|News Briefs from
August 1-5, 2001
Sen. Hollings Introduces Structural Separation Bill
8/3. Sen. Ernest Hollings (D-SC), the
Chairman of the Senate Commerce
Committee, introduced the Telecommunications Competition Enforcement Act of
2001. This bill would require structural separation of the Regional Bell
Operating Companies (RBOCs) into wholesale and retail units.
Walter McCormick, the P/CEO of the USTA, and group which represents the
interest of the RBOCs, stated that "This proposal to carry out a split of
local telephone companies has been wisely and repeatedly rejected in the past
for one reason: consumers are the biggest losers. If you force phone companies
to unbundle the services they offer to consumers, you force the newly split
companies to make up for these legislated inefficiencies by either increasing
their prices or decreasing their quality of service." See, USTA release.
In contrast, Russell Frisby, P/CEO of CompTel,
stated that "Given the Bells' refusal to honor their legal commitments to
open their local networks as codified in the Telecommunications Act of 1996,
there really is no other choice ... . CompTel has long maintained that
separating the Bells into wholesale and retail units is the only way to ensure
that Bells give up their local phone monopolies." See, CompTel release.
Reps. Cannon and Boucher Introduce Internet Music Copyright
8/3. Rep. Chris Cannon (R-UT) and Rep. Rick Boucher (D-VA) introduced the
Competition Act of 2001 (MOCA), a bill to amend several sections of the
Copyright Act regarding music and the Internet.
The bill would expand the in store exemption to include playing music segments
over the Internet, expand the software backup exemption to include copying
digital music for backup or incidental purposes, and expand the ephemeral copy
exemption by allowing broadcasters and webcasters to make multiple copies. It
would also require record companies that license an affiliate to also license
independent non affiliated distribution services. It would also amend the
compulsory licensing section to address certain digitally delivered music.
The bill will go to the House
Judiciary Committee, and its House Courts, Internet, and Intellectual
Property Subcommittee, of which both Rep. Cannon and Rep. Boucher are members.
However, a recent hearing of the subcommittee revealed that some other members,
and some industry groups, do not favor some of the provisions contained in the
Rep. Cannon stated on introducing this bill that "The copyright law's
present music licensing system is unique in its complexity and problems. The
Internet has demonstrated a need for streamlining and clarification. Under
current law, it is impossible for any online company - whether a behemoth like
MusicNet or a small company like Listen.Com - to obtain the necessary licenses
in a timely and efficient way." See, Rep. Cannon's statement.
Rep. Boucher stated that the bill will "promote a legitimate online music
marketplace" by removing obstacles in the copyright laws. See, Rep.
and summary of the
Summary of the MOCA
The bill was printed on 18 pages. It is organized in seven sections. Section 1
is the title of the bill.
2 expands the in store exemption to infringement (17 U.S.C. § 110(7)) to include
sampling over the Internet. Currently, it is not an infringement of copyright if
a store plays music, if there is no admission charge, and "the sole purpose
of the performance is to promote the retail sale of copies". Section 2
expands this exemption to include the playing of up to 30 seconds of a song (up
to 60 seconds for long recordings) "by digital audio transmission, by or
through a digital online service open to the public at large".
3 makes changes to the emphemeral recordings exception to exclusive
rights (17 U.S.C. §
112). Current law allows a broadcaster to make one copy "for purposes
of archival preservation or security". Section 3 of the bill would allow
broadcasters and webcasters to make "one or more copies". Rep. Boucher
explained that the purpose of this is "to accommodate the need for
different bit rates (e.g., dial-up, broadband), different formats (e.g.,
RealPlayer or Windows Media Player), and caching throughout the network to
ensure efficient and timely delivery to consumers."
6 expands the software backup exemption to infringement (17 U.S.C. § 117) to
include digital music. Under current law the owner of a copy of a computer
program is allowed to make a backup copy. Section 6 of the bill would expand
this to include back up copies of music files acquired by digital delivery. The
bill would also permit copying of digital music files that "is incidental
to the operation of a device in the ordinary course of the use of a work",
thereby permitting buffer copies to be made in the course of browsing or
4 changes existing law regarding licensing for transmission (17 U.S.C. § 114). It
would, among other things, require record companies to license
independent non- affiliated distribution services. It provides that "If the
copyright owner of a sound recording licenses an affiliated entity the right to
reproduce the copyrighted work, to distribute the copyrighted work to the public
by means of a digital phonorecord delivery or to perform the copyrighted work
publicly, the copyright owner shall make the licensed sound recording available
on no less favorable terms and conditions to all bona fide entities that offer
5 changes existing law regarding compulsory licensing (17 U.S.C. § 115) with
respect to compulsory licensing of digital music. However, Rep. Cannon insisted
that "RIAA has said that MOCA contains a compulsory license for performance
rights. That is just not true."
