8th Circuit Rules in Section 1030 Case

2/23. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in USA v. Trotter, affirming a conviction in a Section 1030 case. The Court of Appeals rejected Trotter's argument that Section 1030 could not be used to prosecute him because of the absence of interstate commerce.

John Trotter used a home computer with internet access to access the computers of his former employer, the Salvation Army (SA), without authorization. The SA is a non-profit entity. Its computer are connected to the internet, and used to communicate with computers in other states. However, both Trotter and the SA computer which he accessed were in the state of Missouri. He deleted files, temporarily shut down a computer operated phone system, and caused other damage. He was charged with violation of 18 U.S.C. § 1030(a)(5)(A)(i). He pled guilty, reserving the right of appeal.

This subsection provides in part that "(a) Whoever ... (5)(A)(i) knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer ... shall be punished ..."

Trotter argued on appeal that there is no interstate commerce component in his case. The Court of Appeals affirmed the conviction. It held that it does not matter that the computers affected were owned by a non-commercial rather than a commercial entity.

The Congress, under the framework of the Constitution, can only legislate on subjects enumerated in Article I of the Constitution. There is no general grant of criminal law making authority. In contrast, states have general criminal law making authority.

However, the Congress can enact criminal statutes that are incidental to other enumerated powers. One of these is the power to regulate interstate commerce. The Congress often acts as though this were a general grant of criminal law making authority. As the present case illustrates, the federal courts allow the Congress, and federal prosecutorial entities, great latitude in asserting that conduct is in interstate commerce.

The Court of Appeals wrote that "The Commerce Clause of the Constitution grants Congress the power to regulate interstate commerce. ... This includes the ability to regulate channels of interstate commerce, instrumentalities of interstate commerce, and those activities that substantially affect interstate commerce. ... No additional interstate nexus is required when instrumentalities or channels of interstate commerce are regulated."

The Court of Appeals added that "The Salvation Army’s status as a not-for-profit entity has no bearing on our analysis; it is the characteristics of the computer or computer network, not the entity using the network, that is the focus of the statute."

The Court also wrote that it relied upon the U.S. Court of Appeals (7thCir) 2005 opinion in United States v. Mitra, which is reported at 405 F.3d 492. See also, story titled "7th Circuit Affirms Broad Reach of Section 1030" in TLJ Daily E-Mail Alert No. 1,119, April 20, 2005.

In the 7th Circuit case, Mitra, a graduate student at the University of Wisconsin, transmitted a radio signal that prevented the communications system for police, fire, ambulance, and other emergency communications in Madison, Wisconsin, from operating. He accessed no computers. He sent to computer code. However, computer chips are used in the management of the emergency communications system in Madison.

The Court of Appeals wrote in the present opinion that "The Seventh Circuit held the communication system harmed by the defendant’s conduct was protected by the statute because it was engaged in interstate communication and, specifically, it was engaged in communication on the electromagnetic spectrum regulated by the Federal Communications Commission. ... Like the Internet, the spectrum is a channel of interstate commerce subject to regulation by Congress. ... In Mitra, the defendant argued the intrastate nature of his attack took it outside the constitutional applicability of the statue. Judge Easterbrook, writing for the court, explained the location of the attack is not determinative because ``[o]nce the computer is used in interstate commerce, Congress has the power to protect it from a local hammer blow, or from a local data packet that sends it haywire.´´ ... Likewise, the nature of the organization using the computer is irrelevant; once the computer is used in interstate commerce, Congress has the power to protect it."

In both Trotter and Mitra, neither the defendants nor the victims were engaged in commerce. Neither case involved an activity that crossed state borders. Yet, both courts held that the the defendants' actions satisfied the interstate commerce requirement. Moreover, these opinions are consistent with court opinions in non-Section 1030 cases.

However, the 7th Circuit's opinion in Mitra was notable to the extent that it essentially construed spectrum interference to be a form of computer hacking. In that case, devices that utilized the spectrum contained computer chips. But now a wide variety of spectrum related devices include chips. And now, the 8th Circuit has cited the Mitra case with approval.

This case is USA v. John Larkin Trotter, U.S. Court of Appeals for the 8th Circuit, No. 05-4202, an appeal from the U.S. District Court for the Eastern District of Missouri, Judge Rodney Sippell presiding.

