News from May 21-25, 2003

FCC to Consider Media Ownership Rules on June 2

5/23. The Federal Communications Commission (FCC) announced the agenda [PDF] for its June 2, 2003 meeting. It lists only one item -- media ownership rules. It states that "The Commission will consider a Report and Order concerning its broadcast multiple ownership rules."

This Report and Order will be issued in several proceedings: Review of the Commission's Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996 (MB Docket No. 02-277); Cross-Ownership of Broadcast Stations and Newspapers (MM Docket No. 01-235); Rules and Policies Concerning Multiple Ownership of Radio Broadcast Stations in Local Markets (MM Docket No. 01-317); and Definition of Radio Markets (MM Docket No. 00-244).

The meeting will be at 9:30 AM in the FCC's Commission Meeting Room. The meeting will be webcast.

4th Circuit Vacates District Court Opinion in Case Affecting Internet Alcohol Sales

5/23. The U.S. Court of Appeals (4thCir) issued its per curiam opinion [6 pages in PDF] in Bolick v. Danielson, a challenge to Virginia's alcohol sales statute under the commerce clause of the U.S. Constitution. The District Court held the statute unconstitutional. But, the Virginia legislature then amended the statute. The Appeals Court merely vacated the District Court opinion, and remanded for consideration of the statute as amended.

Clint Bolick is an attorney with the Institute for Justice, which describes itself as a "libertarian public interest law firm" that sues "governments when they stand in the way of entrepreneurs who seek to earn an honest living free from arbitrary and oppressive government interference".

In the present case, as a wine consumer and resident of Virginia, he is a plaintiff. In other cases, such as Swedenburg v. Kelly, a challenge to New York's liquor control laws, he is acting as an attorney for small wineries and wine consumers.

In this case, Bolick, and other wine consumers, and several out of state wineries, filed a complaint in U.S. District Court (EDVa) against members of the Virginia Department of Alcohol Beverage Control, alleging that Virginia's statute, which prohibited the importation of wine and beer into Virginia except through a regulated, multi-tiered structure, violates the dormant commerce clause. The plaintiffs sought declaratory and prospective injunctive relief.

The District Court held that the statute unconstitutionally discriminated against out of state wine and beer manufacturers and sellers and was not saved by the Twenty-first Amendment. See, Bolick v. Roberts, 199 F. Supp. 2d 397.

However, the Virginia legislature passed, and the governor signed into law, on April 9, 2003, legislation that alters the statute at issue in this case. The Appeals Court vacated the District Court opinion, and remanded, without providing its own constitutional analysis.

Numerous state protectionist statutes have the effect of banning many forms of e-commerce, including sales of wines by small wineries. And, many businesses and consumers that wish to engage in e-commerce have brought legal challenges to these protectionist statutes. However, in the case of challenges to liquor laws, e-commerce proponents face the additional obstacle that the the 21st Amendment grants the states authority to regulate alcohol sales.

Different courts have reached different results in wine sales cases. For example, on April 8, 2003, the U.S. Court of Appeals (4thCir) issued its opinion [20 pages in PDF] in Beskind v. Easley, holding that North Carolina's ban on direct shipment of wine from out of state wineries to North Carolina residents violates the Commerce Clause. See, TLJ story titled "4th Circuit Holds North Carolina Ban On Internet Wine Sales Is Unconstitutional", April 8, 2003.

Similarly, on November 12, 2002, the U.S. District Court (SDNY) issued its opinion [32 page PDF scan] in Swedenburg v. Kelly, holding that New York state's ban on the direct shipment of out of state wine is unconstitutional. See, story titled "Court Holds New York's Ban on Internet Wine Sales Is Unconstitutional", in TLJ Daily E-Mail Alert No. 551, November 18, 2002.

In contrast, the U.S. Court of Appeals (7thCir) reached a different conclusion in its opinion in Bridenbaugh v. Wilson. In that case, the plaintiffs challenged the constitutionality of an Indiana statute that made it unlawful for persons in another state to ship an alcoholic beverage directly to an Indiana resident. The District Court held that the Indiana direct shipment regulation was unconstitutional under the Commerce Clause, and granted the plaintiffs' summary judgment motion (Bridenbaugh v. O'Bannon, 78 F. Supp.2d 828 (N.D. Ind. 1999)). Then, the Seventh Circuit reversed, upholding the constitutionality of the state ban.

