TLJ News from April 11-15, 2011

Rep. Latta Introduces Incentive Auctions Bill

4/15. Rep. Bob Latta (R-OH) introduced HR 1622 [LOC | WW], the "Spectrum Innovation Act", another in a series of bills that would provide for voluntary incentive auction revenue sharing.

It was referred to the House Commerce Committee (HCC). Rep. Latta is a member of the HCC and its Subcommittee on Communications and Technology.

He stated in a release that "In order to meet tomorrow's high volume of mobile data, it is imperative we allow the Federal Communications Commission (FCC) to conduct voluntary incentive auctions. Passing this measure would permit the wireless broadband industry to grow, increasing U.S. jobs, productivity and innovation".

This bill would amend 47 U.S.C. § 309(j)(8) to allow for the sharing of spectrum auction proceeds with the licensees who voluntarily relinquish that spectrum. It could provide a financial incentive for television broadcasters and other licensees to relinquish spectrum.

This bill would provide that if the FCC "determines that it is consistent with the public interest in utilization of the spectrum for a licensee to relinquish voluntarily some or all of its licensed spectrum usage rights in order to permit the assignment of new initial licenses subject to new service rules, the proceeds from the use of a competitive bidding system under this subsection in granting such rights to another licensee shall be shared, in an amount or percentage that the Commission considers appropriate, with the licensee who voluntarily relinquished such rights".

It adds that the FCC "shall establish rules for the implementation of voluntary incentive auction revenue sharing", but that the FCC "may not reclaim frequencies of broadcast television licensees directly or indirectly on an involuntary basis".

On July 29, 2010, in the 111th Congress, former Rep. Rick Boucher (D-VA) and Rep. Cliff Stearns (R-FL) introduced the first of many incentive auction bills -- HR 5947 [LOC | WW | PDF], the "Voluntary Incentive Auctions Act of 2010". See also, story titled "Rep. Boucher and Rep. Stearns Introduce Voluntary Incentive Auctions Act" in TLJ Daily E-Mail Alert No. 2,114, July 29, 2010.

For other bills in the current 112th Congress, see:

See also, stories titled "112 Economists Back Incentive Auctions" and "Legislative Proposals that Pertain to Incentive Auctions" in TLJ Daily E-Mail Alert No. 2,218, April 6, 2011.

EOP Paper Calls for Online Authentication

4/15. The Executive Office of the President (EOP) released a document [52 pages in PDF] titled "National Strategy for Trusted Identities in Cyberspace: Enhancing Online Choice, Efficiency, Security, and Privacy". It calls for, but does not propose mandating, "online authentication of people and devices".

This paper states that "Spoofed websites, stolen passwords, and compromised accounts are all symptoms of inadequate authentication mechanisms".

This paper articulates a "vision" for an "Identity Ecosystem". It states that this would be an "online environment where individuals and organizations will be able to trust each other because they follow agreed upon standards to obtain and authenticate their digital identities -- and the digital identities of devices".

This "Identity Ecosystem" would be "designed to securely support transactions that range from anonymous to fully-authenticated and from low- to high-value".

This paper does not propose a government mandate. It states that "participation in the Identity Ecosystem will be voluntary: the government will neither mandate that individuals obtain an Identity Ecosystem credential nor that companies require Identity Ecosystem credentials from consumers as the only means to interact with them".

Nor does it propose a single authentication system. It does propose interoperability between multiple systems, and identity portability.

It further states that privacy and civil liberties should be guiding principles.

Marc Rotenberg, head of the Electronic Privacy Information Center (EPIC), wrote in the EPIC web site that "online identity is complex problem and the risk of 'cyber-identity theft' with consolidated identity systems is very real. The US will need to do more to protect online privacy".

Robert Holleyman, head of the Business Software Alliance (BSA), stated in a release that "The Obama Administration's plan for giving people a better way of authenticating who they are online is a huge step forward ... Strengthening security and privacy will shore up the very foundations of trust and confidence in cyberspace. That will help guarantee the continued growth of electronic communications and commerce."

