TLJ News from September 6-10, 2006

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9/8. The U.S. District Court (DC) issued an opinion [77 pages in PDF] in Long v. Department of Justice, a Freedom of Information Act (FOIA) case involving access to computerized records of the Executive Office of U.S. Attorneys.

Gonzales Again Says Terrorists Use New Information and Communications Technologies

9/7. Attorney General Alberto Gonzales gave a speech in New York, New York, in which he again focused on how new information and communications technologies (ICTs) are being used by terrorists. However, in this speech he stopped short of suggesting any government response to, or regulation of, new ICTs.

He said that "Today, al Qaeda stays organized and active in cyberspace, where their ideology recruits, inspires and radicalizes others."

Alberto GonzalesGonzales (at right) said that "the Internet has enabled our enemy to reach out to a global audience of potential terrorists. With a reduced ability to recruit and train on a home base, radical websites and the periodic release of key messages from al Qaeda leadership seek to find and encourage network membership all over the world."

This September 7 speech is one in a series in which the Attorney General has warned that new information and communications technologies are being used by terrorists and criminals. Gonzales has used these speeches to either state, imply, or lay a groundwork for the argument, that government actions are necessary.

For example, Gonzales gave a speech in Pittsburgh, Pennsylvania on August 16, titled "Stopping Terrorists Before They Strike: The Justice Department抯 Power of Prevention". He argued that online radicalization must be contained. See also, story titled Gonzales Says Online Radicalization Must Be Contained" in TLJ Daily E-Mail Alert No. 1,432, August 16, 2006, and story titled "Majoras and Gonzales Offer Contrasting Views of the Internet" in TLJ Daily E-Mail Alert No. 1,436, August 22, 2006.

He also gave a speech in Alexandria, Virginia, on April 20 in which he proposed that internet service providers (ISPs) be required to retain data on their customers for later use by the government. See also, story titled "Gonzales Proposes Data Retention Mandate, Web Site Labeling, and Ban on Deceptive Source Code" in TLJ Daily E-Mail Alert No. 1,357, April 25, 2006.

Moreover, he gave a speech in Vienna, Austria, on May 5, at an European Union interior ministers conference, in which he again advocated requiring service providers to electronically surveil their customers. He continued that "we must preserve data and have it available to be shared with another country". See also, story titled "Gonzales Says Foreign Governments Should Have Access to Information Collected under Data Retention Mandate" in TLJ Daily E-Mail Alert No. 1,365, May 8, 2006.

Gonzales stated in his September 7 speech that terrorists have "put other modern technologies to use as well: Cell phones keep the terrorist network in touch, an inexpensive and universally available form of information-sharing and collaboration that knows no borders."

He added that "They use digital cameras to document potential targets -- creating surveillance files that can be easily and widely shared. Their research, contained on something as small as a thumb-drive or CD, is easily slipped in a pocket or an envelope -- for travel or shipping and eventual sharing with partners all over the globe."

He concluded that "technology has been integral to terrorist communications. Information shared about target locations, such as New York or Washington, can be sent over the internet in a matter of moments to cities in the United States, the United Kingdom or around the globe. In a recent case, our network disrupted theirs. We must imagine, however, that digital research is traveling from city to city every single day as terrorist partners help one another pursue their horrific goals."

Bush Discusses Electronic Surveillance and Amending the FISA

9/7. President Bush gave a long speech in Georgia in which he gave a review of the war on terrorism. He discussed terrorist organizations and operations. He discussed the state of U.S. security prior to September 11, 2001. He discussed the overthrow of the Taliban government in Afghanistan, the invasion of Iraq, the enactment of the USA PATRIOT Act, the creation of the Department of Homeland Security (DHS), and the restructuring of the intelligence agencies. He also discussed surveillance of voice communications and e-mail.

During his discussion of the terrorist attacks of September 11, he noted that "two of the first suicide hijackers to join the plot were men named Hazmi and Mihdhar." He continued that Khalid Sheikh Mohammed's "plan was to send these two men to infiltrate the United States and train as pilots, so they could fly the hijacked planes into buildings." Bush said that "the two men flew to Los Angeles in January 2000. There they began carrying out the plot from inside our nation. They made phone calls to planners of the attack overseas ..."

He cited these phone calls as a reason for instituting the National Security Agency's (NSA) extrajudicial surveillance electronic intercepts where one party is within the U.S. and the other is outside.

Bush said that "Another top priority after 9/11 was improving our ability to monitor terrorist communications. Remember I told you the two had made phone calls outside the country. At my direction, the National Security Agency created the Terrorist Surveillance Program. Before 9/11, our intelligence professionals found it difficult to monitor international communications such as those between the al Qaeda operatives secretly in the United States and planners of the 9/11 attacks. The Terrorist Surveillance Program helps protect Americans by allowing us to track terrorist communications, so we can learn about threats like the 9/11 plot before it is too late."

