Source: http://www.techlawjournal.com/home/newsbriefs/2012/04d.asp
Timestamp: 2019-04-20 15:05:07+00:00

Document:
TLJ News: April 16-20, 2012.
4/20. The House Commerce Committee (HCC) released a report [13 pages in PDF] by Rep. Fred Upton (R-MI), the Chairman of the HCC, to House Republican leaders regarding the work of the HCC during the first quarter of 2012. This report addresses numerous topics, including incentive auctions, FCC procedural reform, cyber security, and online privacy.
Spectrum Auctions. The report states that "our team spent much of the first session holding hearings, listening to stakeholders, and preparing legislation to free up additional spectrum to support the build-out of the next generation of wireless broadband networks. In the first quarter of 2012, we pushed that legislation over the finish line as part of the Middle Class Tax Relief and Job Creation Act."
It adds that "Growing consumer demand and the increasing number of mobile devices are creating a spectrum crunch. To make more airwaves available for wireless broadband, we advanced legislation to authorize the Federal Communications Commission to conduct voluntary incentive auctions, which give a portion of auction proceeds to licensees who return spectrum to be repurposed for wireless broadband. The result is a more efficient use of our airwaves, vast new swaths of spectrum for wireless broadband development, and a major return for taxpayers who benefit from the auctions."
This bill is HR 3630, [LOC | WW]. See, stories titled "House and Senate Negotiators Reach Agreement on Spectrum Legislation", "Summary of Spectrum Bill", and "Reaction to Spectrum Bill" in TLJ Daily E-Mail Alert No. 2,339, February 17, 2012, story titled "House and Senate Pass Spectrum Bill" in TLJ Daily E-Mail Alert No. 2,340, February 18, 2012, and story titled "Obama Signs Spectrum Bill into Law" in TLJ Daily E-Mail Alert No. 2,345, February 23, 2012.
FCC Reform. This report also addresses HR 3309 [LOC | WW], the "Federal Communications Commission Process Reform Act of 2012". The House, but not the Senate, has passed this bill.
It states that "an industry’s ability to thrive is also affected by the fairness and predictability of the regulations -- and regulators -- that govern it. For that reason, we followed enactment of spectrum reform with common-sense FCC process reform."
See, stories titled "House Passes FCC Process Reform Act", "Summary of Amendments to HR 3309 Approved or Rejected by the House", "House Rejects Amendment Regarding Warning Labels for Surveillance Risks", "House Rejects Amendment Regarding Regulation of Political Speech", "House Rejects Motion Pertaining to Employer Demands for Employee Passwords for Social Networking Sites", "Summary of HR 3309 As Passed by the House", and "Commentary: FCC as an Agent of the Congress" in TLJ Daily E-Mail Alert No. 2,361, March 30, 2012.
The report also states that HR 3310 [LOC | WW], the "Federal Communications Commission Consolidated Reporting Act of 2012", "is expected to clear a vote by the full House soon".
Others Issues. This report also reviews the HCC's Subcommittee on Communications and Technologies hearings on cyber security, including data security, and the role of communications networks in securing cyberspace. This report also addresses the HCC's long running review of online privacy.
4/20. The Federal Communications Commission (FCC) released an agenda for its event on Friday, April 27, 2012, titled "Open Meeting". This agenda contains the same five items as the FCC's preliminary agenda. See, story titled "FCC Releases Tentative Agenda for Meeting of April 27" in TLJ Daily E-Mail Alert No. 2,369, April 12, 2012.
4/20. The Securities and Exchange Commission (SEC) filed a civil complaint in the U.S. District Court (SDNY) against Thomas and John Hunter alleging violation of Section 17 of the Securities Act and Section 10b of the Securities Exchange Act in connection with their alleged touting of penny stocks by e-mail. They were paid to tout certain stocks, but falsely alleged to newsletter recipients that they had a "stock picking robot" that was "a highly sophisticated computer trading program and the product of extensive research and development". They made money from stock promoters and from the sale of newsletter subscriptions. See also, SEC release. This case is SEC v. Thomas Edward Hunter and John Alexander Hunter, U.S. District Court for the Southern District of New York, D.C. No. 12-SV-3123, Judge Jesse Furman presiding.