The Center for Democracy and Technology's (CDT) Leslie Harris stated in a release that "There are two key points about this Strategy: First, this is NOT a government-mandated, national ID program; in fact, it's not an identity 'program' at all ... Second, this is a call by the Administration to the private sector to step up, take leadership of this effort and provide the innovation to implement a privacy-enhancing, trusted system."

The CDT's Aaron Rieke added that "Every new online service wants you to create yet another account. Most of us have no clue how our information is being used or with whom it's going to be shared ... We deserve better control over our identity and more confidence in our transactions online."

Apple Files Patent Infringement Complaint Against Samsung

4/15. Apple, Inc. filed a complaint [373 pages in PDF, 10 MB] in the U.S. District Court (NDCal) against Samsung Electronics Co., Ltd., and U.S. subsidiaries, alleging patent infringement (35 U.S.C. § 271), trade dress infringement (15 U.S.C. § 1125(a) and 15 U.S.C. § 1114), trademark infringement (15 U.S.C. § 1114), and various California state statutory and common law claims.

Apple alleges that Samsung's Galaxy line of mobile phones and the Galaxy Tab computer tablet infringe patents, trade dress, and trademarks related to Apple's iPhone and iPad.

The complaint states that "Instead of pursuing independent product development, Samsung has chosen to slavishly copy Apple's innovative technology, distinctive user interfaces, and elegant and distinctive product and packaging design, in violation of Apple's valuable intellectual property rights."

It adds that "Samsung has made its Galaxy phones and computer tablet work and look like Apple's products through widespread patent and trade dress infringement. Samsung has even misappropriated Apple's distinctive product packaging."

Apple seeks compensatory damages, treble damages, and injunctive relief.

This case is Apple, Inc. v. Samsung Electronics Co., Ltd., et al., U.S. District Court for the Northern District of California, D.C. No. CV-11-1846-LB. Apple is represented in this action by the law firm of Morrison & Foerster.

AT&T and Sprint Nextel Dispute Consequences of AT&T T-Mobile Transaction

4/15. Dan Hesse, CEO of Sprint Nextel, stated at an event in San Francisco at the Commonwealth Club of California that AT&T's acquisition of T-Mobile USA would stifle competition and innovation in the wireless industry.

Jim Cicconi, AT&T's Senior Executive Vice President-External and Legislative Affairs, responded in a release that Hesse's "comments today about AT&T's merger with T-Mobile are way off base. They're also totally at odds with his own past statements" about the competitiveness of the wireless industry.

Cicconi stated that "Given that Sprint is a major competitor to AT&T in the hyper competitive wireless market Mr. Hesse describes, no one should be surprised that they would oppose this merger. But it is self-serving for them to argue that the highly competitive wireless market they cited only months ago is now threatened by the very type of transaction they seemed prepared to defend previously."

DOJ Seeks Certiorari in Warrantless GPS Location Surveillance Case

4/15. The Department of Justice's (DOJ) Office of the Solicitor General (OSG) filed a Petition for Writ of Certiorari [121 pages in PDF] with the Supreme Court in USA v. Antoine Jones, a case involving application of the 4th Amendment to the warrantless use of location tracking devices.

The DOJ requests that the Supreme Court grant certiorari and reverse the judgment of the U.S. Court of Appeals (DCCir). The August 6, 2010 opinion [PDF] of the Court of Appeals is also attached to the above hyperlinked petition, and reported at 615 F.3d 544. (That opinion was issued in USA v. Lawrence Maynard, App. Ct. No. 08-3030, a case consolidated with USA v. Jones.)

4th Amendment and Katz. The 4th Amendment provides in full that "The right of the 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 Supreme Court issued its landmark opinion in Katz v. U.S. in 1967. It is reported at 389 U.S. 347. In that case the FBI conducted a warrantless wiretap of a public telephone booth used by the defendant, and introduced the product of those wiretaps into evidence in a criminal trial.