He continued that "Last year, details of the Terrorist Surveillance Program were leaked to the news media, and the program was then challenged in court. That challenge was recently upheld by a federal district judge in Michigan. My administration strongly disagrees with the ruling."

On August 17, 2006, the U.S. District Court (EDMich) issued its opinion [44 pages in PDF] in ACLU v. NSA, enjoining the NSA's extrajudicial electronic intercepts program. See also, story titled "District Court Holds NSA Surveillance Program Violates Constitution" in TLJ Daily E-Mail Alert No. 1,433, August 17, 2006.

Bush said that "We are appealing it, and we believe our appeal will be successful. Yet a series of protracted legal challenges would put a heavy burden on this critical and vital program. The surest way to keep the program is to get explicit approval from the United States Congress. So today I'm calling on the Congress to promptly pass legislation providing additional authority for the Terrorist Surveillance Program, along with broader reforms in the Foreign Intelligence Surveillance Act."

"When FISA was passed in 1978, there was no widely accessible Internet, and almost all calls were made on fixed landlines. Since then, the nature of communications has changed, quite dramatically", said Bush.

"The terrorists who want to harm America can now buy disposable cell phones, and open anonymous e-mail addresses. Our laws need to change to take these changes into account. If an al Qaeda commander or associate is calling into the United States, we need to know why they're calling. And Congress needs to pass legislation supporting this program."

Technology and Broadcast Groups Debate Merits of Draft WIPO Broadcast Treaty

9/7. Representatives of several technology and communications companies and groups held a news conference by teleconference on September 7 to discuss their opposition to the World Intellectual Property Organization's (WIPO) draft broadcast treaty. They also released a statement on September 5. Broadcasters released a statement and letter in rebuttal.

The WIPO's Standing Committee on Copyright and Related Rights will meet on September 11-13, 2006, in Geneva, Switzerland, to consider, among other things, a document [108 pages in PDF] titled "Revised Draft Basic Proposal for the WIPO Treaty on the Protection of Broadcasting Organizations". The WIPO General Assembly may take up the treaty later in the month.

See, full story.

9th Circuit Rules in Interconnection Dispute

9/7. The U.S. Court of Appeals (9thCir) issued its opinion [29 pages in PDF] in Verizon California v. Peevey, affirming in part, and reversing in part, the judgment of the District Court in its review of a state public utilities commission's order in a proceeding arising out of two carriers' failure to negotiate an interconnection agreement.

Verizon California is an incumbent local exchange carrier (ILEC). Pac West Telecomm is a carrier that competed with Verizon following enactment of the Telecommunications Act of 1996. Verizon and Pac West entered into an interconnection agreement in 1996. However, they could not reach an agreement in 2001, and hence, submitted their dispute to the California Public Utilities Commission (CPUC). Michael Peevey, and other CPUC Commissioners, were later named as defendants in subsequent District Court litigation.

Verizon and Pac West referred numerous disputed issues to the CPUC. Perhaps the more significant disputes ultimately resolved by the just issued Court of Appeals opinion are "the identification of internet-bound traffic, and compensation for delivery of telephone calls to internet service providers and for calls that appear to the customer to be made within a local area code but in fact are not."

The Court of Appeals summarized the issues, and its resolution of them. It wrote that the CPUC "ruled in Pac-West抯 favor that (1) during the interim period before a new agreement was in place, the parties' 1996 agreement continued in force such that Verizon must continue to pay reciprocal compensation for delivery of internet-bound calls at pre-existing rates rather than at the lower capped rates set by the Federal Communications Commission (FCC) that apply to new contractual obligations".

Further, the CPUC ruled that "(2) Pac-West could exclude calls to paging services before applying an FCC presumption that when terminated calls are more than three times the number of originated calls, the excess calls are bound for internet service providers".

Also, the CPUC ruled that "(3) Pac-West is entitled to reciprocal compensation for traffic that appears to originate and terminate within a single exchange by virtue of Pac-West抯 assignment of a number that appears to be ``local,创 but in fact is not -- so-called ``Virtual Local创 or ``VNXX创 traffic. The CPUC ruled in Verizon's favor that Verizon is entitled to collect call origination charges for its cost of transporting Virtual Local traffic to a distant point of interconnection."

The Court of Appeals continued that "The district court found that the commission's decision was not arbitrary or capricious."

Both sides appealed. The Court of Appeals held that "We agree with the district court, and therefore affirm all rulings except for the commission's determination that Pac-West may disregard paging traffic for purposes of computing the presumptive volume of traffic bound for an internet service provider (ISP). As to that issue, federal law is to the contrary. Accordingly, we reverse and remand the ruling on calls to paging customers."