7 requires the Copyright Office
to conduct an evaluation, and write a report that includes recommendations for
further legislation by the Congress.
RIAA Reaction to MOCA
8/3. The Recording Industry Association of
America (RIAA) opposes the bill, and promises to fight it. Hillary Rosen,
the P/CEO of the RIAA had this to say: "A protracted legislative fight will
not move us closer to where the music industry wants to be - delivering music to
fans through a variety of different, innovative websites. Unfortunately, the
Cannon/Boucher bill introduced today will divert time, energy and resources from
achieving that goal. It is essentially a solution -- a very bad solution -- in
search of a problem."
Rosen continued: "The bill substitutes government regulation for the
marketplace. This is not only wrong, it is also inconsistent with the strongly
held views of experts and the private sector that government regulation of the
Internet would be a disastrous mistake. Many in the industry will fight this
bill aggressively because we know that the marketplace is already moving in the
right direction and that consumers will be served well by both the current and
coming plans for online music services." See, RIAA release.
Computer Security Lacking at the Commerce Department
8/3. The House Commerce Committee's
Subcommittee on Oversight and Investigations held a hearing titled "How
Secure is Sensitive Commerce Department Data and Operations? A Review of the
Department's Computer Security Policies and Practices." Witnesses from the General Accounting Office (GAO) and Department of Commerce (DOC) testified that the
Department's systems are not secure.
Rep. Jim Greenwood (R-PA), the
Chairman of the Subcommittee, said in his opening
statement that the "GAO’s team of ethical hackers identified and
exploited vulnerabilities in the computer systems of these divisions to gain
virtually unlimited access to them internally, from within the Department’s
network, and externally, from the Internet. Not only could these systems be
accessed without authorization, but the information contained in them could be
read, modified, or deleted at will – even with respect to the most sensitive
systems and data files within these seven divisions. And with such access also
comes the power to completely disrupt critical Department operations." See
statement of Rep. Billy Tauzin
(R-LA), Chairman of the full Committee.
Robert Dacey of the GAO stated in his prepared
testimony that "controls intended to protect information systems and
critical data from unauthorized access are ineffectively implemented, leaving
sensitive systems highly susceptible to intrusions or disruptions." He
continued that "Commerce is not adequately (1) preventing intrusions before
they occur, (2) detecting intrusions as they occur, (3) responding to successful
intrusions, or (4) reporting intrusions to staff and management. Thus, there is
little assurance that unauthorized attempts to access sensitive information will
be identified and appropriate actions taken in time to prevent or minimize
damage." Finally, he stated that "Commerce does not have an effective
departmentwide information security management program to ensure that sensitive
data and critical operations are adequately addressed and that appropriate
security controls are in place to protect them".
See also, prepared
testimony of Johnnie Frazier (DOC Inspector General) and prepared
testimony of Samuel Bodman (DOC Assistant Secretary for Technology Policy).
FCC NOI Re Video Competition
8/3. August 3 was the deadline to file comments with the FCC in its Notice
of Inquiry [PDF] regarding video competition. On June 20, 2001 the FCC
adopted a Notice of Inquiry (NOI) into the status of competition in the market
for the delivery of video programming. The FCC stated in a release
that "The NOI seeks information that will allow the FCC to evaluate the
status of competition in the video marketplace, prospects for new entrants to
that market, and its effect on the cable television industry and consumers. The
NOI also solicits information regarding the extent to which consumers have
choices among video programming distributors and delivery technologies."
See, for example, comment
submitted by Motorola and comment
submitted by AT&T. Reply comments are due by September 5. See, CS Docket No.
8/3. The Senate confirmed Jon Huntsman to be a Deputy United States Trade
Representative. See, USTR
8/3. The U.S.