The Supreme Court, with Justice Potter Stewart writing the opinion, held that warrants based upon probable cause are required for telephone wiretaps, even when the call is placed from a public phone booth. Stewart wrote that "the Fourth Amendment protects people, not places."

Former Justice Harlan used the phrase "constitutionally protected reasonable expectation of privacy" in his concurrence. He elaborated that "My understanding of the rule that has emerged from prior decisions is that there is a twofold requirement, first that a person have exhibited an actual (subjective) expectation of privacy and, second, that the expectation be one that society is prepared to recognize as ``reasonable.´´" (Parentheses in original.)

This statement provides the analysis that is applied by the courts to this day. The general analysis applied by the courts is first, whether there was a government search; second, whether there was a subjective expectation of privacy; and third, whether that expectation is one that society is expected to recognize. If the answer to all three is yes, then the search violated the 4th Amendment, unless it was conducted pursuant to a warrant issued upon probable cause, and all evidence obtained by the search is inadmissible in court under the exclusionary rule.

Proceedings Below. Jones and Maynard and were charged with conspiracy to distribute and to possess with intent to distribute five kilograms or more of cocaine and 50 grams or more of cocaine base. (There were also other charges not pertinent to the present proceeding.) The two defendants were tried jointly in the U.S. District Court (DC), and convicted.

They appealed to the DC Circuit. Jones argued on appeal, among other things, that the District Court erred in admitting evidence acquired by the warrantless use of a Global Positioning System (GPS) device to track his movements continuously for a month. The Court of Appeals reversed Jones' conviction. Part III of the opinion, beginning at page 15, addresses the GPS surveillance issue.

The Court of Appeals first held that the use of the GPS device was a search within the meaning of the 4th Amendment.

The Court of Appeals then rejected the DOJ's arguments that there was no search because Jones' movements were publicly exposed, or constructively exposed.

It wrote, "we hold the whole of a person‘s movements over the course of a month is not actually exposed to the public because the likelihood a stranger would observe all those movements is not just remote, it is essentially nil. It is one thing for a passerby to observe or even to follow someone during a single journey as he goes to the market or returns home from work. It is another thing entirely for that stranger to pick up the scent again the next day and the day after that, week in and week out, dogging his prey until he has identified all the places, people, amusements, and chores that make up that person‘s hitherto private routine."

It further held that Jones held a reasonable expectation of privacy under the test announced by the Supreme Court in Katz. It further held that the search was unreasonable.

Conflict Among the Circuits. There is a conflict among the circuits on this issue. This greatly increases the likelihood that the Supreme Court will grant certiorari. Although, it does not follow from this that the Supreme Court will reverse the judgment of the DC Circuit.

On January 11, 2011, the U.S. Court of Appeals (9thCir) issued its opinion [10 pages in PDF] in U.S. v. Pineda-Moreno, 591 F.3d 1212,  in which it upheld the use of warrantless and extended GPS surveillance.

The Court of Appeals wrote that "Pineda-Moreno cannot show that the agents invaded an area in which he possessed a reasonable expectation of privacy when they walked up his driveway and attached the tracking device to his vehicle. Because the agents did not invade such an area, they conducted no search, and Pineda-Moreno can assert no Fourth Amendment violation."

There is also a pending petition for writ of certiorari, filed by the defendant on November 10, 2010, in that case. That is Sup. Ct. No. 10-7515. See, Supreme Court docket.

See also, the May 21, 2010, opinion [10 pages in PDF] of the U.S. Court of Appeals (8thCir) in U.S. v. Marquez, reported at 605 F.3d 604.

The Court of Appeals wrote that "law enforcement officers, using magnetic strips, placed a Global Positioning Satellite (GPS) tracking device on the bumper of the Ford while it was parked in a Walmart parking lot".

The Court of Appeals held that "A person traveling via automobile on public streets has no reasonable expectation of privacy in his movements from one locale to another", and "When electronic monitoring does not invade upon a legitimate expectation of privacy, no search has occurred."