4/20. Daniyar Zhaxalyk pled guilty in the U.S. District Court (SDTex) to one count of money laundering associated with a hack and dump scheme involving stock market accounts. The Department of Justice (DOJ) stated in a release that "The indictment charged that Zhaxalyk's co-conspirators illegally accessed brokerage accounts to engage in a stock fraud scheme in which the compromised accounts were used to purchase borrowed shares of stock at above-market prices from the defendants’ personal brokerage accounts. Zhaxalyk’s co-conspirators then allegedly repurchased the borrowed shares at the considerably lower market price, returned the borrowed shares to the stock lender and claimed as profit the difference between the market price and the inflated price paid by the compromised victim accounts. Zhaxalyk admitted that he received and made wire transfers and withdrawals of the funds generated from the fraudulent stock sales and supervised other Houston-based students recruited into the scheme to launder funds."
4/19. Rep. Scott Tipton (R-CO), Rep. Mike Coffman (R-CO) and Rep. Jared Polis (D-CO) introduced HR 4469 [LOC | WW | PDF], the "The Four Corners Television Access Act of 2012".
This bill would amend 17 U.S.C. § 122(a)(4)(C), regarding satellite carriage of certain broadcast signals, and 47 U.S.C. § 341, regarding cable carriage of certain broadcast signals. However, this bill is narrowly targeted to affect only Montezuma County and La Plata County in the southwest corner of the state of Colorado.
He added that "Allowing ``retransmission to be permitted´´ gives satellite providers the ability to retransmit Colorado-based broadcasts outside of the current Designated Market Area (DMA) to specific affected Colorado counties that meet certain Nielsen Media Research statistics. This is critical as close to 60% of residents in the designated area depend on satellite television because of the region's geography and other factors."
The FCC adopted satellite television significantly viewed rules in November of 2010 to implement Section 203 of the Satellite Television Extension and Localism Act of 2010 (STELA). See, NPRM (FCC 10-130 in MB Docket No. 10-148) and Report and Order (FCC 10-193).
Janet Napolitano, US Secretary of Homeland Security, stated in a release that the US and EU "continue to take vital steps to fight terrorism and transnational threats, while protecting privacy and civil rights".
4/19. Alan Behr joined the New York City office of the law firm of Phillips Nizer as a partner. His work includes copyright and trademark matters for publishing and technology clients. He was previously at Alston & Bird. Before that, he was the chief legal officer at Atari.
4/19. The Government Accountability Office (GAO) released a report [29 pages in PDF] titled "Federal Telework: Program Measurement Continues to Confront Data Reliability Issues".
4/19. Rep. Barbara Mikulski (D-MD) introduced S 2323 [LOC | WW], a bill to provide appropriations for the Department of Commerce (which includes the U.S. Patent and Trademark Office (USPTO), the National Telecommunications and Information Administration (NTIA), and Bureau of Industry and Security (BIS)), the Department of Justice (DOJ), and science related agencies. Sen. Mikulski is the Chairman of the Senate Appropriations Committee's (SAC) Subcommittee on Commerce, Justice, Science and Related Agencies. See also, Sen. Mikulski's release.
4/18. The Supreme Court issued its opinion in Kappos v. Hyatt, regarding procedure in the District Court when a patent applicant whose claims have been denied by the U.S. Patent and Trademark Office's (USPTO) examiner files an action under 35 U.S.C. § 145.
The Supreme Court held that the patent applicant may submit evidence to the District Court not submitted to the patent examiner, and that there are no evidentiary restrictions.
4/18. The Senate is scheduled to resume reconsideration on Wednesday, April 18, of the motion to proceed to S 1925 [LOC | WW], the "Violence Against Women Reauthorization Act of 2011". This long bill has little to do with information or communications technology (ICT). However, Section1003 of the bill would clean up the current poorly drafted language in the Communications Act, enacted in 2006, that makes it a crime to "annoy" someone on the internet. If enacted, it would still be a crime to "abuse, threaten or harass" someone with anonymous internet communications.
In January 2006 former President Bush signed into law a Department of Justice Reauthorization Act. That bill was HR 3402 (109th Congress). It is now Public Law No. 109-162. It included the Violence Against Women Act (VAWA). That VAWA included amendments to 47 U.S.C. § 223, which prohibits obscene or harassing phone calls.
The 2006 VAWA amended Subsection 223(a)(1)(C) to make it a crime to utilize a "telecommunications device" without disclosing one's identity "with intent to annoy, abuse, threaten, or harass".
Thus, "annoying" someone on the internet became a crime. This prohibition has obvious Constitutional infirmities.
During the First Session of the 109th Congress, the House Judiciary Committee (HJC) and its staff produced a cyber stalking bill. That 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).
