Source: http://techlawjournal.com/home/newsbriefs/2002/07e.asp
Timestamp: 2019-04-19 23:01:09+00:00

Document:
TLJ News: July 21-25, 2002.
The bill provides no injunctive remedy. The bill further defines "economic loss" as "monetary costs only". Before bringing suit, the affected file trader must first file an administrative complaint with the DOJ, and comply with its requirements. Moreover, the act of engaging in self help technologies to interfere with file trading alone cannot serve as the basis a legal action; the bill provides that "The cause of action established by this subsection shall only be available as a remedy against impairing actions that would not be lawful but for subsection (a)."
7/25. Rep. Howard Berman's (D-CA) bill to permit copyright owners to employ self help technologies when their copyrighted works are infringed on peer to peer (P2P) networks is clearly intended to enable the music and movie industries to shut down the sorts of rampant copying that the Court in the Napster case found to constitute infringement. However, the bill is written with language broad enough to encompass a variety of other scenarios. The bill also provides the party engaging in self help remedies with wide discretion, and offers the target of the self help remedies very little recourse.
The difference may be substantial. There are six enumerated exclusive rights of copyright in Section 106. Under the Berman bill, anyone who holds any exclusive right in a copyrighted work is a copyright owner, and can exercise the self help remedies against anyone who has infringed the copyrighted work. The infringement need not be of the exclusive right owned by the party engaging in self help.
Finally, if a victim of interference succeeds in bringing and prevailing in an action against someone who has wrongfully interfered with his computer, the bill limits damages to "monetary costs only", and does not allow him to obtain an injunction against further wrongful interference.
They offered three recommendations. First, "Prosecute operators of peer to peer systems who intentionally facilitate mass piracy". Second, "Prosecute individuals who intentionally allow mass copying from their computer over peer to peer networks". And third, "Create more Computer Hacking and Intellectual Property (CHIPs) units around the country with expanded authority to prosecute Internet piracy".
7/25. The Washington DC law firm of Harris Wiltshire filed a Lobbying Registration form with the Clerk of the U.S. House of Representatives which lists Microsoft as its client, and lists as the specific lobbying issues "Use and allocation of unlicensed spectrum; H.R. 4641 Wireless Technology Investment and Digital Dividends Act of 2002; Future legislation pertaining to spectrum allocation reform." The form was signed by Scott Harris.
HR 4641 was introduced on May 2, 2002 by Rep. Ed Markey (D-MA), the ranking Democrat on the House Telecom Subcommittee. The bill has only two co-sponsors, Rep. Karen McCarthy (D-MO) and Rep. John Larson (D-CT).
The bill would require that the National Telecommunications and Information Administration (NTIA) "shall, not later than January 1, 2003, prepare, make publicly available, and submit to the President, the Congress, and the Commission a report that ... designates a 20-megahertz band of contiguous frequencies located below 2 gigahertz, and a band of between 3 and 500 megahertz of contiguous frequencies above 2 gigahertz and below 6 gigahertz, for reallocation to the public for unlicensed use".
Rep. Markey wrote in his summary of the bill that "An unlicensed area of the airwaves will permit the public, through the use of ``smart´´ radio technology and better receiver equipment, to harness the airwaves for countless applications if the government is willing to give back to the public a portion of its own airwaves in such an unlicensed format. From ``wi-fi´´ technology and low power ``Bluetooth´´ wireless connections, to so-called ``802.11b´´ protocols, wireless local area networks and Net connections, utilization of publicly available airwaves can help connect people and businesses in cost effective and spectrum efficient ways. The ``Spectrum Commons´´ will also help to propel economic growth and innovation by opening up the airwaves to new marketplace entry by individuals and entities unaffiliated with established network providers."
However, providing for the allocation of unlicensed spectrum is only one small part of Rep. Markey's bill. The bill would also create a new trust fund, to be named the "Digital Dividends Trust Fund". It would be financed with the proceeds from the auction of spectrum licenses. This trust fund would then be used for teacher training, research and development, digitizing content for libraries, and other purposes.
This bill would also require the Federal Communications Commission (FCC) to take action to achieve the timely transition to digital television by establishing rules governing must carry issues, minimum programming and broadcasting requirements, and digital television receiver benchmarks. It would also require the FCC and NTIA to take action to secure additional spectrum for advanced wireless services -- including Third Generation (3G) services.
7/25. The states of California, New York, Connecticut, Idaho, Iowa, Massachusetts, New Jersey, and Vermont entered into a settlement agreement with Eli Lilly, in connection with Eli Lilly's accidental disclosure of personal information of subscribers to an e-mail reminder service.
Eli Lilly is a pharmaceutical company. It offered an e-mail reminder service regarding use of the drug Prozac. On one occasion it sent an e-mail reminder to 669 subscribers to the service using the "To:" method of addressing the e-mail, rather than the "BCC:" method.