Judge Frank Easterbrook wrote that "This case pits the twenty-first amendment, which appears in the Constitution, against the ``dormant commerce clause,创 which does not." He continued that the 21st Amendment (which repealed prohibition) "directly authorizes state control over imports, while the premise of dormant commerce clause jurisprudence is an inference that the grant of power to Congress in Art. I sec.8 cl. 3 implies a limitation on state authority over the same subject. We must decide how the combination of express grant and implied withdrawal of state power applies to" the Indiana ban on direct sales of wine. He came down on the side of the 21st Amendment.

Another Spam Bill Introduced in House

5/23. Rep. Richard Burr (R-NC) and others introduced HR 2214, the "Reduction in Distribution of Spam Act of 2003". This bill would require that commercial e-mail messages contain the identity of the sender and an opt out mechanism. It would provide ISPs, states, and the FTC with enforcement authority, but only in federal court. The bill creates no private right of action, and prohibits class actions. The bill would also criminalize sending commercial e-mail with a false identity of the sender, certain sezually oriented messages, and certain automated e-mail address harvesting practices. The bill also contains a limited preemption clause.

The basic requirement of the the bill, found in Section 101(a), provides that "No person may initiate in interstate commerce the transmission, to a covered computer, of any commercial electronic mail message unless the message contains" identification, notice of opt out opportunity, a mechanism to opt out, and a valid street address.

The bill provides that "commercial electronic mail" must contain a "Clear and conspicuous notice of the opportunity ... to decline to receive future unsolicited commercial electronic mail messages from the sender".

Commercial electronic mail messages also must contain "A functioning return electronic mail address or other Internet-based mechanism, clearly and conspicuously displayed, that ... a recipient may use to submit, in a manner specified by the sender, a reply electronic mail message or other form of Internet-based communication requesting not to receive any future unsolicited commercial electronic mail messages from that sender at the electronic mail address where the message was received".

Then, the basic prohibition of the bill, found in Section 101(b) is that "If a recipient makes a request to a sender ... not to receive some or any unsolicited commercial electronic mail messages from such sender ... the sender may not initiate the transmission to the recipient, during the 3-year period beginning 10 business days after the receipt of such request, of an unsolicited commercial electronic mail message that falls within the scope of the request ..." Also, "no person acting on behalf of the sender may initiate the transmission to the recipient", "no person acting on behalf of the sender may assist in initiating the transmission to the recipient", and "the sender may not sell, lease, exchange, or otherwise transfer or release the electronic mail address of the recipient".

Section 101(c) of the bill bans e-mail messages with false header information. It provides that "No person may initiate in interstate commerce the transmission, to a covered computer, of a commercial electronic mail message that contains or is accompanied by header information that is false or misleading (including header information that uses a third party's domain name without the third party's permission)." (Parentheses in original.)

Finally, Section 101(d) of the bill bans sending of e-mail in violation of the basic prohibition where there has been certain types of electronic harvesting of e-mail addresses. The distinction is important for enforcement actions. For example, statutory damages are greater if the violation includes the use of harvested e-mail addresses.

The bill then provides an exclusive list of who can bring civil actions for violation of the basic prohibitions of the bill. It includes providers of internet access service, states, and the Federal Trade Commission (FTC). However, it provides no cause of action to individual e-mail recipients. It also provides that actions brought by service providers and states may not be brought as class actions.

The bill provides a civil cause of action, in federal court, to "A provider of Internet access service adversely affected" by violations of Section 101. For violations of the basic prohibition (but not for violations of the prohibitions on false header information, or e-mail harvesting), the service provider must show "a pattern or practice of violations".

The bill provides that the service provider may recover the greater of actual damages or statutory damages, which is $10 per item for violation of the basic prohibition, and $50 per item for violations of the ban on false header information and e-mail harvesting. For violations of the basic prohibition, there is a cap of $500,000 (or $1,500,000 if the Court finds certain types of willful violation), and the opportunity for the Court to reduce damages.

States may also bring enforcement actions. However, the bill provides certain limitations. States must sue in federal court. States may not bring class actions. State may not bring actions when the FTC has brought a civil action, or the Department of Justice has brought a criminal action.

Criminal Enforcement. The bill would also amend Title 18, the criminal code, to provide for criminal prosecution of certain practices. The bill criminalizes sending e-mail with a false identity of the sender. However, the bill also provides an affirmative defense that less that 100 such messages were sent per 30 day period.

The bill would also criminalize sending certain seχually oriented messages. It provides that "Whoever knowingly sends an unsolicited commercial electronic mail message that includes seχually oriented material to a covered computer and knowingly fails to include in or associated with that electronic mail message the marks or notices prescribed by the Federal Trade Commission under this section shall be punished as provided in section 624."