For a more detailed 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 VAWA reauthorization now being considered by the Senate would revise the 2006 amendments to Section 223. It leaves in place the expansion of the meaning of "telecommunications device" to encompass internet communications. It eliminates the use of the word "annoy" in Section 223.
S 1925 would make the following changes to Subsection 223(a)(1)(C). Deletions are shown in strikethrough. Addition are shown in red.
"(a) ... Whoever ... (1) In interstate or foreign Communications ... (C) makes a telephone call or utilizes a telecommunications device, whether or not conversation or communication ensues, without disclosing his identity and with intent to annoy, abuse, threaten, or harass any person at the called number or who receives the communications harass any specific person;"
Sen. Patrick Leahy (D-VT) introduced this bill on November 30, 2011. It has 60 cosponsors. The Senate Judiciary Committee (SJC) amended and approved this bill on February 2, 2012.
A related bill in the House, HR 4271 [LOC | WW], the "Violence Against Women Reauthorization Act of 2012", would make identical changes to Section 223. Rep. Gwen Moore (D-WI) introduced it on March 27, 2012. It was referred to the HJC and its Subcommittee on Crime, Terrorism, and Homeland Security, the House Commerce Committee (HCC), House Natural Resources Committee, and House Financial Services Committee.
4/17. The Supreme Court issued its opinion in Caraco Pharmaceutical v. Novo Nordisk, reversing the Court of Appeals. This case pertains to the Hatch Waxman Act.
The Supreme Court held that "a generic manufacturer may employ" the counterclaim provision of the Hatch Waxman Act "to force correction of a use code that inaccurately describes the brand's patent as covering a particular method of using the drug in question".
Rep. Henry Waxman (D-CA) (at right), who had filed an amicus curiae brief, stated in a release that "I welcome the decision by the U.S. Supreme Court on the Caraco v. Novo case. While the issues in the case may seem arcane, the fact of the matter is that allowing brand companies to exaggerate the breadth of their patent protections in their listings with FDA served as a real block to generics. I am pleased that the courts unanimously agreed with that view. This decision is in the interest of American consumers who should have the benefit of competition and lower prices."
See also, April 4, 2010 opinion of the U.S. Court of Appeals (FedCir).
Justice Kagan wrote the opinion for a unanimous court. Justice Sotomayor wrote a concurring opinion.
This case is Caraco Pharmaceutical v. Novo Nordisk, Supreme Court of the U.S., Sup. Ct. No. 10-844, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2010-1001.
4/17. Rep. Debbie Schultz (D-FL) and Rep. Lamar Smith (R-TX) introduced HR 4362 [LOC | WW], the "Stopping Tax Offenders and Prosecuting Identity Theft Act".
Rep. Smith and Rep. Schultz (at right) issued a release that states that "last year alone more than 850,000 tax returns and $5.8 billion were associated with fraudulent tax refunds involving identity theft".
They tout this bill as a way to fight tax return identity theft, in which criminals file false tax returns using the name and social security number of another person, in order to fraudulently receive a refund owed to that person.
It would make tax fraud (26 U.S.C. § 7206 or 26 U.S.C. §7207) a predicate offense for elevating identity theft (18 U.S.C. § 1028) to aggravated identity theft (18 U.S.C. § 1028A).
It would also amend 18 U.S.C. § 1028, which currently prohibits only the theft of the identity of an individual person, to also prohibit the theft of the identity of a business or other entity.
It would also direct the Department of Justice (DOJ) "to bring more perpetrators of tax return identity theft to justice". It would also direct the DOJ to report on the incidence of tax return identity theft, and the effectiveness of current statutes, and make recommendations for further amendments to statutes to further the prosecution of tax return identity theft.
This bill was referred to the House Judiciary Committee (HJC). Rep. Smith is the Chairman. Rep. Schultz is not a member. However, she was a member until she took leave to serve as Chairman of the Democratic National Committee (DNC).
4/17. Rep. Blaine Luetkemeyer (R-MO) and Rep. David Scott (D-GA) introduced HR 4367 [LOC | WW]. This bill would amend the Consumer Credit Protection Act, which is also known as the Electronic Fund Transfer Act, to limit the fee disclosure requirement for an automatic teller machine to the screen of that machine. It was referred to the House Financial Services Committee. Rep. Luetkemeyer and Rep. Scott are members.