And see, the 2007 opinion of the U.S. Court of Appeals (7thCir) in U.S. v. Garcia, 474 F.3d 994, upholding another warrantless use of GPS surveillence of a car against a 4th Amendment challenge.

Petition for Writ of Certiorari. The DOJ argues that certiorari should be granted because there is a conflict among the circuits.

It further argues that "a person traveling on public thoroughfares has no reasonable expectation of privacy in his movements from one place to an other, even if  ``scientific enhancements´´ allow police to observe this public information more efficiently."

The DOJ wrote that the opinion of the DC Circuit, "if allowed to stand, would stifle the ability of law enforcement agents to follow leads at the beginning stages of an investigation, provide no guidance to law enforcement officers about when a warrant is required before placing a GPS device on a vehicle, and call into question the legality of various investigative techniques used to gather public information. GPS tracking is an important law enforcement tool, and the issue will therefore continue to arise frequently. This Court should intervene to clarify the governing legal principles that apply to an array of investigative techniques, and to establish when GPS tracking may lawfully be undertaken."

The DOJ also advanced that argument the since the DC Circuit's analysis was based upon the prolonged use of GPS devices, it raises the question of whether prolonged use of other surveillance techniques may rise to the level of a search that requires a warrant.

It wrote that "Protracted use of pen registers, repeated trash pulls, aggregation of financial data, and prolonged visual surveillance can all produce an immense amount of information about a person's private life. Each of these practices has been held not to be a Fourth Amendment search. ... But under the court of appeals' theory, these non-search techniques could be transformed into a search when used over some undefined period of time or in combination."

The DOJ concluded that the opinion of the DC Circuit "thus has limitless potential to require courts to draw impossible lines between the moderate degree of review or observation permitted under the court's approach, and the excessive or prolonged degree that becomes a search."

This case is U.S.A. v. Antoine Jones, Supreme Court of the United States, Sup. Ct. No. 10-1259, a petition for writ of certiorari to the U.S. Court of Appeals for the District of Columbia, App. Ct. No. 08-3034. See also, Supreme Court docket.

Jones' response is due by May 16, 2011.

People and Appointments

4/15. The New America Foundation (NAF) hired Thomas Gideon and Seeta Gangadharan to work in its Open Technology Initiative (OTI). See, NAF release.

People and Appointments

4/14. President Obama nominated Robert Zimmer to be a member of the National Science Foundation's (NSF) National Science Board. See, White House news office release and release. He is a mathematician, and President of the University of Chicago.

4/14. The Senate confirmed Kelvin Droegemeier to be a member of the National Science Foundation's (NSF) National Science Board (NSB). See, Congressional Record, April 14, 2011, at Page S2557.

4/14. The Senate confirmed Kathryn Sullivan to be an Assistant Secretary of Commerce. See, Congressional Record, April 14, 2011, at Page S2557. She will be in charge of the National Weather Service and related programs.

4/14. The Senate confirmed Kurt Tong to be U.S. Senior Official for the Asia Pacific Economic Cooperation Forum. See, Congressional Record, April 14, 2011, at Page S2557.

4/14. The Senate Banking Committee (SBC) approved the nomination of Eric Hirschhorn to be Under Secretary of Commerce for Export Administration, head of the Bureau of Industry and Security (BIS). See, Congressional Record, April 14, 2011, at Page S2505.

4/14. The Senate Banking Committee (SBC) approved the nominations of  Katharine Abraham and Carl Shapiro to be members of the Executive Office of the President's (EOP) Council of Economic Advisers. See, Congressional Record, April 14, 2011, at Page S2506.

4/14.  The Senate Finance Committee (SFC) approved the nomination of David Cohen to be the Department of the Treasury's (DOT) Under Secretary for Terrorism and Financial Crimes. See, Congressional Record, April 14, 2011, at Page S2506.

More News

4/14. The Government Accountability Office (GAO) released a report [13 pages in PDF] titled "Employment Verification: Agencies Have Improved E-Verify, but Significant Challenges Remain".

