TLJ News from June 6-10, 2007

House Financial Services Committee Holds Hearing on Internet Gambling

6/8. The House Financial Services Committee (HFSC) held a hearing titled "Can Internet Gambling Be Effectively Regulated to Protect Consumers and the Payments System?" Witnesses disputed whether or not the age and location of internet gamblers can be verified.

Rep. Barney Frank (D-MA), the Chairman of the HFSC, is the sponsor of HR 2046 [LOC | WW], the "Internet Gambling Regulation and Enforcement Act of 2007".

See, full story.

FCC Announces Members and Mission of Consumer Advisory Committee

6/8. The Federal Communications Commission (FCC) announced that it has rechartered its Consumer Advisory Committee (CAC), and that FCC Chairman Kevin Martin has appointed its members.

The FCC's Public Notice [PDF] (DA 07-2426) lists the 26 persons appointed to the CAC. Debra Berlyn of the Digital Television Transition Coalition will chair the CAC. Verizon, Echostar, Cablevision and the Consumer Electronics Association (CEA) will all have representatives on the CAC.

Rep. John Dingell (D-MI), the Chairman of the House Commerce Committee (HCC), stated in a release that "It is most curious, however, that there is no representative from the broadcasting industry on a committee that is supposed to advise on policy affecting the digital television transition. I hope the Commission will consider correcting this omission as it proceeds, and I look forward to receiving its full consumer education plan shortly."

The FCC states that a "principal focus" of the CAC will be "the digital television transition". It will also address "Consumer protection and education (e.g., cramming, slamming, consumer friendly billing, detariffing, bundling of services, Lifeline/Linkup programs, customer service, privacy, telemarketing abuses, and outreach to underserved populations, such as Native Americans and persons living in rural areas)." (Parentheses in original.)

The CAC will also address "Access by people with disabilities (e.g., telecommunications relay services, video description, closed captioning, accessible billing and access to telecommunications products and services)."

It will also address the "Impact upon consumers of new and emerging technologies (e.g., availability of broadband, digital television, cable, satellite, low power FM, and the convergence of these and emerging technologies)."

The CAC will next meet on Friday, August 10, 2007, in the FCC's Commission Meeting Room.

More FCC News

6/8. The Federal Communications Commission (FCC) released a Public Notice [5 pages in PDF] (DA 07-2417) that sets deadlines to submit comments or petitions to deny (July 9, 2007) and responses or oppositions (July 24, 2007) pertaining to the FCC's review of the proposed merger of XM Satellite Radio Holdings, Inc. and Sirius Satellite Radio, Inc.

6/8. The Federal Communications Commission (FCC) announced that it will hold a hearing regarding broadcast localism in Portland, Maine, on Thursday, June 28, 2007. See, FCC release [PDF].

6/8. The Federal Communications Commission (FCC) announced that it has rechartered its Intergovernmental Advisory Committee (IAC). The FCC stated in a Public Notice [2 pages in PDF] (DA 07-2427) that the IAC is comprised of 15 representatives from local, state and tribal governments and advises the FCC "on a range of telecommunications issues for which their governments explicitly or inherently share responsibility or administration" with the FCC. These include the transition to digital television, "homeland security and public safety; impact of new and emerging technologies, provision of telecommunications services in rural and underserved areas, broadband deployment, access by persons with disabilities and consumer education and outreach generally."

More News

6/8. The National Telecommunications and Information Administration (NTIA) released a report titled "A Public Safety Sharing Demonstration", which pertain to Washington DC's Wireless Accelerated Responder Network (WARN). This report states that "The WARN system is a broadband, public safety wireless network providing citywide coverage to the District. It was created to fill a need of first responders to exchange large amounts of data wherever emergency services are required. WARN provides high bandwidth access to streaming video, large files and images, specialized emergency response databases as well as standard desktop applications such as email and instant messaging. The system operates in the 700 MHz band using an experimental license provided by the Federal Communications Commission (FCC). It includes 12 fixed transmission sites and roughly 200 subscribers." The report continues that this system, which became operational in January of 2005 "improved collaboration between federal and District agencies", and "revealed several areas to improve future public safety solutions, including the need for increased broadband coverage." See also, NTIA release.

Rep. McDermott Introduces Bill to License and Tax Internet Gambling

6/7. Rep. Jim McDermott (D-WA) introduced HR 2607 [LOC | WW] the "Internet Gambling Regulation and Tax Enforcement Act of 2007", a bill to amend the Internal Revenue Code to provide for the licensing of internet gambling operators that pay state and federal taxes.

This bill was referred to the House Ways and Means Committee. Rep. McDermott is a member. The bill has no original cosponsors.

This bill would give the Director of the Department of the Treasury's (DOT) Financial Crimes Enforcement Network (FinCEN) authority to license any "Internet gambling operator". It further provides that "The Director shall grant licenses under this subchapter if, in the Director's sole discretion, the applicant meets the criteria set by the Director and is generally fit to engage in the business of Internet gambling."

The bill does not elaborate on the meaning of "fit to engage". Rather, it focuses on collection of taxes.