1st Circuit Rules in Section 230 Case

2/23. The U.S. Court of Appeals (1stCir) issued its opinion in Universal Communication Systems v. Lycos, a case involving Section 230 interactive computer service immunity. The Court of Appeals affirmed the District Court, which had held that Lycos and others are entitled to immunity under Section 230.

The Court of Appeals rejected attempts by the plaintiffs to get around Section 230 by pleading trademark dilution (intellectual property claims are an exception to Section 230 immunity), and federal cyberstalking (which is also an exception), and state securities fraud and cyberstalking claims.

Universal Communication Systems, Inc. is a publicly traded company. Michael Zwebner is its Chairman and CEO.

Lycos operates web sites, including Quote.com and RagingBull.com, which allow subscribing users to create message boards, and post comments regarding companies.

Messages were posted to a UCS message board on the RagingBull.com web site that pertained to the financial condition, business prospects, and management of UCS. UCS and Zwebner allege that these were false and defamatory. However, they did not plead slander or defamation.

There is a long line of cases holding that interactive computer services are not liable for defamation by third party posters. Rather, in the Court of Appeals' words, "UCS attempted to plead around this Section 230 statutory immunity".

UCS and Zwebner filed a complaint in U.S. District Court (SDFla) against Lycos and other interactive service services. USC and Zwebner initially alleged for claims: (1) fraudulent securities transactions under Florida statute, (2) cyberstalking in violation of 47 U.S.C. § 223, (3) dilution of trade name under Florida law, and (4) cyberstalking under Florida law.

Pursuant to a forum selection clause in a Lycos subscriber agreement, the case was transferred to the U.S. District Court (DMass). The District Court dismissed the complaint.

Statute. The relevant portions of 47 U.S.C. § 230 are as follows:

47 U.S.C. § 230(c)(1) provides that "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider".

However, 47 U.S.C. § 230(e)(2) then provides that "Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property". (The trademark dilution claim is an intellectual property claim.)

Also, 47 U.S.C. § 230(e)(1) provides, in part, that "Nothing in this section shall be construed to impair the enforcement of section 223 ... of this title, ... or any other Federal criminal statute." (The federal cyberstalking language in included within Section 223.)

47 U.S.C. § 230(f)(2) provides that an "interactive computer service" is "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions".

Also, 47 U.S.C. § 230(f)(3) provides that an "information content provider" is "any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service".

Court of Appeals Holding. The Court of Appeals held that Lycos is an "interactive computer service" within the meaning of the statute. It rejected USC's argument that it failed to qualify on the basis that it did not provide internet access to customers.

It held that the anonymous poster was an "information content provider", and that the state cyberstalking and securities claims sought to treat Lycos of the publisher of information provided by this information content provider.

The Court of Appeals also affirmed the dismissal of the trademark dilution claim. It first wrote that "Claims based on intellectual property laws are not subject to Section 230 immunity." Instead, it affirmed because the alleged used of a protected mark (that is, the use of the UCSY ticker symbol in the message board) was not actionable absent Section 230 immunity, "because of the serious First Amendment issues that would be raised by allowing UCS's claim here".

The Court of Appeals continued that "The injury that UCS alleges, however, is not a form of trademark injury. Trademark injury arises from an improper association between the mark and products or services marketed by others. ... But any injury to UCS ultimately arises from its being criticized on the Raging Bull site. To premise liability on such criticism would raise serious First Amendment concerns."

The Court of Appeals added that "To be sure, UCS does allege that in this case the criticism is false and misleading. But while such an allegation might be relevant to a defamation claim, it is not determinative of whether UCS's allegations can support a trademark claim. If the injury alleged is one of critical commentary, it falls outside trademark law, whether the criticism is warranted or unwarranted."

The Court of Appeals also affirmed the dismissal of the federal cyberstalking claim. This is a recently enacted prohibition with a short and unusual legislative history. During the First Session of the 109th Congress, the House Judiciary Committee (HJC) and its staff produced a cyber stalking bill. This carefully prepared bill did not become law. Rather, a much different version pushed by Rep. Jim McDermott (D-WA) was substituted for the HJC version during last minute negotiations and vote trading over HR 3402 (109th Congress), a Department of Justice reauthorization bill. The McDermott language makes it a federal crime to use the internet to "annoy" someone. The bill also includes the internet within the definition of "telecommunications device" for the purpose of 47 U.S.C. § 223.