Court of Appeals (9thCir) issued its opinion
[PDF] in Pool
Water Products v. Olin, a private antitrust action brought
under Section 5 of the Clayton Act.
8/3. The ICANN released
for its September 9 meeting in Montevideo, Uraquay.
8/3. Department of Defense (DOD), General Services Administration (GSA), and
National Aeronautics and Space Administration (NASA) published a notice
in the Federal Register that withdraws Federal Acquisition Regulation (FAR) case
2000-014, Signing and Retention of High-Technology Workers. This FAR, which was
published in the Federal Register on December 28, 2000, proposed to explicitly
make allowable signing and retention bonuses in order to recruit and retain
workers that have critical technical skills. The August 3 stated that a reason
for the withdrawal is that signing and retention bonuses were already
permissible. See, Federal Register, Aug. 3, 2001, Vol. 66, No. 150, at Pages
40837 - 40838.
Court Upholds Copyright Office Rule on Webcasting Music
8/2. The U.S. District Court (EDPenn) issued its opinion in Bonneville v.
Peters (also known at National Association of Broadcasters v. Copyright Office),
regarding the Copyright Office's
rules regarding webcasting music over the Internet.
The Copyright Office (CO) adopted new rules [PDF]
on December 11, 2000. It determined that AM/FM broadcast signals transmitted
simultaneously over a digital communications network, such as the Internet, are
not exempted by Section
114(d)(1)(A) of the Copyright Act from paying royalties. Plaintiffs filed a complaint in U.S.
District Court on January 25, 2001, against Marybeth Peters, the Register of
Copyrights, seeking to have this rule overturned. On August 1, the District
Court upheld the rule.
Edward Fritts, the P/CEO of the NAB stated that "Broadcasters, record
companies and consumers have long enjoyed a symbiotic relationship whereby
airplay on radio stations benefits all parties, along with generating enormous
revenues for the record labels. We’re disappointed that this unique
relationship will be disrupted by the court ruling. Broadcasters currently pay
in excess of $300 million annually in music licensing fees to compensate
songwriters and music publishers. Any additional fee to compensate record
companies would be unfair and unreasonable, and for that reason, we are
reviewing our options." See, NAB release.
Hillary Rosen, P/CEO of the RIAA, had this to
say: "We are pleased that the court upheld the rights of artists and record
companies. We now look forward to working with the broadcasters for a smooth
transition into this marketplace." See, RIAA release.
Freedom of Information Limited by State Copyright
8/2. The U.S.
Court of Appeals (2ndCir) issued its opinion in Suffolk
County v. First American, a case involving state freedom of
information law and copyright law. The Appeals Court held that states may assert
copyright to prevent the dissemination of public records obtained under freedom
of information laws.
First American and others published copies of official tax maps made by Suffolk
County, without permission. Suffolk County has registered copyrights in these
maps. Suffolk County filed a complaint in U.S. District Court (SDNY)
against First American and others alleging copyright infringement. Defendants
argued that New York's Freedom of Information Law prevents the County from
asserting copyright. The District Court agreed, and dismissed the complaint.
This appeal followed.
The Appeals Court ruled that states, and their political subdivisions, may
possess copyrights; that the tax maps in question have sufficient originality to
be copyrightable; that the tax maps in question are not in the public domain;
that New York's state freedom of information law does not abrogate copyright
interests; and that Suffolk County may pursue an infringement suit against
defendants. Reversed and remanded.
Senate Committee Approves NTIA Nominee Nancy Victory
8/2. The Senate Commerce Committee
held a hearing on August 1 on several pending nominations, including that of
Nancy Victory to be Assistant Secretary of Commerce for Communications and
Information. On August 2 the Committee voted en bloc to approve these
nominations without any dissenting votes. Victory is on track to become the next
head of the National Telecommunications and
Information Administration (NTIA). William Hatch has been acting head since
the departure of Greg Rohde shortly after the inauguration of President Bush.
Role of the NTIA. Sen. Conrad Burns
(R-MT) described the NTIA as "one of the most important seats" at the
Department of Commerce at the August 1 hearing. It has spectrum management
responsibilities with respect to spectrum bands assigned for government use.
