request of $15.5 million. This funding will enable NTIA to
support approximately thirty new grants to under-served communities to
demonstrate innovative uses of emerging information technologies." He also
said that the "Bureau of Export Administration requests $68.9 million in FY
2002. This request includes a program increase of $1.6 million for the redesign
and replacement of the Export Control Automated Support System, which will
enable better and faster decisions on license applications to accelerate U.S.
competitiveness in global markets. An increase of $0.5 million is also requested
to achieve efficiencies in processing export licenses."
5/1. Bertelsmann and EMI announced that they will not merge,
citing government regulatory obstacles as one reason. Bertelsmann stated that
"After intensive exploratory talks, Britain's EMI Group plc and Bertelsmann
AG have decided not to continue the negotiations about merging their music
businesses. The companies have mutually concluded that the regulatory hurdles
Brussels and Washington would most likely impose on an EMI/Bertelsmann Music
Group (BMG) merger would require a complicated, lengthy investigation and
approval procedure. Also, preliminary talks indicated that there would be
significant stipulations, which might have called the project’s economic
viability into question." See, release.
5/1. The U.S.
Court of Appeals (5thCir) issued its opinion
in Bennett
v. Yamaha, an antitrust case involving allegations of violation
of the Sherman Act in connection with resale price maintenance, advertising
programs, and monopolization in the sale of Yamaha personal watercraft. The
District Court held in favor of defendants on all counts. The Court of Appeals
affirmed.
5/1. Sen. Max Baucus (D-MT) gave an address
in the Senate on U.S. China Policy. He stated that "Last year Congress
approved, by a wide margin, legislation granting Permanent Normal Trade
Relations status to China once they join the World Trade Organization. The
benefits of incorporating China into the world trade community were clear.
American farmers, businesses, and workers would be well served by a growing and
liberalized economy in China. Economic growth in China would, over the long
term, lead to a larger middle class making its own demands on the government for
greater accountability and personal choice, just as happened in South Korea and
Taiwan. Membership in the WTO would bring international disciplines to the
Chinese economy. And the reformers, led by Premier Zhu Rongji, would be
strengthened. If anything, nurturing growth in our economic and trade
relationship with China is more important than ever." He added that
"we want full access for American goods and services to the largest country
in the world with the fastest growing economy. That means completing China's
accession to the WTO, granting them PNTR, and supporting our businesses' efforts
to penetrate the Chinese economy. It does not mean revoking China's established
normal trade status."
5/1. The GAO
released a report [PDF]
titled "Computer-Based Patient Records; Better Planning and Oversight by
VA, DOD, and IHS Would Enhance Health Data Sharing."
5/1. The GAO
released a report [PDF]
titled "Electronic Records: Clinton Administration's Management of
Executive Office of the President's E-Mail System."