For an explanation of this late amendment, see story titled "Bush Signs DOJ Reauthorization Bill" in TLJ Daily E-Mail Alert No. 1,284, January 6, 2006. See, subsection titled "The Internet as a Telecommunications Device".

The Court of Appeals affirmed the District Court's dismissal of the Section 223 claim, but only the basis that UCS did not raise this on appeal. The Court of Appeals wrote that "On the federal cyberstalking claim under 47 U.S.C. § 223, in addition to finding the claim barred by Section 230, the district court also found that the cyberstalking statute does not provide a private right of action. UCS does not challenge this dispositive ruling on appeal, so we affirm the dismissal of the claim on that basis, expressing no view on the appropriateness of applying Section 230 immunity to a putative civil claim under 47 U.S.C.§ 223."

Hence, the Court of Appeals left unresolved the question of whether there is a private right of action under Section 223. However, Section 223 is clearly a criminal prohibition which includes no express private right of action. However, were a court to create a private right of action under Section 223, then the McDermott internet annoyance language might provide a means to evade a Section 230 dismissal, because Section 223 is an exception to a Section 230 immunity.

See also, stories titled "The District Court District Court Holds Rep. McDermott Violated Wiretap Act" in TLJ Daily E-Mail Alert No. 964, August 23, 2004, and "Court of Appeals Holds that Rep. McDermott Violated Wiretap Act" in TLJ Daily E-Mail Alert No. 1,339, March 30, 2006.

This case is Universal Communication Systems, Inc. and Michael Zwebner v. Lycos, Inc., et al., U.S. Court of Appeals for the 1st Circuit, App. Ct. No. 06-1826, an appeal from the U.S. District Court for the District of Massachusetts, Judge Robert Keeton presiding.

People and Appointments

2/23. Federal Communications Commission (FCC) Chairman Kevin Martin, who is from the state of North Carolina, announced his intent to appoint Derek Poarch, who is also from North Carolina, to be the FCC’s Public Safety and Homeland Security Bureau Chief. Poarch is currently Director of Public Safety and Chief of Police at the University of North Carolina at Chapel Hill. See, FCC release [PDF].

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2/23. Ed Black, head of the Computer & Communications Industry Association (CCIA), stated in a release that the February 22, 2007, trial jury's Special Verdict Form [PDF] in Lucent v. Microsoft "is another sign that our patent system has run off the rails ... instead of promoting innovation, patents now threaten the innovation process and those companies that focus primarily on creating and using new products." This CCIA release further states that "Even though Microsoft paid $16 million in licensing fees to the companies that developed the MP3 standard in the early 1990s, they now have to pay a remarkable $1.5 billion to a company that didn’t participate in the standard/licensing process back then, and Microsoft is only the first target among the thousands of producers that have adopted the MP3 standard." See also, the CCIA's paper [3 MB PDF] titled "Patent Reform for the Digital Economy".

2/23. The National Telecommunications and Information Administration (NTIA) issued a release [PDF] that discussed management of the usTLD locality space.

2/23. The Federal Communications Commission (FCC) held a hearing on regulation of media ownership in Harrisburg, Pennsylvania. See, statement [PDF] by FCC Chairman Kevin Martin, statement [PDF] by Commissioner Deborah Tate, statement [PDF] by Commissioner Robert McDowell, statement [PDF] by Commissioner Jonathan Adelstein, and statement [PDF] by Commissioner Michael Copps. Copps devoted much of his statement to the effect of media consolidation on the transparency of state and local governments. He did not discuss the lack of transparency of the FCC's activities and operations, or his own efforts to further reduce FCC transparency by seeking a loophole in the federal open meetings statute for the FCC. See, story titled "Copps and Stevens Advocate Less Transparency at FCC" in TLJ Daily E-Mail Alert No. 1,272, December 14, 2005. The relevant statute, which is codified at 5 U.S.C. § 552b, requires federal agencies to hold their meetings in public, and give notice "at least one week before the meeting, of the time, place, and subject matter of the meeting". Transparency is generally understood to refer to the extent to which government entities make their hearings, deliberations, and other processes open, observable, and receptive to public input, and the extent to which agencies promptly reduce all decisions, and substantive and procedural laws and rules, to readily available and understandable texts. However, Copps advanced the argument that transparency is a function of the number of reporters. He argued that media consolidation reduces the number of reporters who write about state and local government, and this reduces transparency. He stated that "That's what a vigorous press is all about. It brings transparency and accountability to government." He said that "A merger between two newsrooms usually means one less statehouse reporter."