The bill provides that "No person shall receive a license ... unless the person implements the following requirements with respect to any Internet bet or wager -- (A) appropriate mechanisms to ensure that all taxes relating to Internet gambling due to Federal and State governments from individuals engaged in Internet gambling are collected at the time of any payment of any proceeds of Internet gambling; (B) appropriate mechanisms to ensure that all taxes relating to Internet gambling due to Federal and State governments from any persons licensed under this Act are collected as required by law ..."

See also, story titled "En Banc Panel of DC Circuit Affirms Judgment that Rep. McDermott Violated the Wiretap Act" in TLJ Daily E-Mail Alert No. 1,573, May 2, 2007.

5th Circuit Rules in Speech Case

6/7. The U.S. Court of Appeals (5thCir) issued its opinion [16 pages in PDF] in Pruett v. Harris County, a first amendment freedom of speech case. The Court of Appeals accepted most parts of a constitutional challenge to a Texas statute that prevented bail bondsmen from notifying persons of arrest warrant information that Texas publishes on the internet. However, the Court upheld the statute's ban on communications after 9:00 PM.

Carl Pruett and Scott Martin are bail bondsmen. Harris County is a political subdivision of the state of Texas. Houston is in Harris County. It maintains and publishes the Harris County Justice Information Management System (JIMS), which is accessible via the internet. It contains, among other things, names and addresses of persons arrested and subjects of arrest warrants. Although, Harris County delays publication of arrest warrant information information for 48 after issuance of the warrant. Pruett and Martin use this JIMS data to notify persons of their bail bond services.

The state of Texas enacted a statute that limits the legality of this practice. The statute provides that "A bail bond surety, an agent of a corporate surety or an employee of the surety or agent may not make, cause to be made, or benefit from unsolicited contact:
  (1) through any means, including in person, by telephone, by electronic methods, or in writing, to solicit bonding business related to an individual with an outstanding arrest warrant that has not been executed, unless the bail bond surety or agent for a corporate surety has an existing bail bond on the individual; or
  (2) in person or by telephone to solicit bonding business: (A) that occurs between the hours of 9 p.m. and 9 a.m.; or (B) within 24 hours after: (i) the execution of an arrest warrant on the individual; or (ii) an arrest without a warrant on the individual."

The rationale of the legislature is primarily public safety. That is, if persons are notified by bail bondsmen that there are outstanding warrants, they become flight risks, they are more likely to physically harm officers or others, and they are more likely to destroy evidence.

Yet, the statute restricts communications regarding information that the state has already made publicly available on the internet; it restricts communications after arrest; it also restricts communications in situations where the state has sent notice to a person that there is an arrest warrant.

The other rationale is protection of privacy of the persons contacted by bail bondsmen.

Pruett and Martin filed a complaint in U.S. District Court (SDTex) against Harris County and the Harris County Bail Bond Board alleging, among other things, violation of the First Amendment free speech clause.

The District Court granted summary judgment to the Pruetts and enjoined enforcement of the statute.

The Court of Appeals affirmed in part and reversed in part.

The Supreme Court has created classes of speech, including commercial speech. See, Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of New York, 447 U.S. 557 (1980), in which the Supreme Court described a four prong test to be applied to commercial speech.

The Supreme Court wrote, "In commercial speech cases, then, a four-part analysis has developed. At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest."

However, while the speech in the present case relates to bail, and the 8th Amendment provides that "Excessive bail shall not be required ...", the Court of Appeals held that the speech at issue is commercial speech. Hence, it accorded it a lower level of protection, pursuant to the Supreme Court's opinion in Central Hudson.

The Court of Appeals also determined that the restraint at issue is not content based.

The Court of Appeals held that the first part of the statute, which restricts communications to only those persons with whom the bondsmen already does business, fails to satisfy the Central Hudson test.

The Court of Appeals also held that the second part of the statute's 24 hour communications ban also fails to satisfy the Central Hudson test. However, it held that the second part of the statute's ban on communications after 9:00 PM survives Central Hudson scrutiny.

This case is Carl Pruett and Scott Martin v. Harris County Bail Bond Board and Harris County, U.S. Court of Appeals for the 5th Circuit, D.C. No. No. 05-20714, an appeal from the U.S. District Court for the Southern District of Texas. Judge Higginbotham wrote the opinion of Court of Appeals, in which Judges Wiener and Clement joined.

People and Appointments

6/7. Johnnie Frazier, Inspector General of the Department of Commerce (DOC), resigned. See, Frazier's letter [PDF] to President Bush. See also, story titled "House Commerce Committee Leaders Write Gutierrez about Alleged Misconduct in Department of Commerce OIG" in TLJ Daily E-Mail Alert No. 1,572, May 1, 2007. Rep. Bart Stupak (D-MI), Chairman of the House Commerce Committee's (HCC) Subcommittee on Oversight and Investigations, stated in a release that "Johnnie Frazier's resignation merely confirms our worst fears that the fraud and misconduct at the office runs from the top on down throughout the ranks of the office ... Our investigation has already confirmed some of the allegations beyond this first one dealing with whistleblower retaliation that caused his forced resignation. For example, we have confirmed the trip by Johnnie Frazier and five of his subordinates to Atlantic City to gamble while on government time and per diem. Instead of attending a government sponsored conference, apparently the Inspector General and his staff thought their time would be better spent on slots and roulette. We are not done with this allegation nor the myriad other complaints we continue to receive about him and his office."