Finally, the bill would criminalize certain e-mail harvesting practices. It provides that "Whoever knowingly and through the direct or indirect use of a covered computer uses an automated means to obtain electronic mail addresses from an Internet website or proprietary online service operated by another person, without the authorization of that person and uses those addresses in another violation of this chapter, shall be fined under this title or imprisoned not more than one year, or both."

State Preemption. The bill also contains a preemption clause. It provides that "This Act preempts any law of a State, or of a political subdivision of a State, that expressly regulates the form of, required inclusions in, the manner or timing of sending, or the form, manner, or effect of recipient requests regarding receipt of, commercial electronic mail, but such laws preempted shall not include any law regulating falsification in commercial electronic mail of the identity of the sender, of authentication information relating to the sender, of header or routing information relating to such mail, or of subject line information."

The original cosponsors of the bill are Rep. James Sensenbrenner (R-WI), Rep. Billy Tauzin (R-LA), Rep. Bob Goodlatte (R-VA), Rep. Fred Upton (R-MI), Rep. Melissa Hart (R-PA), Rep. Cliff Stearns (R-FL), and Rep. Chris Cannon (R-UT)

The bill was referred to the House Commerce Committee and the House Judiciary Committee. Rep. Sensenbrenner, the Chairman of the Judiciary Committee, stated in a release that "The House Judiciary Committee will be working with the Energy and Commerce Committee to move this legislation expeditiously through the House. It's my hope the House will approve the RID SPAM Act by the end of June".

On April 10, 2003, Sen. Conrad Burns (R-MT) and Sen. Ron Wyden (D-OR) introduced S 877, the "Controlling the Assault of Non-Solicited Pormography and Marketing Act of 2003", or "CAN-SPAM Act". The bill would create civil bans on sending unsolicited commercial e-mail (UCE) with false header information, or with intentionally false or misleading content. It would also require UCE senders to include a return e-mail address, and ban sending further UCE to persons who have objected to receiving more UCE. It would also ban the practice of sending UCE to lists of addresses that have been harvested from websites by automated means. The bill would give enforcement authority to the Federal Trade Commission (FTC), states, and internet access providers, but not individuals. The bill would preempt state UCE laws, with exceptions. See, story titled "Senators Burns and Wyden Re-Introduce Can Spam Bill" in TLJ Daily E-Mail Alert No. 643, April 14, 2003.

On May 1, 2003, Rep. Zoe Lofgren (D-CA) and others introduced HR 1933, the "Restrict and Eliminate the Delivery of Unsolicited Commercial Electronic Mail or Spam Act of 2003", aka the "REDUCE Spam Act".

Sen. Breaux Criticizes Award of Government Contract to MCI WorldCom

5/23. Sen. John Breaux (D-LA) spoke in the Senate about MCI WorldCom. He stated that "MCI committed fraud on a scale that is offensive. It deceived everyone -- its employees and retirees, its shareholders and State and Federal officials. The SEC took a step in the right direction by punishing this company with the largest fine in corporate history."

"But I fear the rest of the Federal Government may not be following the lead of the SEC. For example, I understand that MCI has been given a contract, valued between $23 to $35 million, to build advanced wireless networks in Iraq. The Federal Government should not be rewarding bad actors with precious government contracts", said Sen. Breaux.

He concluded that "Other press reports indicate MCI is also using the Tax Code to reap benefits that should not be available to companies that have committed such egregious fraud. I urge the Senate Finance Committee to investigate these allegations as soon as possible." See, Congressional Record, May 23, 2003, at page S7128.

People and Appointments

5/23. Mike Meece was named Special Assistant to the President and Deputy Director of the Office of Public Liaison. He was previously Deputy Chief of Staff for Secretary of Commerce Donald Evans.

5/23. Mike Gallagher was named Deputy Chief of Staff for Policy and Counselor to Secretary of Commerce Donald Evans. He was previously Deputy Assistant Secretary for the National Telecommunications and Information Administration (NTIA).

5/23. Darren Grubb was named Deputy Chief of Staff for Operations at the Department of Commerce. He was previously Deputy Associate Director of Global Communications at the White House.