Commerce Secretary Discusses Trade with India

2/22. Secretary of Commerce Carlos Gutierrez gave a speech in Washington DC to the U.S.-India High Technology Cooperation Group.

Gutierrez (at right), who just returned from a trip to India, stated that "I talked with government business leaders about opening India's market further, and forging ahead with a reform agenda to attract more investment and maintain the strong pace of growth."

He reviewed the relaxation of US controls on exports to India. He also said that "There are other reforms -- opening markets in sectors where obstacles remain, further reducing tariffs and getting tougher on enforcing IPR and protecting IP and pharmaceutical test data -- that will benefit India's economy and consumers, while maintaining the current growth trajectory."

He also discussed Doha round trade negotiations. He said that "In my meetings in India , I stressed the importance of India's full participation in the Doha round of global trade talks. Simply put: India's leadership is required to achieve an agreement. India has a tremendous opportunity to play an active and positive role in pushing these talks ahead. We are willing to make difficult choices. But we have a shared responsibility to make the round a success."

He also said that "we ... are working with the new Congress to renew President Bush's Trade Promotion Authority, which is currently set to expire at the end of June."

Jury Finds Patent Infringement in Lucent v. Microsoft

2/22. A trial jury of the U.S. District Court (SDCal) returned a Special Verdict Form [PDF] in Lucent v. Microsoft, finding patent infringement by Microsoft, and awarding $1.52 Billion in damages to Lucent, which is now Alcatel-Lucent.

Tom Burt, Microsoft's Deputy General Counsel, stated in a release that "We think this verdict is completely unsupported by the law or the facts. We will seek relief from the trial court, and if necessary appeal." He added that "Like hundreds of other companies large and small, we believe that we properly licensed MP3 technology from its industry recognized licensor -- Fraunhofer. The damages award seems particularly outrageous when you consider we paid Fraunhofer only $16 million to license this technology." Burt also stated that "today's outcome is disappointing for us and for the hundreds of other companies who have licensed MP3 technology. We are concerned that this decision opens the door for Alcatel-Lucent to pursue action against hundreds of other companies who purchased the rights to use MP3 technology from Fraunhofer, the industry-recognized rightful licensor."

This case is Lucent Technologies, Inc., and Multimedia Patent Trust v. Microsoft Corporation, et al., U.S. District Court for the Southern District of California, D.C. Nos. 02cv2060-B, 03cv0699-B, and 03cv1108-B.

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2/22. The National Telecommunications and Information Administration (NTIA) and the Department of Homeland Security (DHS) released a memorandum of understanding [PDF] regarding implementation of a public safety interoperable communications grant program. The NTIA wrote in a release that this MOU provides that the "DHS’s Office of Grants and Training will provide grants management services to NTIA for the PSIC grant program. DHS, among other things, will: (1) develop policies, procedures and regulations to govern the PSIC program; (2) develop a timetable to complete actions so that grants may be awarded by the established dates; (3) develop and distribute program application and guidance materials; (4) publicize the availability of grant opportunities; (5) provide technical assistance to applicants; (6) notify recipients of grant awards; (7) award grant funds by September 30, 2007; and (8) conduct site visits to verify progress and completion of funded projects." This grant program was created by the Digital Television Transition and Public Safety Act of 2005, which was Section 3006 of the Deficit Reduction Act of 2005, which is now Public Law No. 109-171. The MOU was executed on February 16, and released on February 22.

FTC Announces Workshop and Seeks Comments on ID Verification and Authentication

2/21. The Federal Trade Commission (FTC) announced that it will host a two day workshop titled "Proof Positive: New Directions in ID Authentication" on April 23-24, 2007. See, FTC release.

The FTC seeks panel participants. The deadline to submit requests to the FTC to participate as panelists is March 9, 2007. The FTC also seeks comments on the identification authentication process. The deadline to submit comments is March 23, 2007.