4/14. The Association of American Publishers (AAP) announced in a release that "According to the February results, once again e-Books have enjoyed triple-digit percentage growth, 202.3%, vs February 2010. Downloaded Audiobooks, which have also seen consistent monthly gains, increased 36.7% vs last February."

Senators Introduce Bill to Require Numerous Cyber Security Studies

4/13. Sen. Sheldon Whitehouse (D-RI) and Sen. Jon Kyl (R-AZ) introduced S 813 [LOC | WW], the "Cyber Security Public Awareness Act of 2011", a bill to mandate the writing of numerous reports related to cyber security.

For example, this bill would require the Department of Homeland Security (DHS) to write annual reports for the Congress that summarize "major cyber incidents involving networks of executive agencies", other than the Department of Defense (DOD), which would be tasked by this bill with writing its own annual report.

See, full story.

House Republicans Introduce Privacy Bill

4/13. Rep. Cliff Stearns (R-FL), Rep. Jim Matheson (D-UT), Rep. Brian Bilbray (R-CA), and Rep. Dan Manzullo (R-IL) introduced HR 1528 [LOC | WW], the "Consumer Privacy Protection Act of 2011".

This bill would regulate the collection and use of personally identifiable information or PII (including a name, address, email address, phone number, or credit or debit card number) by any covered entity (an entity that "sells, discloses for consideration, or uses personally identifiable information of more than 5,000 consumers during any consecutive 12-month period").

This bill would require covered entities to notify consumers that their PII may be used for a purpose unrelated to the transaction in which it was collected.

This bill would require covered entities to write and publish privacy policies, set minimum standards for such policies, and require notice to consumers of changes in the policies.

See, full story.

Sen. McCain and Sen. Kerry Introduce Privacy Bill

4/12. Sen. John Kerry (D-MA) and Sen. John McCain (R-AZ) introduced S 799 [LOC | WW], the "Commercial Privacy Bill of Rights Act of 2011".

This is a huge bill -- 44 pages in PDF -- that would create a broad regulatory regime for the collection and use of personally identifiable information, both on and off the internet.

It would give rulemaking and enforcement authority to the Federal Trade Commission (FTC). It would also give enforcement authority to the states. It would create no private right of action.

This bill was referred to the Senate Commerce Committee (SCC).

Walter McCormick, head of the USTelecom, stated in a release that "As an industry that already provides its customers with the highest levels of privacy protection, we believe consumers will benefit from legislation that requires all players in the Internet economy to adhere to a common set of rules implemented by a single regulator. While we are still reviewing the bill introduced today by Senators Kerry and McCain, it appears they have taken a big step in that direction, and we appreciate their efforts."

On Wednesday, April 27, 2011, the Center for Democracy and Technology (CDT) will host an event titled "Unpacking the Kerry-McCain Privacy Bill". Leslie Harris, Justin Brookman, and other CDT staff will speak and answer questions.

People and Appointments

4/12. The Senate confirmed Vincent Briccetti to be a Judge of the U.S. District Court (SDNY). See, Congressional Record, April 12, 2011, at Page S2405.

4/12. The Senate confirmed John Kronstadt to be a Judge of the U.S. District Court (CDCal). See, Congressional Record, April 12, 2011, at Page S2405.

Ceglia Files Amended Complaint Against Zuckerberg Seeking Half of His Equity in Facebook

4/11. Paul Ceglia filed an amended complaint [PDF] in the U.S. District Court (WDNY) against Mark Zuckerberg and Facebook, Inc.

The complaint alleges that back in 2003 Ceglia and Zuckerberg entered into an agreement that created a general partnership between Ceglia and Zuckerberg for the development and commercialization of "The Face Book".

Ceglia seeks a declaratory judgment against Zuckerberg that they entered into an agreement that "created a General Partnership under New York Partnership law, of which Ceglia was a 50% owner".

Ceglia also seeks a declaratory judgment against Zuckerberg and Facebook that Ceglia is "entitled to receive 50% of the total equity interest in Facebook, Inc. received by, and promised to Zuckerberg, including, but not limited to, stock, stock options and restricted stock units".