4/16. Gordon Smith, head of the National Association of Broadcasters (NAB), gave a speech in Las Vegas at the NAB Show. He discussed recent, current and potential legislative and regulatory proceedings.
Performance Rights Act. Smith (at right) stated that "When I first arrived at NAB, we were fighting passage of the Performance Rights Act, a bill to levy a fee on local radio that had the momentum of a fast moving freight train. But because of some very smart leaders in both the radio and TV business, NAB was able to thwart this piece of legislation that could have devastated the financial model of free and local radio."
Previous Congresses have considered, but not enacted, such legislation. See, for the 111th Congress, HR 848 [LOC | WW], the "Performance Rights Act", and S 379 [LOC | WW]. There was also related legislation in the 110th Congress. See also, story titled "Performance Rights Act Reintroduced" in TLJ Daily E-Mail Alert No. 1,896, February 10, 2009.
However, the record industry has not forgotten the issue. Moreover, Victoria Espinel, the U.S. Intellectual Property Enforcement Coordinator, offered twenty legislative recommendations to Congress regarding intellectual property law on March 15, 2011. That list includes "creating a right of public performance for copyright owners for sound recordings transmitted by over-the-air broadcast stations". See, story titled "Espinel Offers 20 IP Legislative Recommendations" in TLJ Daily E-Mail Alert No. 2,212, March 30, 2011.
Incentive Auctions. Smith stated that "On the TV front, this year we worked successfully with our friends in Congress to shape a piece of spectrum legislation that allows television stations to participate in a voluntary auction, but ensures that those not participating are held harmless."
He added that "we averted a spectrum grab from misguided friends who would have you believe that broadcasting is yesterday's technology."
"We have demonstrated that through engaging the other side, through our unity and by using all our tools, we can change the course of legislation that threatens the public's access to local radio and TV."
But, he also offered this warning. "Recent press reports quote the telecommunications industry saying the spectrum legislation passed by Congress is only the beginning -- a ``down payment´´ of what they're seeking in terms of access to the airwaves. They want us out of this game. We can't let down our guard."
Retransmission Consent. Smith stated that "We're also fighting to ensure that viewers continue to have dynamic content choices, by retaining a free market retransmission consent process." He said that "Stations deserve to be allowed to negotiate for compensation of their highly valued programming."
He continued that "some cable and satellite companies don't want to pay a fair rate for the signals of local stations. ... The other side says the market is broken, but with nearly all retransmission consent deals being completed successfully, the cable and satellite lobby's notion of ``market failure´´ is simply false."
Federal Communications Commission (FCC) Chairman Julius Genachowski (at left) also spoke at the same event. He said in his speech that "the FCC's approach so far on retrans has generally been to resist calls for agency intervention and encourage private, market-driven agreements between broadcasters and cable and satellite providers. The basic view is that it is both economically sensible and consistent with the statutory scheme for broadcasters that have invested in desirable programming to seek and receive retransmission fees."
Genachowski elaborated that "the calls for agency intervention continue. The cable industry points to historical benefits that broadcasters have received from government, and argues strongly that these give broadcasters an unfair advantage in a marketplace that has changed significantly since the retransmission consent law was adopted. Consumer groups and others are concerned about effects on consumers and on independent cable programmers."
He also noted that "We opened an FCC proceeding because these are important issues, and we continue to watch the marketplace carefully to determine whether further Commission action is warranted."
This proceeding is MB Docket No. 10-71.
The retransmission consent regulatory regime was established by the Cable Act of 1992, and is further implemented by FCC rules. However, the FCC has little statutory authority in this area.
47 U.S.C. § 325 provides that "No cable system or other multichannel video programming distributor shall retransmit the signal of a broadcasting station, or any part thereof, except ... with the express authority of the originating station".
That is, broadcasters can charge cable companies and other MVPDs for retransmission of their programming. The companies have been negotiating retransmission consent contracts for 18 years.
Unlike in 1992, there are now usually multiple MVPDs in each market. When one MVPD has permission to retransmit a particular program, but another does not, consumers can switch providers. However, there are switching costs. Subscribers of a particular MVPDs can experience unexpected disruption of programming that they want to watch if a new retransmission consent agreement is not reached.
SOPA and PIPA. Smith also offered his assessment of the success of Google and other companies in blocking further House and Senate consideration of bills that would address web sites dedicated to infringing activity.
Those bills are HR 3261 [LOC | WW], the "Stop Online Piracy Act" or "SOPA", and S 968 [LOC | WW], the "Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011", "PROTECT IP Act", or "PIPA".