More News

5/23. Sen. Charles Grassley (R-IA) and Sen. Max Baucus (D-MT) sent a letter [2 pages in PDF] to Secretary of State Colin Powell regarding the Free Trade Area of the Americas ministerial in November 2003 in Miami, Florida. They noted that a General Accounting Office (GAO) report found "that the Department of State was providing only limited assistance to the USTR as it prepares for the ministerial." The two Senators continued that "While we fully understand that USTR is the lead agency responsible for preparations, the Department of State is one of the few agencies with the expertise and resources required to organize and coordinate a multinational meeting of this magnitude." The urged the State Department to "do everything it can over the next several months to work with USTR and provide the resources necessary to help ensure that the FTAA ministerial is a success."

DHS and NIST to Collaborate

5/22. Department of Homeland Security's (DHS) Science and Technology Directorate and the Department of Commerce's (DOC) Technology Administration (TA), which includes the National Institute of Standards and Technology (NIST), entered into a Memorandum of Understanding (MOU) [2 pages in MS Word] which states that "the Directorate and TA seek to collaborate on research and planning activities, and share where appropriate facilities, personnel, and scientific information". See, full story.

FTC Files Complaint Against Staples Alleging False Statements in Web Site

5/22. The Federal Trade Commission (FTC) filed a civil complaint [8 pages in PDF] in U.S. District Court (DMass) against Staples alleging violation of the Federal Trade Commission Act (FTCA) and the FTC's Mail Order Rule in connection with its misrepresentations regarding one day delivery and website access to its "realtime inventory".

Staples sells office supplies, furniture, technology products, and other items by catalog, telephone, and the internet. The complaint alleges that "Prior to May 4, 2002, on its website, Defendant made ``one day创 delivery representations to all United States customers who viewed the website. ... Defendant抯 policy, however, is to deliver products that are promised for one-day delivery in one business day." (Emphasis in original.)

The complaint also alleges that "First-time visitors to Defendant's website are required to submit their U.S. ZIP code before they can browse the website for items to purchase. Defendant抯 website states, ``To view realtime inventory availability, please enter the ZIP code where products will be shipped.创 ... Prior to May 4, 2002, customers who entered their ZIP code on Defendant抯 website as requested did not actually view Defendant抯 real time inventory. The website was not updated in real time."

The FTC also announced that it reached a settlement with Staples, under which Staples will pay a $850,000 fine. See also, proposed Consent Decree [10 pages in PDF], which was also filed on May 22. See also, FTC release.

FCC Sets Deadlines for Comments in Broadband Over Powerline Inquiry

5/22. The Federal Communications Commission (FCC) published a notice in the Federal Register that describes the FCC's Notice of Inquiry [21 pages in PDF] in its proceeding titled "In the Matter of Inquiry Regarding Carrier Current Systems, including Broadband over Power Line Systems". This notice also sets deadlines for public comments. Comments are by August 6, 2003, and reply comments are due by September 5, 2003.

The FCC announced, but did not release, this Notice of Inquiry (NOI) at its April 23, 2003, meeting. It released the text of the NOI on May 6, 2003. See, story titled "FCC Announces NOI Regarding Broadband Over Powerlines" in TLJ Daily E-Mail Alert No. 628, April 24, 2003, and story titled "FCC Releases NOI on Broadband Over Power Lines" in TLJ Daily E-Mail Alert No. 656, May 7, 2003.

This NOI states that broadband over power line (BPL) "systems use existing electrical power lines as a transmission medium to provide high-speed communications capabilities by coupling RF energy onto the power line. Because power lines reach virtually every community in the country, BPL could play an important role in providing additional competition in the offering of broadband infrastructure to the American home and consumers. In addition, BPL could bring Internet and high-speed broadband access to rural and underserved areas, which often are difficult to serve due to the high costs associated with upgrading existing infrastructure and interconnecting communication nodes with new technologies."

This NOI requests "information and technical data so that we may evaluate the current state of BPL technology and determine whether changes to Part 15 of the Commission抯 rules are necessary to facilitate the deployment of this technology."

See, Federal Register, May 23, 2003, Vol. 68, No. 100, at Pages 28182 - 28186. This is ET Docket No. 03-104. For more information, contact Anh Wride at 202 418-0577 or

FRB Governor Addresses Prospects for Economic Growth

5/22. Federal Reserve Board (FRB) Governor Mark Olson gave a speech in Minnesota titled "Assessing Prospects for Economic Growth in the United States".

He stated that "the economy will probably remain soft in the near future and that inflation will remain low. Nonetheless, I continue to believe that the pieces are in place for future robust growth." Also, FRB Chairman Alan Greenspan testified before the Joint Economic Committee on May 21. He stated in his prepared testimony that "the consensus expectation for a pickup in economic activity is not unreasonable, though the timing and extent of that improvement continue to be uncertain". Olson also focused on trends in the technology and communications sectors.