This puts it at the center of the debate over locating and reallocating spectrum
for use by third generation (3G) wireless services, which is intended to bring
broadband Internet access to portable devices. Similarly, the NTIA is involved
in the debate over emerging ultrawideband (UWB) technologies. It also
administers a grant program for communications related projects. Finally, it
serves as the administration's advocate before the FCC, the Congress, and in
public forums on many communications and Internet issues.
Victory testified that her two main issues will be locating spectrum for new
uses, and promoting broadband deployment. In response to a question from Sen. Byron Dorgan (D-ND), she stated that
she hoped to be an "activist". Sen. Burns advised her that "your
function is primarily in the area of policy."
Broadband Deployment. Sen. George
Allen (R-VA) asked Victory about efforts to promote deployment of broadband
Internet access services in rural areas. She responded that this is
"definitely a goal". She added that "I don't believe that the
administration has taken a position on any of the legislative proposals
yet." Nor did she state her views on the Tauzin Dingell bill, or any other
legislative proposals. She only stated that any government action "should
be technology neutral." Sen. Allen added that in addition to copper and
cable, fiber, wireless, and satellite will be important to broadband deployment.
Sen. Dorgan also used to occasion to advocate broadband deployment in rural
areas, such as his home state of North Dakota. He stated that broadband access
"has to be supported by the Universal Service Fund."
3G Wireless. Sen. Allen asked her, "Would you be willing to identify
the most promising chunks of the spectrum?" She responded, "I don't
think I could identify for you what is the best option." She continued that
her role would be to try to create a climate in which all sides come to the
table and compromise. She also ducked a question on the timing of the 1710-1755
MHz spectrum auction. Finally, she suggested that she would institute incentives
for efficient use of spectrum; however, she added, "I don't know what those
mechanisms would be at this time."
Conflicts of Interest. Sen. Dorgan questioned Victory about conflicts of
interest, and a story in
the Wall Street Journal on August 1 that stated that Victory and her husband
"own large amounts of stock in companies such as Verizon Communications
Corp. that would benefit from controlling valuable government- owned airwaves
needed to deliver advanced "third generation" wireless-data services
..." She responded that "I no longer own that stock. I sold it quite a
while ago." She also stated that there is one matter in which she will
recuse herself -- ultrawideband (UWB). Sen. Dorgan expressed his support for her
Revolving Door for Telecom Lawyers
Victory is just one of many telecom lawyers who have moved between the
Washington DC law firms, such as Wiley Rein &
Fielding (WRF), that represent telecom and Internet companies and trade
groups, and the government agencies and offices, such as the NTIA and FCC, that
Victory until recently was a partner at WRF. Her husband, Michael Senkowski,
remains head of WRF's Communications Practice. He is also a former
Administrative Assistant to the Chairman of the FCC. Victory will join many
other former WRF attorneys who now hold top positions in government regulating
telecom and Internet companies. Kevin Martin, one of the
five FCC Commissioners, was once an associate at WRF. Bryan Tramont,
who is Senior Legal Advisor to newly appointed FCC Commissioner Kathleen
Abernathy, also worked at WRF. Maria Cino, the new Assistant Secretary of
Commerce and Director General of the United States and Foreign Commercial
Service, is another WRF veteran. Bruce Mehlman, who is now Assistant Secretary
of Commerce for Technology Policy, has also worked at WRF, as well as on the
Similarly, WRF is full of attorneys who have worked at the regulatory bodies.
For example, lead partner Richard Wiley is a
former FCC Chairman. Finally, Victory will replace Greg Rohde, who has never
worked at WRF. However, before moving to the NTIA, he was the top telecom aide
to Sen. Dorgan, who presided over Victory's confirmation hearing.
GAO Reports on Legal Fees Paid to Attorneys for IP and
8/2. The GAO issued a
report [PDF] titled
"Hourly Fees Paid by Various Federal Agencies to Private Attorneys for
Legal Services". The report was prepared at the request of Rep. William Delahunt (D-MA), a member
of the House Judiciary Committee.
Intellectual Property Services. The report addressed fees paid by NASA
and the Veterans Administration (VA) for legal services involving intellectual
property law. It stated that NASA paid $210 per hour to prepare a patent
application. Also, the VA paid an average of $308 per hour for "advice on
the government's legal rights in certain software products and on the potential
liability under various trade secret laws."
