Source: http://www.techlawjournal.com/alert/2007/05/23.asp
Timestamp: 2019-04-23 10:35:28+00:00

Document:
TLJ Daily E-Mail Alert No. 1,586, May 23, 2007.
May 23, 2007, Alert No. 1,586.
5/22. The House approved HR 1525 [LOC | WW], the "Internet Spyware (I-SPY) Prevention Act of 2007" by voice vote. The Senate has yet to approve this bill.
Rep. Zoe Lofgren (D-CA), the sponsor, stated in the House that "Spyware is becoming one of the biggest threats to consumers on the Internet. Thieves are using spyware and key loggers are harvesting personal information from unsuspecting Americans. It also affects the business community that is forced to spend money to block and remove it from their systems."
She continued that her bill "identifies the truly unscrupulous acts associated with spyware and subjects them to criminal punishment. This bill is the right approach because it focuses on behavior, not technology. It targets the worst forms of spyware without unduly burdening technological innovation."
Rep. Lofgren (at right) explained that "The bill imposes tough criminal penalties on those who use spyware in furtherance of another Federal crime or to defraud or injure consumers. It also funds the Attorney General to find and prosecute spyware offenders and phishing scam artists."
She did not expressly mention a competing bill within the jurisdiction of the House Commerce Committee (HCC), HR 964 [LOC | WW], the "Securely Protect Yourself Against Cyber Trespass Act", or "SPY ACT".
However, she said that "Focusing on bad actors and criminal conduct is preferable to an approach that criminalizes technology or imposes notice and consent type requirements. You know, bad actors don't comply with requirements. The more notices Internet users receive, in fact, the less likely they are to pay attention to any of them. Seventy-three percent of users don't read agreements, privacy statements or disclaimers on the Internet."
HR 1525 bill would amend the criminal code by adding a new section 1030A titled "Illicit indirect use of protected computers". 18 U.S.C. § 1030 is titled "Fraud and related activity in connection with computers".
The new § 1030A would contain two criminal prohibitions. First, the bill provides that "Whoever intentionally accesses a protected computer without authorization, or exceeds authorized access to a protected computer, by causing a computer program or code to be copied onto the protected computer, and intentionally uses that program or code in furtherance of another Federal criminal offense shall be fined under this title or imprisoned not more than 5 years, or both."
See also, story titled "House Crime Subcommittee Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 1,573, May 2, 2007.
Randall Rothenberg, head of the Internet Advertising Bureau (IAB), stated in a release that "We commend the House for its leadership in passing targeted, effective spyware legislation ... This is a strong message to individuals and organizations who attempt to steal consumers' sensitive information for illegitimate gain and serves as further assurance that those who seek to defraud consumers will suffer the consequences. ... We look forward to working with the Senate to enact a strong, sensible Federal anti-spyware law".
5/22. The Department of Justice (DOJ) filed a complaint [19 pages in PDF] in U.S. District Court (SDWV) against the Daily Gazette Company and MediaNews Group, Inc. alleging violation of Section 7 of the Clayton Act and Sections 1 and 2 of the Sherman Act in connection with the ownership and operation of newspapers.
The Daily Gazette Company owns a newspaper published in Charleston, West Virginia, titled "The Charleston Gazette". The MediaNews Group owns a second newspaper published in Charleston titled the "Daily Mail". In 2004 the two companies engaged in transactions in which the Daily Gazette Company acquired ownership of the Daily Mail.
The DOJ argues that the relevant markets are the sale of print newspapers to consumers in Charleston, West Virginia, and the sale of advertising space in these print newspapers to advertisers.
The DOJ's arguments do not reflect the declining sales and subscriptions, and declining advertising revenues of, city newspapers. Nor do they reflect the increasing competition from, and fungibility of, services and information provided by other media, including internet based, broadcast television and radio, and cable media.
The complaint alleges that "Most readers of local daily newspapers in the Charleston area do not consider weekly newspapers, radio news, television news, Internet news, or any other media to be adequate substitutes for the two local daily newspapers ..."
For example, the DOJ argues that "Readers also value other features of local newspapers", such as their "legal notices".
The complaint also alleges that "A substantial portion of advertisers seeking to reach Charleston area consumers do not consider other types of advertising, such as that in weekly newspapers, on radio, on television, or on the Internet to be adequate substitutes for advertising in a local daily newspaper."
The complaint alleges violation of Section 7 of the Clayton Act, which is codified at 15 U.S.C. § 18.
This section provides that "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital ... of another person ... where ... the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."
The DOJ's complaint alleges that the effect of the transaction between the Daily Gazette Company and MediaNews Group "has been and is likely to continue to be to lessen competition substantially and to tend to create a monopoly in interstate commerce in the sale of local daily newspapers and advertising in those newspapers in the Charleston, West Virginia, area".
The complaint also alleges violation of Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1. It provides, in part, that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal."
The complaint also alleges violation of Section 2 of the Sherman Act, which is codified at 15 U.S.C. § 2. It provides, in part, that "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished ..."
Thomas Barnett, the Assistant Attorney General in charge of the DOJ's Antitrust Division, stated in a release that "When Daily Gazette Company acquired the Daily Mail with the aim of shutting it down, readers in the Charleston area, and the advertisers who value access to them, were denied the benefits of competition ... The Department's investigation saved the Daily Mail from this unlawful termination, and this action seeks to remedy the competitive damage already done and to prohibit the parties from resuming an anticompetitive course in the future."
The Federal Communications Commission (FCC), which maintains several sets of rules regulating media ownership, likewise does not take into account the proliferation of new media, and increasing abundance of news and information services.