"Earlier this year, we witnessed a debate that pitted the content community against the technology community ... The idea behind SOPA and PIPA was simple and straightforward: Don't steal our creative content."
"But it didn't matter," said Smith, "The technology community -- the Googles and Wikis -- used their medium just as we did -- to create a powerful megaphone to change forever how battles are won, or lost, inside the Beltway.
"They changed the debate. Shockingly, ``Thou shalt not steal,´´ became ``Do not censor the Internet.´´"
Internet TV. Smith also discussed competitive threats to broadcasters. "We must continue to look for ways to integrate the power of broadcasting and broadband to improve the viewer experience. Our adversaries -- your competitors -- are doing this. They're smart. They're ruthless. And they are well-financed."
He said that "The current broadcasting model can be undone by technology ... or government ... or some unintended consequence from either."
"So let me get this straight. Wireless carriers want to roll out a mobile TV service, just like ours. And they are asking the government for more of our spectrum to do it. And their service, most assuredly, would not be free." Smith added that "It seems to me that the government could be in the position of picking the wireless industry as the winner and the consumer as the loser."
He said that "the wireless industry's ``one-to-one´´ architecture could never match our ability to broadcast voice and video to the masses. Broadband can never replicate the lifeline role of the local broadcaster. ... Especially in an emergency."
Radio Tuners in Mobile Phones. "This is a standard feature on cell phones in Europe and Asia", said Smith. "Many phones in the U.S. already have this capability, but the carriers don't make that known and may refuse to activate the chip. Why?
"Some say because they have a vested interest in charging consumers with fees for data streaming."
He continued that "given the certain failure of mobile phones in a lifeline situation, we're hopeful that over time, carriers will come to understand and appreciate the importance of having an activated radio tuner in these devices, and to off load their ever congested airwaves."
He added that "We also need to be on tablets, laptops and game consoles and on mobile devices not yet developed."
4/16. The House Intelligence Committee (HIC) released a statement that defends provisions of HR 3523 [LOC | WW], the "Cyber Intelligence Sharing and Protection Act of 2011" or "CISPA", and announced several forthcoming revisions, including "new proposed amendments that would be considered when the bill reaches the House floor".
This bill is sponsored by Rep. Mike Rogers (R-MI) and Rep. Dutch Ruppersberger (D-MD), the Chairman and ranking Democrat on the HIC. The HIC amended and approved it on November 30, 2011.
Some of the criticism of the CISPA addresses specific language in the bill. Some criticism is hyperbole without basis in the text of the bill.
The just released statement states that "The Rogers-Ruppersberger bill does not provide any authority or levy any requirements to block access to accounts or websites, or to remove content. The bill's authority is limited to the identification, obtaining, and sharing of cyber threat information."
It continues that "The bill is intended to defend against advanced cyber threats, such as threats from advanced nation-state actors like China. The definition has therefore been narrowed to remove the term ``intellectual property´´ from all definitions in the bill. This change was made to avoid any misunderstanding and to clarify that the bill is intended to defend against efforts to gain unauthorized access to systems or networks, including efforts to gain such unauthorized access to steal private or government information. The definitions remain technology-neutral in order to be flexible enough to address the rapidly changing cyber threat spectrum; the definitions also remain limited only to information that directly pertains to threats or vulnerabilities of networks or systems."
This document also states that there will be a new amendment regarding government accountability. "A new provision has been added to permit federal lawsuits against the government for any violation of restrictions placed on the government’s use of voluntarily shared information, including the important privacy and civil liberties protections contained in the bill. Through such a lawsuit, individuals could obtain actual damages, costs, and attorney's fees."
4/16. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) reissued its Request for Proposal (RFP) SA1301-12-RP-0043 for a new Internet Assigned Numbers Authority (IANA) functions contract. This is for the contract term of October 1, 2012 through September 30, 2015. The deadline to submit proposals is May 31, 2012 at 2:00 PM EDT. The deadline to submit questions regarding the solicitation are due by 2:00 PM EDT on April 23, 2012. See, summary, and RFP and Form 33.
4/16. The Free State Foundation (FSF) announced that it will will host a panel discussion on May 30, 2012, titled "The Multi-Stakeholder Privatized Internet Governance Model: Can It Survive Threats From The UN?". The speakers will include Robert McDowell (FCC Commissioner) and Richard Beaird (Department of State).
Go to News from April 11-15, 2012.

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