Antitrust Division. Another item in the report is that in FY 2000
"the Antitrust Division had 17
contracts and paid an average hourly fee of $271." The report did not
identify the names of firms or individual attorneys, or the work which they
performed. Nor did it state whether $271 per hour was paid for work on
competitive analyses of applications to provide in region interLATA services.
Appeals Court Denies Microsoft's Motion for Rehearing
8/2. The U.S.
Court of Appeals (DCCir) issued an order [PDF] denying
both Microsoft's July 18 Petition
for Rehearing and the government's July 13 Motion for Immediate
Issuance of Mandate. Microsoft had sought review on the sole issue of
commingling of certain software code specific to web browsing with software code
used for other purposes in certain files in Windows 98. Microsoft stated that
the June 28 opinion
of the U.S. Court of Appeals "accepted the district court's conclusion that
such "commingling" had occurred and that it violated Section 2 of the
Sherman Act. The Court's ruling with regard to "commingling" of
software code is important because it might be read to suggest that OEMs should
be given the option of removing the software code in Windows 98 (if any) that is
specific to Web browsing."
The Court wrote, in its brief order, "Upon consideration of appellees'
motion for immediate issuance of the mandate, the response thereto,
appellant’s petition for rehearing, and the response thereto, it is ORDERED
that the motion for immediate issuance of the mandate be denied. It is FURTHER
ORDERED that the petition for rehearing be denied. Nothing in the Court’s
opinion is intended to preclude the District Court’s consideration of remedy
Steve DelBianco, VP of the Association for
Competitive Technology (ACT), a pro Microsoft group, criticized the Court's
order. He stated in a release that "The industry needs some clarity on this
matter, since it is not completely clear as to whether the appeals court ruling
on "commingling of code" was narrow and relevant only to user access
to the browser, rather than to other innovations in Windows. Continued confusion
on this matter could be disastrous given the life or death stakes for the
thousands of programmers currently porting their software to Windows XP. These
programmers and their companies have made a crucial business decision to rely
upon those features to be part of the operating system and deserve to have some
stability sooner rather than later."
AMT Relief Bill Introduced
8/2. Represenatives Richard Neal
(D-MA), Tom Davis (R-VA), Zoe Lofgren (D-CA), Jerry Weller (R-IL), and 9 others
introduced a bill in the
House to reform the Alternative Minimum Tax (AMT) treatment of Incentive Stock
Options (ISOs). The bill would provide relief to some workers at high tech
companies who exercised stock options before their companies' stock prices
plummeted in 2000.
The problem with existing tax law, say the sponsors, is an unfair anomaly in the
tax code. Some employees exercised incentive stock options in 2000 provided by
their employers. The price of the stock at the time that the employee exercised
the option was often much higher than the price when the option was granted.
Hence, the employee realized a significant gain. However, many of these
employees then held on to the stock, for example, to obtain long term gains tax
treatment. But then, for many of these employees, the price of the stock dropped
precipitously. This left some employees with a huge tax bill -- sometimes more
than the value of the stock, or even their entire net worth. See, sponsors' release.
Related Bills. Sen. Joe Leiberman
(D-CT) introduced a companion bill in the Senate. The bill introduced on August
2 refines HR
1487, which Rep. Lofgren introduced on April 4. The list of sponsors of HR
1487 grew to 49 members.
Current Law. Incentive Stock Options is codified at 26 U.S.C. § 422. The
Alternative Minimum Tax is codified at 26 U.S.C. § 56.
Text of Bill. The bill provides, in relevant part, as follows: "In
the case of an incentive stock option (as defined in section 422 of the Internal
Revenue Code of 1986) exercised during calendar year 2000, the amount taken into
account under section 56(b)(3) of such Code by reason of such exercise shall not
exceed the amount that would have been taken into account if, on the date of
such exercise, the fair market value of the stock acquired pursuant to such
option had been its fair market value as of April 15, 2001 (or, if such stock is
sold or exchanged on or before such date, the amount realized on such sale or
Sponsors. The thirteen original sponsors of the bill include
representatives of districts with concentrations of high tech companies,
including Lofgren (Silicon Valley), Dunn (Seattle area), Davis, Moran and Wolf
(northern Virginia), Doggett (Austin, Texas), and Cannon (Provo and Orem, Utah).