The FTC seeks comments "on ways to improve authentication processes in order to reduce the incidence of identity theft". The FTC also released a notice [PDF] to be published in the Federal Register that propounds numerous questions.

The workshop will be held at the FTC's Satellite Building Conference Center, 601 New Jersey Ave., NW.

7th Circuit Approves Use of FISA Wiretap in Domestic Criminal Case Involving Unlicensed Export of Semiconductors

2/21. The U.S. Court of Appeals (7thCir) issued its opinion [5 pages in PDF] in USA v. Wen, affirming a conviction obtained following the denial of a motion to suppress evidence derived from a wiretap authorized under the FISA, rather than Title III.

Ning Wen was convicted following a jury trial in the U.S. District Court (EDWisc) of the crime of violating 50 U.S.C. § 1705(b), which is part of the export control regime. The Court of Appeals opinion does not disclose the nature of the exports.

However, the Department of Justice (DOJ) wrote in a release following his sentencing by the District Court on January 18, 2006, that he exported "primarily semi-conductor chips". Also, records of a related administrative proceeding before the Bureau of Industry and Security (BIS) state that he exported "electronic components and semiconductor chips" to an entity in the People's Republic of China without a license. See, January 31, 2005, Order Temporarily Denying Export Privileges [6 pages in PDF].

There is a web page for a Ning Wen, of the Communications and Networks Lab, Dept. Electrical & Computer Engineering, Northwestern University.

Section 1705(b) provides, in full, that "Whoever willfully violates, or willfully attempts to violate, any license, order, or regulation issued under this chapter shall, upon conviction, be fined not more than $50,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both."

The District Court admitted evidence derived from a wiretap. The District Court denied Wen's motion to suppress this evidence. The US had not obtained a Title III order from the District Court authorizing it to conduct this wiretap. However, the US had obtained a order under the Foreign Intelligence Surveillance Act (FISA), which is codified at 50 U.S.C. §§ 1801-1862.

The Court of Appeals affirmed the conviction. It held that the admission of this evidence violated neither the FISA statute, nor the 4th Amendment of the Constitution.

Prior to enactment of the USA PATRIOT Act in late 2001, FISA orders were available to the government only when the "primary purpose" was collecting information about foreign intelligence operations and terrorism. Title III warrants were required in criminal cases.

A Title III wiretap order, which enables law enforcement agencies to obtain the content of a phone call or e-mail, is issued by a judge upon a showing of probable cause. Title III is a reference to Title III of the Omnibus Crime Control and Safe Streets Act of 1968. This is codified at Chapter 119 of Title 18 of the U.S. Code, 18 U.S.C. §§ 2510-2522.

The 2001 Act changed the "primary purpose" requirement to "significant purpose". See, 50 U.S.C. § 1804 (a)(7)(B). This enables, as this case demonstrates, criminal prosecutors to obtain FISA orders for the use of evidence obtained thereby in domestic cases, provided that they can articulate a foreign intelligence or terrorism connection.

These FISA warrants are obtained from a different court, and with greater secrecy. For example, in the present case, the proceeding on the motion to suppress was not adversarial. The District Court considered the matter, in camera, upon affidavits submitted by the government. Again, on appeal, these same affidavits were reviewed by the court in camera. The courts' reviews were both ex parte and secret.

The Court of Appeals first held that the admission into evidence did not violate the relevant statute. It relied upon an opinion of the FISA Court of Review. See, opinion in In re: Sealed Case No. 02-001, 310 F.3d 717 (F.I.S. Ct. Rev. 2002).

The Court of Appeals wrote that "The Foreign Intelligence Surveillance Court of Review has concluded that the amended statute allows domestic use of intercepted evidence as long as a ``significant´´ international objective is in view at the intercept's inception."

Thus, the Court of Appeals reasoned that the issue is whether acquiring international intelligence was a "significant purpose" of the intercept. It wrote that it reviewed the affidavits in camera. It did not quote or describe the contents, but it concluded that "the statutory standards for an intercept order have been satisfied".

The Court of Appeals also held that the admission into evidence did not violate the 4th Amendment of the Constitution, which provides, in full, that "The right the of people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."

The Court of Appeals wrote that "The evidence narrated in the affidavit establishes probable cause to believe that phone lines were being used to discuss or plan violations of 50 U.S.C. §1705(b)."