Olson said that "By late 2000, the boom had come to an end. The stock market began to retreat in early 2000, and by the end of the year, analysts were revising down their expectations for future earnings. Many businesses were cutting back sharply on capital investment -- particularly in high-tech equipment -- as demand and profits weakened and many companies, such as those in the telecommunications industry, found that they had overspent on equipment during the boom."

Olson continued that "the fundamentals look favorable" for the business sector. "In the near term, lower oil prices should reduce the costs of production for many businesses and free funds for other uses. Also, with interest rates low, the incentives for capital expenditure in the tax code in place until late 2004, and prices for high-tech goods still falling, the cost of capital should remain low."

He added that "Over the longer run, the continuing rapid pace of technological innovation implies that there are many potential investments that offer attractive returns. In the uncertain business environment that has prevailed for some time, many businesses have probably been making do with their existing equipment, stretching out their normal replacement cycles, especially for rapidly depreciating high-tech equipment. Overall, though shifts in business attitudes are difficult to measure, I believe that markets reward businesses that outperform their competitors and that, as demand picks up, companies will respond to opportunities to incorporate technological advances in production, communication, and organization."

Representatives Address FCC's Failure to Produce Triennial Review Order

5/22. Rep. Charles Bass (R-NH) and Rep. Leonard Boswell (D-IA) spoke in the House regarding the Federal Communications Commission's (FCC) triennial review order. The FCC announced this order in February, but has yet to release the text of the order. See, TLJ story titled "FCC Announces UNE Report and Order", February 20, 2003.

Rep. Boswell stated that "Three months ago, the FCC adopted its Triennial Review order. I believe the economic implications of this action will be of great benefit throughout our Nation. However, the FCC has had 3 months to issue rules on this action and has done nothing. Meanwhile the companies are held hostage because, quite frankly, their hands are tied."

He asked, "how is it possible the United States can ship a large piece of military equipment halfway around the world in a shorter period of time than it takes the FCC to send its rules up a flight of stairs?"

He urged the FCC "to complete its work and bring some certainty to the telecommunications industry". See, Congressional Record, May 22, 2003, at page H4532.

Rep. Bass stated that "the United States is the most technologically advanced country in the world. One measure, however, where the U.S. is sorely lacking behind other industrialized nations is high-speed Internet access for citizens and small businesses alike. The United States is not even among the top five countries in these broadband access rates. In fact, we are behind South Korea, Canada, Taiwan and Sweden, just to name a few. The statistics for DSL, a form of broadband that uses the telephone infrastructure, are even worse. The U.S. is not even in the top 10."

He continued that the FCC "has begun to see that regulation of DSL harms the ability of companies to deploy that technology. Part of the FCC's Triennial Review, adopted this past February, improved some of the DSL regulations. That should help make DSL deployment easier. However, there are two problems. The first is that the FCC has yet to actually issue these rules agreed upon in February, and the second is that action in February is just a start."

He added that "The FCC is looking at whether or not to regulate DSL as a telephone service. The broadband provided over cable, satellite or wireless is not as regulated as telephone." See, Congressional Record, May 22, 2003, at page H4532.

Rep. Bass is a member of the House Commerce Committee, and its Telecommunications and Internet Subcommittee.

Bill Would Facilitate Internet Sale of Replacement Contact Lenses

5/22. Rep. Richard Burr (R-NC), Rep. Billy Tauzin (R-LA), Rep. James Sensenbrenner (R-WI), and Rep. Jim Matheson (D-UT) introduced HR 2221, the "Fairness to Contact Lens Consumers Act". The bill does not reference the internet or electronic commerce. However, if passed, it would remove some barriers to the sale of replacement contact lenses over the internet.

Rep. Richard BurrRep. Burr (at right) is a member of the House Commerce Committee, which has jurisdiction over the bill. Rep. Tauzin, a cosponsor, is the Chairman of the Committee.

The bill provides, in part, that "Upon completion of a contact lens fitting, a prescriber --
(1) whether or not requested by the patient, shall provide to the patient a copy of the contact lens prescription; and
(2) shall, as directed by any person designated to act on behalf of the patient, provide or verify the contact lens prescription by electronic or other means."