There are also several members of the Ways and Means Committee, which has
jurisdiction, on the sponsorship list, including Neal, Weller, Matsui, and Dunn.
House Subcommittee Approves 5 Year Extension of Internet Tax
8/2. The House Judiciary Committee's
Commercial and Administrative Law Subcommittee approved HR 1552 the Internet
Tax Nondiscrimination Act, on a voice vote. The bill would extend for five
years the current moratorium on multiple or discriminatory Internet taxes, and
taxes on Internet access. The current moratorium, which was enacted in the Internet
Tax Freedom Act in 1998, is set to expire on October 21.
Rep. Bob Barr (R-GA), Chairman of the
Subcommittee, presided. He said that without an extension, "I think you
would see some liberties being taken with taxation of the Internet." He
stated that "we have got to get something through very quickly that will
preserve the moratorium." He added that a 5 year extension is a compromise,
noting that many Members would prefer the permanent extension contained in HR 1675, which
is also titled the Internet Tax Nondiscrimination Act. Finally, he said that
"I think the administration agrees with us."
Gekas Amendment. Rep. Barr pointed out that "Internet sales comprise
less than 1% of total retail sales." Rep.
George Gekas (R-PA) offered, but then withdrew, an amendment that would
provide that the moratorium be extended for 5 years, or until the total value of
retail goods sold in electronic commerce in the U.S. reaches 5 percent of the
total value of all retail goods sold in the U.S., whichever comes first.
Quill Decision. Rep. Mel Watt
(D-NC) and Rep. Jerrold Nadler (D-NY)
both argued that any legislation should both extend the current moratorium, and
address state collection of sales and use taxes, which is not affected by the
moratorium. Currently, Quill v. North
Dakota, 504 U.S. 298 (1992), provides that state and local taxing
authorities are barred under the Commerce Clause from requiring remote sellers
without a substantial nexus to the taxing jurisdiction to collect sales taxes
for sales to persons in the jurisdiction; however, the Court added that Congress
may extend such authority.
Sales Tax Bills. Congress has passed no legislation pertaining to sales
and use taxes. However, there are several bills pending in the Congress that
would provide this authority. See, for example, HR 1410,
sponsored by Rep. Ernest Istook
(R-OK), and S
512, sponsored by Sen. Byron Dorgan
(D-ND). Moreover, several Senators have attempted, unsuccessfully, to draft a
"compromise bill" that would allow states to require remote sellers to
collect sales taxes. The main issue in dispute involves requiring states to
simplify their tax codes.
Rep. Nadler stated that "I don't believe we can totally divorce these two
issues." He added that an impending expiration of the moratorium
"leverage" for passing a sales and use tax bill, and that passing a
five year extension would take away this leverage. Rep. Watt stated that the
moratorium extension and sales tax issues "should continue on parallel
Watt Amendment. Rep. Watt offered an amendment that provides that
"states are authorized to enter into an Interstate Sales and Use Tax
Compact", and that after being signed by the 25 states, the "Congress
shall consent to the Compact within 365 days ... after the adopting States
transmit the Compact to Congress or such compact shall be deemed to be withdrawn
after the 365 day period." Rep. Barr ruled the amendment non germane. Rep.
Nadler stated that he too had an amendment to offer, but would save it for the
full committee mark up session.
More New Bills
8/2. Sen. Joe Lieberman
(D-CT) introduced S 1324, the Senate companion bill to the House bill to
reform the Alternative Minimum Tax (AMT) treatment of Incentive Stock Options (ISOs).
The bill would provide relief to some workers at high tech companies who
exercised stock options before their companies' stock prices plummeted in 2000.
The bill was referred to the Senate
8/2. Sen. Maria Cantwell (D-WA)
introduced S 1337, a bill to provide for national digital school districts. The
bill was referred to the Committee on Health, Education, Labor, and Pensions.
8/2. Sen. Byron Dorgan (D-ND) and Sen. Ted Stevens (R-AK) S 1342, a bill to
allocate H-1B visas for demonstration projects in rural areas. The bill was
referred to the Senate Judiciary
8/2. Sen. Max Baucus (D-MT) and Sen. Robert Byrd (D-WV) introduced S 1347, a
bill to establish a Congressional Trade Office. The bill was referred to the
Committee on Governmental Affairs.