The Court of Appeals added that "Probable cause to believe that a foreign agent is communicating with his controllers outside our borders makes an interception reasonable. If, while conducting this surveillance, agents discover evidence of a domestic crime, they may use it to prosecute for that offense. That the agents may have known that they were likely to hear evidence of domestic crime does not make the interception less reasonable than if they were ignorant of this possibility."

This case is U.S.A. v. Ning Wen, U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 06-1385, an appeal from the U.S. District Court for the Eastern District of Wisconsin, D.C. No. 04-CR-241, Judge William Griesbach presiding. Judge Frank Easterbrook wrote the opinion of the Court of Appeals, in which Judges Bauer and Evans joined.

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2/21. The Department of Homeland Security (DHS) announced that it has initiated a program titled "DHS Traveler Redress Inquiry Program", or "DHS TRIP". The DHS stated in a release that this web based process "provides a way for legitimate travelers to address situations where individuals believe they have been incorrectly delayed, denied boarding, identified for additional screening, or have otherwise experienced difficulties when seeking entry into the country. The program also facilitates redress information sharing among the department’s component agencies and creates internal performance measures to monitor progress."

2/21. The Executive Office of the President's (EOP) Office of Management and Budget (OMB) released a report [41 pages in PDF] titled "Commercial Spectrum Enhancement Act: Report to Congress on Agency Plans for Spectrum Relocation Funds".

2/21. The Federal Communications Commission (FCC) issued a release [PDF] in which it solicits applications from new and recent law school graduates to participate in its 2007 Attorney Honors Program. The deadline for applications is Wednesday, March 21, 2007.

2/21. The Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking (NPRM) [20 pages in PDF] in its proceeding titled "In the Matter of Implementation of the Cable Television Consumer Protection and Competition Act of 1992 Development of Competition and Diversity in Video Programming Distribution: Section 628(c)(5) of the Communications Act: Sunset of Exclusive Contract Prohibition". Section 628(c)(5) is codified at 47 U.S.C. § 548(c)(5). Subsection (c)(2)(D) provides that the FCC regulations shall, "with respect to distribution to persons in areas served by a cable operator, prohibit exclusive contracts for satellite cable programming or satellite broadcast programming between a cable operator and a satellite cable programming vendor in which a cable operator has an attributable interest or a satellite broadcast programming vendor in which a cable operator has an attributable interest, unless the Commission determines (in accordance with paragraph (4)) that such contract is in the public interest." Then, Subsection (c)(5) provides that "The prohibition required by paragraph (2)(D) shall cease to be effective 10 years after October 5, 1992, unless the Commission finds, in a proceeding conducted during the last year of such 10-year period, that such prohibition continues to be necessary to preserve and protect competition and diversity in the distribution of video programming." Initial comments will be due 30 days after publication of a notice in the Federal Register, which publication has not yet occurred. Reply comments will be due 45 days after such publication. This item is FCC 07-7 in MB Docket No. 07-29.

2/21. Federal Reserve Board (FRB) Vice Chairman Donald Kohn (at right) gave a speech in Washington DC titled "Financial Stability: Preventing and Managing Crises". He stated that "New computing and telecommunications technologies, along with the removal of legal and regulatory barriers to entry have heightened competition among a wider variety of institutions and made the allocation of funds from savers to investors more efficient. Technology also has helped financial market participants better understand the risks embedded in assets and develop instruments and systems for managing those risks, both individually and on a portfolio basis. Together, these developments have allowed suppliers and demanders of funds and the intermediaries that stand between them to diversify their risk exposures, reduce their vulnerability to sector- or region-specific shocks, and become far less dependent on specific service providers."

2/21. The Progress and Freedom Foundation (PFF) released a paper [PDF] titled "Copy Protection and Games: Lessons for DRM Debates and Development". The author is the PFF's Solvieg Singleton. She argues that "Content producers do respond to consumer complaints about clumsy copy protection". She also concludes that "Interoperability with general purpose media increases piracy risks for content", and that "Hardware-linked protection is most durable." Finally, she argues that "Consumers do not always demand what advocates think they ought to demand. Consumers will buy special-purpose hardware when it is easy to use and not too expensive. They do not demand interoperability or the right to make backup copies at all costs."

Go to News from February 16-20, 2007.