This case is U.S.A. v. Daily Gazette Company and MediaNews Group, Inc., U.S. District Court for the Southern District of West Virginia, Charleston Division, D.C. No. 2:07-0329.
5/22. The U.S. Court of Appeals (5thCir) issued its opinion [28 pages in PDF] in Texas v. Soileau, an 11th Amendment immunity case. It affirmed the judgment of the District Court and Bankruptcy Court.
Geraldine Soileau filed a Chapter 7 petition in the U.S. Bankruptcy Court (SDTex). She sought a discharge of debts owing to the state of Texas as a result of state court judgments against her for defaulting on surety bail bonds. Texas argued a particularly expansive interpretation of 11th Amendment immunity to evade the effects of this bankruptcy proceeding.
Perhaps it should also be noted here that the state of Texas also has a history of abusing 11th Amendment immunity to evade money judgments against it for infringement of intellectual property rights.
The Bankruptcy Court and U.S. District Court (SDTex) both rejected Texas' 11th Amendment immunity argument. The Court of Appeals affirmed.
The holding of the just released opinion was to be expected, especially in light of the Supreme Court's January 23, 2006, opinion [60 pages in PDF] in Katz, 546 U.S. 356, another bankruptcy case regarding state sovereign immunity. See also, story titled "Supreme Court Rules in State Sovereign Immunity Case" in TLJ Daily E-Mail Alert No. 1,295, January 24, 2006.
Nevertheless, the state of 11th Amendment immunity law remains unsettled. The Supreme Court's 5-4 opinion in Katz (in which the Court held that the Congress could abrogate state sovereign immunity in the context of bankruptcy law) cannot be reconciled with the Supreme Court's 5-4 opinion in Florida Prepaid v. College Savings Bank, 527 U.S. 627 (1999) (in which the Court held that Congress cannot abrogate state sovereign immunity in the context of intellectual property law).
The Supreme Court has not considered 11th Amendment immunity since Justice Sam Alito joined the Court.
5/14. Rep. Bennie Thompson (D-MS), Chairman of the House Homeland Security Committee (HHSC), and Rep. James Langevin (D-RI), Chairman of the HHSC's Subcommittee on Emerging Threats, Cybersecurity, and Science and Technology, sent a letter to Dale Klein, Chairman of the Nuclear Regulatory Commission (NRC) regarding cyber security at nuclear power plants.
The two wrote about an "incident that occurred on August 19, 2006, at the Brown’s Ferry Unit 3 facility, which was manually scrammed following a loss of both of the recirculation pumps. After conducting a review of the event, the licensee determined that the root cause of failure was the malfunction of the variable frequency drive (VFD) controller due to ``excessive traffic´´ on the plant’s computer network."
They added that "In accord with current regulations, NRC staff decided against investigating the failure as a ``cybersecurity incident´´ because 1) the failing system was a ``non-safety´´ system rather than a ``safety´´ system, and 2) it was determined by the licensee that the incident did not involve an external cyber attack on the system."
The two Representatives expressed their concern about "regulatory shortfalls exposed by this recent incident", and particularly that "current NRC regulations fail to comprehensively proscribe adequate cybersecurity protections of both safety and non-safety systems".
The NRC is currently conducting a rulemaking proceeding. The letter also propounds numerous questions to the NRC.
For example, they ask, "As time passes, more and more safety systems will be networked and accessible online. How will future NRC regulations address the rise of networked safety systems?"
5/23. The Copyright Office (CO) announced that it will hold four days of hearings on July 23 through July 26, 2007, regarding the operation of, and continued necessity for, the cable and satellite statutory licenses under the Copyright Act. June 15, 2007, is the deadline to submit written or e-mail notifications of intent to testify at the CO's hearings. July 2, 2007, is the deadline for persons who are scheduled to testify to submit copies of their prepared testimony. See, notice in the Federal Register, May 23, 2007, Vol. 72, No. 99, at Pages 28998-29000. Location: Copyright Office Hearing Room, 4th Floor, Madison Building, 101 Independence Ave., SE.
5/23. The Federal Communications Commission (FCC) published a notice in the Federal Register that sets the comment deadlines for its Notice of Proposed Rulemaking (NPRM) [38 pages in PDF] in its proceeding titled "In the Matter of High-Cost Universal Service Support Federal-State Joint Board on Universal Service". This NPRM seeks public comments on the Federal-State Joint Board on Universal Service's recommendation that the FCC impose an interim, emergency cap on the amount of high cost support that competitive eligible telecommunications carriers (ETCs) may receive. Initial comments are due by June 6, 2007. Reply comments are due by June 13, 2007. See, Federal Register, May 23, 2007, Vol. 72, No. 99, at Pages 28936-28939. This item is FCC 07-88 in WC Docket No. 05-337 and CC Docket No. 96-45.
5/17. The Senate Banking Committee reported the nomination of Mario Mancuso to be Under Secretary of Commerce for Export Administration. See, Congressional Record, May 21, 2007, at Page S6399.
10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda, which the SJC rarely follows, includes consideration of several judicial nominees: Leslie Southwick (to be Judge of the U.S. Court of Appeals for the 5th Circuit), Liam O’Grady (U.S. District Court for the Eastern District of Virginia), Janet Neff (U.S.D.C. for the Western District of Michigan), and Paul Lewis Maloney (U.S.D.C. W.D. Michigan). Location: Room 226, Dirksen Building.
11:30 AM. The Senate Foreign Relations Committee will hold an executive business meeting. The agenda includes consideration of the nomination of James Glassman to be a member of the Broadcasting Board of Governors, for a term expiring August 13, 2007, and to be its Chairman. Location: Room S-116, Capitol Building.

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