People and Appointments
8/2. The Senate Judiciary Committee,
and then the full Senate, approved the nomination of William Riley to be
U.S. Circuit Judge for the Eighth Circuit.
8/2. The Senate confirmed Robert Mueller to be FBI Director by a vote of
98 to 0.
8/2. President Bush announced his intent to nominate Roscoe Howard to be
U.S. Attorney for the District of Columbia. See, White
8/2. President Bush nominated Jeffrey Howard to be a U.S. Circuit Judge
for the First Circuit, and Terrence
O'Brien to be a U.S. Circuit Judge for the Tenth Circuit. See White
8/2. Sony's U.S. holding company named Nicole Seligman to be General
Counsel. She is a partner in the Washington DC law firm of Williams &
Connolly. She was one of former President Clinton's impeachment defense
attorneys. She is also married to Joel Klein, who was an Assistant
Attorney General in charge of the Antitrust Division in the Clinton
administration, and architect of the Microsoft antitrust litigation.
8/2. The RIAA named Joel Flatow
to be its General Manager, West Coast Affairs. See, RIAA release.
8/2. USTR General Counsel Peter Davidson gave testimony
to the U.S.-China Security Review Commission regarding the PR China's imminent
accession to the WTO.
8/2. The U.S.
Court of Appeals (2ndCir) issued its opinion in Morris
v. Business Concepts, a copyright infringement case
involving registration requirements.
8/2. The Department of Justice fined Unisys $1,430,000 for failing to disclose
information to the government during 1990 contract negotiations. See. DOJ release.
8/2. Rhythms NetConnections, a DSL
service provider, filed a Chapter 11 petition for bankruptcy in U.S. Bankruptcy
8/2. The Copyright Office published
a notice [PDF]
in the Federal Register of several very minor changes to its rules found at 37
CFR 202.1 and 202.17. Each correction changes Latin phrases into italic font.
Senate to Take Up Export Control Bill After Recess
8/1. Senate Majority Leader Tom Daschle
(D-SD) said in the Senate that he anticipates that S 149, the
Export Administration Act of 2001, sponsored by Sen. Mike Enzi (R-WY) will be brought up on
September 4, and if necessary, cloture will be filed September 7. The bill would
modernize export control laws. It would ease restraints on most dual use
products, such as computers and software, but increase penalties for violations.
The Senate Banking Committee passed the bill in March with only one negative
vote. The Bush administration supports it. The bill is opposed by a small group
of Senators who assert that it would harm national security.
Sen. Enzi released a statement in which he said that "This bill has such
strong bipartisan support, it's a shame that it has taken this long to work
through. I'm confident we'll have the bill passed quickly. Quick passage of this
bill is in fact what President Bush has called for. The country needs this bill
to enhance both our security and economic interests."
8/1. The Senate Finance Committee
held a hearing on whether to extend the existing Internet tax moratorium,
and whether to allow state and local governments to impose sales taxes on remote
sellers, including Internet retailers. Sen.
Max Baucus (D-MT), Chairman of the Committee, said in his opening statement [PDF]
that "I, frankly, have not made up my mind yet on what is the best way to
proceed." The existing moratorium expires this fall. See also, opening statement [PDF]
by Sen. Charles Grassley (R-IA), the
See also, prepared statements in PDF by Tom Woodward
(Congressional Budget Office), Frank Shafroth
(National Governors Association), David Bullington
Julian (Federated Department Stores), Michael Grieve
(American Enterprise Institute), Steven Rauschenberger
(National Conference of State Legislatures), and Jeff Friedman (KPMG).
8/1. The House Judiciary Committee's
Commercial and Administrative Law Subcommittee scheduled a meeting to mark up
either HR 1552
or HR 1675 at
2:00 PM on August 2. Both bills are titled the Internet Tax Nondiscrimination
Act. Each would extend the current moratorium on multiple and discriminatory
Internet taxes, and taxes on Internet access. The Subcommittee has not scheduled
for mark up other bills pertaining to authorizing states to tax remote sellers,
and business activity taxes.