This case is Verizon California, Inc. v. Michael Peevey, et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. Nos. 04-16382 and 04-16394, appeals from the U.S. District Court for the Northern District of California, D.C. No. CV-03-03441-CW, Judge Claudia Wilken presiding. Judge Pamela Rymer wrote the opinion of the Court of Appeals. Judges Thomas Nelson and William Fletcher joined.

Bills Introduced

9/7. Sen. Mike DeWine (R-OH) introduced S  3874, the "Terrorist Surveillance Act of 2006".

9/7. Sen. Arlen Specter (R-PA) introduced S  3876, the "National Security Surveillance Act of 2006".

9/7. Sen. Diane Feinstein (D-CA) introduced S  3877, the "Foreign Intelligence Surveillance Improvement and Enhancement Act of 2006''.

People and Appointments

9/7. President Bush nominated Dean Pinkert to be a member of the U.S. International Trade Commission (USITC) for the term expiring December 16, 2015. He is a Senior Attorney at the Department of Commerce (DOC). Previously, he was Trade and Judiciary Counsel for Sen. Robert Byrd (D-WV). Before that, he worked for the law firm of King & Spalding. See White House release and release.

9/7. President Bush nominated Irving Williamson to be a member of the U.S. International Trade Commission (USITC) for the term expiring June 16, 2014. He is President of Williamson International Trade Strategies. Before that, he was Deputy General Counsel in the Office of the U.S. Trade Representative (USTR). See White House release and release.

House Crime Subcommittee Holds Hearing on Proposals to Revise the FISA

9/6. The House Judiciary Committee's Subcommittee on Crime, Terrorism and Homeland Security held a hearing titled "Legislative Proposals to Update the Foreign Intelligence Surveillance Act (FISA)".

The hearing addressed HR 4976, the "NSA Oversight Act", HR 5223, the "Surveillance Activities Commission Act of 2006", HR 5371, the "Lawful Intelligence and Surveillance of Terrorists in an Emergency by NSA Act" (or "LISTEN Act"), HR 5825, the "Electronic Surveillance Modernization Act", S 2453, the "National Security Surveillance Act of 2006", and S 2455, the "Terrorist Surveillance Act of 2006".

Robert Deitz, General Counsel of the National Security Agency (NSA), wrote in his prepared testimony [7 pages in PDF] that the FISA should be revised, but that "surveillance directed at individuals who are not due protection under the Fourth Amendment should be removed from the statute's coverage." He wrote that "the most significant factor in determining whether or not a court order is required ought to be the location of the target of the surveillance, and that other factors such as where the surveillance takes place and the mode of communication surveilled should not play a role in this determination."

He elaborated that "Principally, the issue on which the need for a court order should turn -- but does not turn under the current FISA -- is whether or not the person whose communications are targeted is generally protected by the guarantees of the Constitution. That question, in turn, is largely determined by the location of the target. People inside the United States who are the targets of electronic surveillance, regardless of where the surveillance is conducted or what means are used to transmit a communication, should be the only ones who receive the protection afforded by court approval. At the same time, people outside the United States who are not U.S. persons, again regardless of where the surveillance is effected or the technology employed, should not receive such protection. The FISA should be returned to what we believe was its original purpose of regulating foreign surveillance targeting persons in the United States, not the surveillance of non-U.S. persons overseas who are not entitled to constitutional rights."

He also argued that the government must be able to "compel communications providers to provide information to the Government, even in the absence of a court order", and that communications providers should be given immunity from liability.

Jim Dempsey, of the Center for Democracy and Technology (CDT), wrote in his prepared testimony [17 pages in PDF] that "Something fundamentally different than mere updating is being proposed today. The Administration, caught in its secret violation of FISA, is now seeking radical changes in the law, changes that go farther even than ratifying the President抯 program."

Dempsey continued that "The most radical proposal is that of Chairman Specter, which would effectively gut FISA by repealing its exclusivity provision, making it merely optional for the Administration to seek a court order for electronic surveillance inside the United States against American citizens. The bill co-sponsored by Chairman Sensenbrenner, while it would preserve the nominal exclusivity of FISA, not only would ratify the President抯 program of warrantless surveillance for foreign-to-US communications, but also would permit much more warrantless surveillance of purely domestic calls. The result would be to cast a cloud of constitutional uncertainty over what the Administration claims is a valuable tool in preventing terrorism."

The other witnesses were Steve Bradbury (acting Assistant Attorney General in charge of the Office of Legal Counsel) and Robert Alt (Ashland University).