The bill also provides that "A prescriber may not --
(1) require purchase of contact lenses from the prescriber or from another person as a condition of providing a copy of a prescription or verification of a prescription under subsection (a);
(2) require payment in addition to the examination fee as a condition of providing a copy of a prescription or verification of a prescription under subsection (a); or
(3) require the patient to sign a waiver or release as a condition of verifying or releasing a prescription."

The bill would also require the Federal Trade Commission (FTC) to "undertake a study to examine the strength of competition in the sale of prescription contact lenses."

The House Commerce Committee and the FTC have previously examined this issue. On September 26, 2002, the Committee's Subcommittee on Commerce, Trade and Consumer Protection held a hearing that addressed several issues, including contact lenses. See, TLJ story titled "House Subcommittee Holds Hearing on State Impediments to E-Commerce", September 26, 2002.

Joe Zeidner of 1-800- CONTACTS argued the case against state regulation of the sale of contact lenses over the Internet. See, prepared statement. Ed Cruz, Director of the Federal Trade Commission's (FTC) Office of Policy Planning, also testified. He presented the FTC's prepared statement, which reviewed the FTC's March 27, 2002, comment submitted to the State of Connecticut regarding the sale of disposable replacement contact lenses over the internet. The FTC wrote that "requiring stand alone sellers of replacement contact lenses to obtain Connecticut optician and optical establishment licenses would likely increase consumer costs while producing no offsetting health benefits" and "serve as a barrier to the expansion of Internet commerce". See also, story titled "FTC Backs Internet Sales of Contact Lenses" in TLJ Daily E-Mail Alert No. 399, March 29, 2002.

In addition the FTC held a three day workshop on October 8-10, 2002, that addressed several types of regulatory barriers to e-commerce, including those pertaining to contact lenses. See, FTC notice.

John Tennis, Assistant Attorney General for the state of Maryland, wrote in his prepared statement that "The Attorneys General of the 31 States that prosecuted the contact lens antitrust litigation believe that some lens manufacturers and some eye care professionals (``ECPs) are making an effort to restrict the sale of disposable contact lenses through all forms of discount sales, including the Internet, mail order, pharmacies and mass merchandisers." (See, In re Disposable Contact Lens Litigation, MDL Docket No. 1030 (M.D. Fla.).)

He continued that "The Attorneys General brought their lawsuit, in 1996, because of specific and overwhelming evidence that lens manufacturers entered into agreements with organized optometry to prevent discount sellers from selling replacement lenses to consumers. We found that the actions to exclude the discount sellers and reserve sales of replacement lenses exclusively to ECPs resulted in fewer choices for consumers of where to buy lenses, in higher prices to consumers to purchase lenses and a risk that high ECP prices were discouraging lens wearers from purchasing new lenses as frequently as recommended."

See also, other prepared statements submitted at the FTC's workshop: Food and Drug Admistration (FDA), Jonathan Coon (1-800 CONTACTS), Pat Cummings (American Optometric Association), Paul Halpern (National Association of Optometrists and Opticians), Morris Kleiner (University of Minnesota), and Gerald Ostrov (Johnson & Johnson).

People and Appointments

5/22. Dan Brouillette was named Staff Director for the House Commerce Committee. He previously was Assistant Secretary of Energy for Congressional and Intergovernmental Affairs. From 1989 to 1996 he worked on the personal staff of Rep. Billy Tauzin (R-LA), who is now the Chairman of the Committee.

5/22. President Bush announced his intent to nominate Joshua Bolten to be Director of the Office of Management and Budget (OMB), replacing Mitch Daniels. Bolten is currently Assistant to the President and Deputy Chief of Staff for Policy at the White House. Before that, he worked on the Bush Cheney campaign and transition. Before that, he worked for Goldman Sachs International. And before that, he was General Counsel to the U.S. Trade Representative (USTR) during the administration of the elder George Bush. From 1985 to 1989, he was International Trade Counsel to the Senate Finance Committee. He has also worked for the law firm of O'Melveny & Myers. See, White House release. Bolton stated at a White House ceremony that he would be a "tight-fisted custodian of the people's money". See, transcript.

5/22. The Senate confirmed Consuelo Maria Callahan to be a Judge of the U.S. Court of Appeals (9thCir) by a vote of 99-0. See, Roll Call No.195.

5/22. The Senate confirmed Scott Coogler to be a Judge of the U.S. District Court for the Northern District of Alabama.

5/22. The Senate confirmed Gregory Mankiw to be a Member of the Council of Economic Advisers.

More News

5/22. The Securities and Exchange Commission (SEC) issued an Order Instituting Public Administrative Proceedings against PricewaterhouseCoopers alleging improper professional conduct in connection with its audit of SmarTalk TeleServices, a bankrupt provider of prepaid telephone cards and wireless services. See also, SEC release.