The seven count complaint also pleads breach of fiduciary duty against Zuckerberg, constructive fraud against Zuckerberg, actual fraud against Zuckerberg, breach of contract against Zuckerberg, and breach of the implied covenant of good faith and fair dealing against Zuckerberg.

FCC Issues Public Notice Asking What Its BIAS Transparency Rule Means

4/11. The Federal Communications Commission (FCC) issued a Public Notice [6 pages in PDF] asking what its broadband internet access service (BIAS) transparency rule means. The FCC promulgated its BIAS transparency rule in its huge Report and Order (R&O) [194 pages in PDF] which contains rules for the regulation of BIAS service providers.

The FCC adopted the R&O on December 21, 2010, and released the text on December 23, 2010. It is FCC 10-201 in GN Docket No. 09-191 and WC Docket No. 07-52. See also, stories in TLJ Daily E-Mail Alert No. 2,186, December 22, 2010, and TLJ Daily E-Mail Alert No. 2,188, December 24, 2010.

The rule states that BIAS providers "shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application service, and device providers to develop, market, and maintain Internet offerings".

The rules promulgated in December do not state what must be disclosed, or how it must be disclosed. Having imposed a mandate, the FCC in its April 11, 2011 Public Notice begins a process of establishing the requirements of the mandate.

The just released document is titled "Public Notice". It does not state that it is a notice of proposed rulemaking within the meaning of the Administrative Procedure Act (APA). It does not state that the FCC will promulgate further BIAS transparency regulations. However, it asks whether BIAS service providers should develop "voluntary standards", or the FCC should impose "mandatory methods or formats"?

Joel Gurin, head of the FCC's Consumer and Governmental Affairs Bureau Bureau, stated in a release that "This Public Notice will provide a way for internet service providers, the tech community, and the public to help develop clear guidelines".

The FCC asks in this Public Notice (PN) what should be disclosed, how it should be presented, how it should be disclosed, and how often it must be updated, among other things.

The report portion of the December R&O discussed the transparency rule, at paragraphs 51-63. It states that "broadband providers must, at a minimum, prominently display or provide links to disclosures on a publicly available, easily accessible website that is available to current and prospective end users and edge providers as well as to the Commission, and must disclose relevant information at the point of sale. Current end users must be able to easily identify which disclosures apply to their service offering. Broadband providers' online disclosures shall be considered disclosed to the Commission for purposes of monitoring and enforcement. We may require additional disclosures directly to the Commission." (Footnote omitted.)

The R&O further states that "We anticipate that broadband providers may be able to satisfy the transparency rule through a single disclosure, and therefore do not at this time require multiple disclosures targeted at different audiences. We also decline to adopt a specific format for disclosures, and instead require that disclosure be sufficiently clear and accessible to meet the requirements of the rule. We will, however, continue to monitor compliance with this rule, and may require adherence to a particular set of best practices in the future." (Footnotes omitted.)

The R&O also states that "A key purpose of the transparency rule is to enable third-party experts such as independent engineers and consumer watchdogs to monitor and evaluate network management practices, in order to surface concerns regarding potential open Internet violations."

To the extent that this transparency mandate does not state what must be disclosed, how it must be disclosed, or when or how often it must be disclosed, it is itself an example of regulatory intransparency. It imposes a mandate, but does not put service providers on notice as to what constitutes compliance with the mandate.

The deadline to submit initial comments is May 26, 2011. The deadline to submit reply comments is June 16, 2011. This proceeding is CG Docket No. 09-158. Confusingly, the FCC assigns this PN the docket number of a proceeding other than the docket numbers of the proceeding in which it promulgated its BIAS transparency rule. 09-158 is the number assigned on August 27, 2009, to a Notice of Inquiry [33 pages in PDF] in a proceeding titled "In the Matter of Consumer Information and Disclosure Truth-in-Billing and Billing Format IP-Enabled Services".

Go to News from April 6-10, 2011.