Wershba v. Apple
8/1. The California
Court of Appeal (6th) issued its opinion [PDF]
v. Apple Computer, an appeal of the settlement of one of the
three class action lawsuits brought against Apple
Computer in connection with its withdrawal of free technical support in
1997. The Court of Appeal affirmed.
Senate Committee Holds Hearing on Trade
8/1. The Senate Commerce Committee
held a hearing on trade issues. See, opening statement
of Sen. Ernest Hollings (D-SC), the
Chairman of the Committee, opening statement
of Sen. John McCain (R-AZ), the ranking Republican, and opening
statement of Sen. John Kerry (D-MA). See also, opening statements of
witnesses: Donald Evans
(Secretary of Commerce), Edward Luttwak
(Center for Strategic and International Studies), and William Reinch
(National Foreign Trade Council).
Or of the Press
8/1. Rep. Eliot Engel (D-NY), Rep. Bobby Rush (D-IL), and Rep. Mike Honda (D-CA) introduced HR
2700, a bill that would require the FCC to establish an office on
victims of media bias. It was referred to the House Commerce Committee, of which
Reps. Engel and Rush are members.
Export Administration Act Consent Agreement
8/1. Sen. Fred Thompson (R-TN), an
opponent of S
149, the Export Administration Act of 2001, and Sen. Tom Daschle (D-SD), the Senate
Majority Leader, engaged in a discussion on the Senate floor regarding a
unanimous consent request to bring up the bill after the August recess.
Sen. Daschle stated that the "Export Administration Act is part of the
unanimous consent agreement that we entered into a moment ago. It allows the
majority leader to call up the bill on September 4. I say to my colleagues, and
especially to my colleague from Tennessee, that this is an agreement he and I
discussed prior to entering into the agreement. It acknowledges that we would
have at least 2 full days of debate that would accommodate the interest of the
Senator from Tennessee in discussing this issue prior to the time I would file a
cloture motion. I confirm that for the RECORD, and fully expect that those 2
full days of debate will be immediately following the time we come back."
Sen. Thompson agreed to this unanimous consent request. See, Congressional
Record, August 1, 2001, at page S8535.
People and Appointments
8/1. The Senate confirmed Rep. Asa
Hutchinson (R-AR) to be Director of the Drug
8/1. The Senate confirmed Harvey Pitt to the Chairman of the SEC.
8/1. The Senate Banking Committee
approved by voice votes the nominations of Michael Garcia to be Assistant
Secretary of Commerce for Export Enforcement, Henrietta Fore to be
Director of the Mint, and Linda Conlin to be an Assistant Secretary of
Commerce for Trade Development.
8/1. President Bush nominated Paul McNulty to be U.S. Attorney for the
Eastern District of Virginia, which includes tech heavy northern Virginia. He is
a Deputy Associate Attorney General at the U.S. Department of Justice.
Previously he was Chief Counsel and Director of Legislative Operations for House
Majority Leader Dick Armey (R-TX). Before that, McNulty held several posts at
the House Judiciary Committee, including spokesman and Chief Counsel to the
Subcommittee on Crime. And before that, he worked in the Justice Department
during the administration of the elder Bush. He has also worked at the law firm
of Shaw Pittman. See, WH
8/1. The House Education Committee
amended and approved HR 1992, the
Internet Equity and Education Act of 2001, sponsored by Rep. Johnny Isakson (R-GA). The
bill would make it easier to obtain federal financial aid for web based
education programs. See, release.
8/1. The Progressive Policy Institute, a
Democratic think tank, released a report
titled "Adopting P3P for Congressional Web Sites: A How-To Guide." It
states that "By adopting P3P policies on their own web sites, Members send
a signal to both commercial and government web site operators that P3P is here
to stay, and that it is an important part of the debate on Internet
privacy." The problem, write authors Shane Ham and Ari Schwartz, is a
"chicken or egg" issue: "Web site operators will not go through
the effort of adopting P3P if Internet users are not using P3P software. On the
other hand, if no web sites are P3P compliant, Internet users will either ignore
privacy warnings or disable the P3P function altogether."
8/1. The National Telecommunications and
Information Administration's Spectrum Planning Subcommittee released its Federal Long-Range
8/1. The FBI's National Infrastructure Protection
Center (NIPC) issued a release at 11:30 AM
EDT on August 1 on the status of the Code Red worm. It stated:
"Based on preliminary analysis, we expect a level of worm activity
comparable to the July 19th Code Red infection, which resulted in infection of
over 250,000 systems. It should achieve that level of activity by this
Go to News Briefs from July 26-31, 2001.