5/22. The Senate Commerce Committee held another hearing on media ownership. See, statement of Sen. Ernest Hollings (D-SC), the ranking Democrat on the Committee, and statement of Sen. Wayne Allard (R-CO). See also, prepared testimony of witnesses: Rupert Murdoch (Ch/CEO of News Corporation), Tom Fontana (Writers Guild), Gene Kimmelman (Consumers Union), and Kent Mikkelsen (Economists, Inc.).

5/22. The Senate Indian Affairs Committee held a hearing on telecommunications in Indian country. See, prepared testimony of Kelly Levy of the National Telecommunications and Information Administration (NTIA).

5/22. The Competitive Telecommunications Association (CompTel) released a study [8 pages in PDF] titled "Wholesale Lies: The Truth About RBOC UNE-P Costs". It asserts that the four regional Bell operating companies (RBOCs) "earn healthy margins" on their wholesale unbundled network element platform (UNE-P) business, "even when accounting for the ``embedded创 cost of constructing and maintaining the existing phone networks". The report asserts that the four RBOCs had an annual rate of profits of at least $605 Million on their UNE-P leases in the first quarter of 2003. See also, CompTel release.

5/22. The House Judiciary Committee's Subcommittee on Commercial and Administrative Law amended and approved HR 49, the "Internet Tax Nondiscrimination Act". The 105th Congress passed the Internet Tax Freedom Act in 1998, creating a three year moratorium on multiple or discriminatory internet taxes. The moratorium also extended to taxes on Internet access, with a grandfather clause for existing taxes. The 107th Congress passed HR 1552 in 2001, which extended the moratorium until November 1, 2003. HR 49, which is sponsored by Rep. Chris Cox (R-CA), would permanently extend the ban on multiple or discriminatory taxes. It would also terminate the grandfathering of access taxes that existed in 1998. The Subcommittee passed an amendment in the nature of a substitute which makes no substantial changes to the bill as introduced. Rep. William Delahunt (D-MA) offered a sense of the Congress amendment regarding tax simplification, which he withdrew after Rep. Chris Cannon (R-UT), the Chairman, agreed to hold a hearing. Rep. Tammy Baldwin (D-WI) offered, but then withdrew, an amendment that would have maintained the grandfather clause. Rep. Mel Watt (D-NC) offered, but then withdrew, an amendment clarifying which services are exempt.

5/22. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property amended and approved HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003".

7th Circuit Addresses Erroneous Copyright Registrations, Assignments, and Works Made for Hire

5/21. The U.S. Court of Appeals (7thCir) issued its opinion [PDF] in Billy Bob Teeth v. Novelty, a copyright infringement and trade dress infringement case involving novelty teeth. The dispute does not involve technology. Nevertheless, the Court addressed issues, such as authorship, registration, erroneous registration, assignment, and works made for hire, that are applicable in copyright cases involving technology. See, full story.

Rep. Forbes Introduces Bill to Provide Grants for Digital and Wireless Technology for MSIs

5/21. Rep. Randy Forbes (R-VA) introduced HR 2183, the "Minority Serving Institution Digital and Wireless Technology Opportunity Act of 2003". This is the companion bill to S 196, which the Senate passed on April 30, 2003.

Rep. Randy ForbesRep. Forbes (at right) stated in a release that "Full access to technology has become a standard, not a bonus, in how we communicate and do our jobs every day ... Minority Serving Institutions lack even the standard information and digital technology infrastructure, placing students at a disadvantage to compete and qualify for America抯 best paying jobs."

HR 2183 was referred to the House Science Committee and the House Education and Workforce Committee.

The bill would create a new office at the National Science Foundation (NSF) named the Office of Digital and Wireless Network Technology (ODWNT). The bill would also authorize the appropriation of $250,000,000 for each of the fiscal years 2004 through 2008 for grants to be administered by this new office.

The institutions eligible for grants would include "a historically Black college or university", "a Hispanic-serving institution", and "a tribally controlled college or university".

Grants could be used "to acquire the equipment, instrumentation, networking capability, hardware and software, digital network technology, wireless technology, and infrastructure". Grants could also be used "to develop and provide educational services, including faculty development, to prepare students or faculty ...". Grants could also be used to provide teacher training, and to "implement joint projects and consortia to provide education regarding technology".