Thomas Perkins' States That HP's Pretexting Practices Were Probable Unlawful Conduct

9/6. CNET published a collection of paper and e-mail correspondence [7 pages in PDF] related to Hewlett Packard's admission in a Form 8-K filing with the Securities and Exchange Commission (SEC) on September 6, 2006, that it employed the practice of pretexting to spy on its Directors. That is, it fraudulently obtained confidential home phone records of Directors from their carriers. See also, story titled "HP Admits Spying on its Directors via Pretexting to Obtain Confidential Home Phone Records" in TLJ Daily E-Mail Alert No. 1,443, September 6, 2006.

In a letter to the Directors of HP, Thomas Perkins, a former Director who resigned when he learned of the pretexting, wrote that "I resigned in protest from the board of directors of the Hewlett-Packard Company, suddenly and enexpectedly, during a board meeting on May 18th of this year. The Nominating and Governance Committee of the board, which I chaired, had not been informed that the chair of the board had instigated a sub-rosa investigation to uncover the source of an alleged ``leak创 of information to the Internet news site in January 2006. The chair's investigation used the fraudulent method of ``pretexting创 in order to obtain private telephone records of other board members."

He related that since he had written letters to the company, but not received responses, "it appears that my disagreement is not only with the chair, as I initially thought, but also with the Company. As my disagreement concerns probable unlawful conduct, improper board procedures, and breakdowns in corporate governance, it constitutes a disagreement ``on a matter relating to the registrant's operations, policies or practices创 requiring disclosure to the SEC under Item 5.02 of Form 8-K and section 409 of the Sarbanes-Oxley Act of 2002."

Perkins continued that "I am hereby providing the Company notice that I consider the Company's Form 8-K filed on May 22, 2006, relating to my resignation to be defective because it did not describe my objection to and disagreement with the Company's operations, policies and practices as they relate to the chair's improper and likely unlawful investigation. I therefore disagree with the Company statements concerning my resignation and ask that, pursuant to Item 5.02(a)(3)(iii), the Company file this letter and its attachments with the Securities and Exchange Commission."

He concluded this letter my stating that "My history with the Hewlett-Packard Company is long and I have been privileged to count both founders as close friends. I consider HP to be an icon of Silicon Valley, and one of the great companies of the world. It now needs, urgently, to correct its course."

HP has not issued a public statement or release regarding its spying or pretexting. HP did issue a release regarding its "Integrity systems" on September 7. This release pertains to a computer server sold by HP, rather than to HP's ethics or corporate governance practices.

HP Admits Spying on its Directors via Pretexting to Obtain Confidential Home Phone Records

9/6. Hewlett Packard Company filed a Form 8-K with the Securities and Exchange Commission (SEC), which belatedly discloses information regarding the resignation of a former Director, Thomas Perkins, on May 18, 2006. See, full story.

People and Appointments

9/6. Teri Rucker was named Democratic Communications Director for the Senate Commerce Committee. She replaces Andy Davis. She previously worked for AT&T as director of public affairs. Before that, she wrote for National Journal抯 Technology Daily.

9/6. President Bush nominated Robert Steel to be an Under Secretary of the Treasury. He is a Senior Director of The Goldman Sachs Group. See, White House release and release.

More News

9/6. Deputy U.S. Trade Representative Karan Bhatia gave a speech [6 pages in PDF] in which he gave an introductory overview of the work of the Office of the U.S. Trade Representative (USTR) to promote trade in the music industry. He touched briefly on market access and rules for secure e-commerce internationally. He then focused on the USTR's efforts to protect intellectual property interests in music, particularly with respect to the Peoples Republic of China and Russia.

9/6. The Office of the U.S. Trade Representative (USTR) announced that it has adjusted the responsibilities of two of USTR components. The USTR stated in a release that the USTR's recently created Office of Intellectual Property (OIP) will also assume responsibility for "innovation policy issues related to the pharmaceutical and medical technology industries", which had previously been handled by the USTR's Southeast Asia Office (SAO). The OIP is headed by Victoria Espinel. See also, June 23, 2006, release announcing the creation of the OIP. The SAO is headed by Barbara Weisel.

9/6. Sen. Tom Carper (D-DE) and Sen. George Voinovich (R-OH) introduced S  3846, the "Federal Employees Electronic Personal Health Records Act of 2006".

9/6. The Progress and Freedom Foundation (PFF) released a paper [7 pages in PDF] titled "Do's and Dont's for Global Media Regulation: Empowering Expression, Consumers and Innovation". The author is the PFF's Patrick Ross. See also, PFF release. The paper warns that "democracies around the world are demonstrating a desire to impose restrictions on the nature and distribution of online content", and reviews recent developments in Europe, Australia, and Canada. The paper makes these recommendations for regulators:
  • Do enforce existing child-protection laws.
  Don抰 distinguish between types of content delivery.
  Do harmonize by deregulating down.
  Don抰 discourage migration of content.
  Do support intellectual property rights.

Go to News from September 1-5, 2006.