6/7. William Archey, head of the AeA, will retire. The AeA has not yet named a replacement. AeA is an acronym for American Electronics Association, a name no longer used by the group.

6/7. The Senate Judiciary Committee (SJC) approved the nomination of Robert James Jonker to be a Judge of the U.S. District Court for the Western District of Michigan. See, Congressional Record, June 7, 2007, at Page S7332.

6/7. David Krone, EVP of the National Cable & Telecommunications Association (NCTA), will leave the NCTA on October 1, 2007. See, NCTA release.

6/7. Gayle Osterberg of 133 Public Affairs was named Director of Communications for the Copyright Alliance (CA). See, CA release.

More News

6/7. The U.S. District Court (DC) issued a Memorandum Opinion [10 pages in PDF] in Worldwide Network Services v. DynCorp International, a case arising out of contracts to provide communications and information technology services in Iraq and Afghanistan. This opinion only addresses the effect of forum selection clauses. The District Court (DC) transferred this case to the U.S. District Court for the Eastern District of Virginia. This case is Worldwide Network Services, LLC v. DynCorp International, et al., U.S. District Court for the District of Columbia, D.C. No. 06-1717-RJL, Judge Richard Leon presiding.

6/7. The House Judiciary Committee's (HJC) Subcommittee on Crime approved HR 660 [LOC | WW], the "Court Security Improvement Act of 2007". This bill contains one notable provision that is unrelated to court security. It would amend 28 U.S.C. § 296, by a adding the following: "However, a judge who has retired from regular active service under section 371(b) of this title, when designated and assigned to the court to which such judge was appointed, shall have all the powers of a judge of that court, including participation in appointment of court officers and magistrates, rulemaking, governance, and administrative matters." In addition, this bill would amend 28 U.S.C. § 631 to also allow retired judges to participate in the selection of Magistrate Judges. The full Committee is scheduled to mark up this bill on June 13, 2007. The companion bill in the Senate is S 378 [LOC | WW]. The Senate approved this bill on April 19, 2007 by a vote of 97-0. See, Roll Call No. 135.

6/7. The Bureau of Industry and Security (BIS), which regulates exports, published a notice in the Federal Register that announces, describes, recites, and sets the effective date (June 7, 2007) for, its changes to its rules regarding its formula for calculating computer adjusted peak performance in weighted teraFLOPS. The notice states that "This rule corrects the availability of the license exception for technology and software under restriction for specified ``software´´ and ``technology´´ for computers. These additional changes are intended to correct the scope of the license exception in certain Export Control Classification Numbers that were unintentionally narrowed by the rule published on March 22, 2007." See, Federal Register, June 7, 2007, Vol. 72, No. 109, at Pages 31450-31451.

House Approves Commerce Committee's Spyware Bill

6/6. The House approved HR 964 [LOC | WW], the "Securely Protect Yourself Against Cyber Trespass Act", the House Commerce Committee's (HCC) spyware bill, by a vote of 368-48. See, Roll Call No. 434.

This bill would prohibit certain deceptive acts or practices related to spyware, and prohibit collection of certain information without notice and consent. It would give civil enforcement authority to the Federal Trade Commission (FTC). It would also preempt certain state spyware related laws.

See also, stories titled "House Subcommittee Approves SPY ACT" and "Summary of HR 964, the SPY ACT" in TLJ Daily E-Mail Alert No. 1,568, April 23, 2007.

Rep. Ed Towns (D-NY), sponsor of the bill, stated that "There is no debate that Spyware is a serious problem. These programs can invade your privacy by recording and transmitting personal information, monitoring the websites you visit or even steal documents from your computer. Spyware software usually impairs the functionality of a computer, often slowing its operation to a grinding halt. This is the primary reason Representative Mary Bono and I crafted this legislation".

On May 22, 2007, the House approved HR 1525 [LOC | WW], the "Internet Spyware (I-SPY) Prevention Act of 2007", the House Judiciary Committee's bill, by voice vote. The Senate has yet to approve either bill. See, story titled "House Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 1,586, May 23, 2007, and story titled "House Crime Subcommittee Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 1,573, May 2, 2007.

43 of the 48 votes against the HR 964 were cast by Republicans. Rep. Zoe Lofgren (D-CA) and Rep. Jerry Honda (D-CA), both of whom represent Silicon Valley districts, voted against the bill. Rep. Bob Goodlatte (R-VA) also voted against the bill. Rep. Lofgren and Rep. Goodlatte are sponsors of the HJC bill, HR 1525.

People and Appointments

6/6. President Bush withdrew his nomination of former Rep. Henry Bonilla (R-TX) to be Permanent Representative of the United States of America to the Organization of American States. See, White House release.

Go to News from June 1-5, 2007.