See, story titled "Sen. Allen Introduces Bill to Create Technology Grant Program for MSIs" in TLJ Daily E-Mail Alert No. 586, January 20, 2003; story titled "Senate Committee Approves Technology Grant Program for Minority Serving Institutions" in TLJ Daily E-Mail Alert No. 623, March 14, 2003; and story titled "Senate Passes Technology Grant Bill" in TLJ Daily E-Mail Alert No. 655, May 5, 2003.

Capitol Hill News

5/21. The House Judiciary Committee amended and passed HR 1115, the Class Action Fairness Act, by a vote of 20-14. It was a largely party line vote, with Republicans supporting the bill, and Democrats opposing it. However, Rep. Rick Boucher (D-VA), a cosponsor of the bill, voted for it. See also, story titled "House Committee Holds Hearing on Class Action Reform Bill" in TLJ Daily E-Mail Alert No. 664, May 19, 2003.

5/21. The Senate Commerce Committee held a hearing on unsolicited bulk e-mail. See, prepared testimony of Sen. Charles Schumer (D-NY), and prepared testimony of Sen. Mark Dayton (D-MN). See also, prepared testimony of Orson Swindle (Federal Trade Commission),  Mozelle Thompson (Federal Trade Commission), Ted Leonsis (American Online), Enrique Salem (Brightmail), Trevor Hughes (Network Advertising Initiative), Mark Rotenberg (Electronic Privacy Information Center), and Ronald Scelson (Scelson Online Marketing).

5/21. The Senate Banking Committee held a hearing titled "National Export Strategy". See, opening statement of Sen. Richard Shelby (R-AL) and opening statement of Sen. Elizabeth Dole (R-NC). See also, prepared testimony of witnesses: Philip Merrill (President of the Export Import Bank of the United States), Peter Watson (President of the Overseas Private Investment Corporation), and Hector Barreto (Administrator of the Small Business Administration.

5/21. The House Homeland Security Committee's (HHSC) Subcommittee on Cybersecurity, Science, and Research & Development held a hearing titled "Homeland Security Science and Technology: Preparing for the Future." See, prepared testimony of Charles McQueary, Under Secretary of the Department of Homeland Security (DHS). He testified about, among other topics, the Threat and Vulnerability, Testing and Assessment (TVTA) program. He wrote that the purposed of the TVTA is "to create advanced modeling, and information and analysis capabilities that can be used by the organizations in the Department to fulfill their missions and objectives. One thrust of this program is to develop advanced computing, information, and assessment capabilities in support of threat and vulnerability analysis, detection, prevention and response. This portfolio also conducts extensive research and development activities in the area of cybersecurity, addressing areas not currently addressed elsewhere in the Federal government. An example of this is developing tools and techniques for assessing and detecting the insider threat."

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5/21. The Treasury Department's Michael Dawson gave a speech titled "Protecting Critical Financial Infrastructure". Dawson is the Deputy Assistant Secretary for Critical Infrastructure Protection and Compliance Policy at the Treasury Department. He spoke in Chicago, Illinois.

5/21. The National Telecommunications and Information Administration (NTIA) published a web site titled "State and Local Rights of Way". It contains a survey of state rights of way laws, a collection of "Rights of Way Success Stories", and a collection of hyperlinks to the web sites of groups and other government entities involvrd in rights of way issues. Some service providers assert that state, local, and federal government entities impose rights of way obstacles to the timely deployment of broadband facilities.

5/21. The Federal Election Commission (FEC) announced that it has assessed civil fines in sixty-six administrative cases. It fined the Level 3 Communications Inc. Political Action Committee $700 for filing a late report. It fined the Sony Pictures Entertainment Inc. PAC $343.75 for filing a late report. It also fined the Friends of John Conyers $5,250 for not filing a quarterly report. Rep. John Conyers (D-MI) is the ranking Democrat on the House Judiciary Committee. See, FEC release.

5/21. The Office of the U.S. Trade Representative (USTR) announced that the U.S. and Bahrain intend to seek to negotiate a free trade agreement. The USTR stated in a release that "The proposed free trade agreement would support Bahrain's commitment to transparency, openness and the rule of law, and would include increased protection for intellectual property and specific provisions to encourage the development of e-commerce."

5/21. The Commerce Department's Technology Administration (TA) released a report [9 pages in PDF] titled "A National Benchmarking Analysis of Technology Business Incubator Performance and Practices", and a report [PDF] titled "Business Incubation: Emerging Trends for Profitability and Economic Development in the US, Central Asia and the Middle East".

Go to News from May 16-20, 2003.