The state of New York stated in a release [PDF] that "The settlement agreement requires Lilly to strengthen its internal standards relating to privacy protection, training, and monitoring. Lilly will also institute automated checks for any of its software that accesses consumer information databases. ... The company will also undergo annual, independent compliance reviews over the next five years and report the findings of those reviews to the states. ... Lilly has also agreed to pay $160,000 to the states to settle the case."
Eli Lilly was previously the subject of an administration proceeding brought by the federal government. The ACLU submitted a letter complaint to the Federal Trade Commission (FTC). Then, on January 18, 2002, the FTC initiated, and simultaneously settled, an administrative proceeding against Eli Lilly alleging violation of the Federal Trade Commission Act (FTCA). See, administrative complaint [PDF]. In that proceeding Eli Lilly agreed to "establish and maintain an information security program for the protection of personally identifiable information". See, Agreement Containing Consent Order [PDF].
Thus, on January 18, the federal government penalized Eli Lilly for inadvertently disclosing a customer list. On July 25, several state governments penalized Eli Lilly for the same disclosure.
Meanwhile, on July 30, in another proceeding, the U.S. Court of Appeals (9thCir) permitted the federal government to seize a group's membership list. See also, story titled "9th Circuit Rejects Privacy of Association" in TLJ Daily E-Mail Alert No. 481, July 31, 2002.
This is essentially a policy oriented law suit brought by Edelman, and his ACLU attorneys, seeking broad declarations from the court that would have the effect of altering various aspects of copyright law, including the Digital Millennium Copyright Act (DMCA). They seek new and novel interpretations of the First Amendment and fair use. They also seek to generally make life miserable for the companies that make blocking software, and the schools and libraries that use this software.
7/25. The U.S. Court of Appeals (7thCir) issued its opinion [PDF] in TE TA MA Truth Foundation v. World Church of the Creator, a trademark case.
7/25. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Mackie v. Rieser, a copyright case regarding the quantum of causation necessary to obtain indirect profits damages.
7/25. Rep. Adam Schiff (D-CA) introduced HR 5233, a bill to amend title XXI of the Social Security Act to encourage the use of web based enrollment systems in the State children's health insurance program (SCHIP).
7/24. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Mattel v. MCA, a trademark and defamation case involving Mattel's Barbie doll. Judge Alex Kozinski, who wrote the opinion, described this case as "Speech-Zilla meets Trademark Kong". In the end, speech won.
Background. Aqua, a Danish techno pop band, wrote a song titled "Barbie Doll" for its 1997 album titled "Aquarium". MCA Records, and other companies, produced, marketed and sold the music. Mattel makes and sells Barbie dolls for girls.
In April, Judge Margaret McKeown of the 9th Circuit wrote that Barbie is "so perfect in her sculpture and presentation, and so comfortable in every setting, from ``California girl´´ to ``Chief Executive Officer Barbie,´´". See, opinion [PDF] in Christian v. Mattel. In the present case, Judge Kozinski noted that Barbie began her career in the 1950s as a "German street walker"; she was an "adult collectors item". Aqua's comic lyrics present her in this light. The song became a top 40 hit. However, Mattel was not amused.
District Court. Mattel filed a complaint in U.S. District Court (CDCal) against MCA Records and others alleging, among other things, violation of the Lanham Act. MCA, in turn, counterclaimed against Mattel alleging defamation for accusing MCA of piracy. The District Court granted MCA's motion for summary judgment on Mattel's claims for trademark infringement and dilution on the grounds that the use was a parody and nominative fair use. The District Court also granted Mattel's motion for summary judgment on MCA's defamation claim.
Appeals Court. The Court of Appeals, in a lengthy analysis of freedom of speech, trademark infringement, and trademark dilution, affirmed the grant of MCA's motion for summary judgment. The Court ruled on the infringement issue on First Amendment grounds. The Court did not address nominative fair use. The Court affirmed the dilution ruling on the grounds that the song falls within the noncommercial use exemption to the Federal Trademark Dilution Act (FTDA). The Court also affirmed the summary judgment on the defamation claim.
Judge Kozinski also concluded that "The parties are advised to chill."
7/24. The Senate Appropriations Committee (SAC) reported and released its Commerce Justice State (CJS) FY 2003 appropriations bill. This bill includes appropriations for most of the technology related departments and agencies of the federal government, including the USPTO, FCC, FTC, and Antitrust Division. President Bush's proposal, released back in February, called for significant increases for these entities. The Senate bill provides for no increase, or very small increases, at most agencies. However, it would reinstate the NTIA's TOP grant program which Bush seeks to eliminate. See, full story.
7/24. A trio of professors from the Massachusetts Institute of Technology (MIT) Media Laboratory spoke at a luncheon on Capitol Hill. They offered a vision for the future of the Internet that is egalitarian and communitarian.
Nicholas Negroponte, Andrew Lippman, and Walter Bender spoke at a luncheon hosted by the Congressional Internet Caucus Advisory Committee. Lippman also handed out a very brief, but wide ranging, paper titled "Scaling the Internet". A Co-Chair of the Internet Caucus, Sen. Conrad Burns (R-MT), and a Congressman from Boston, Rep. Michael Capuano (D-MA), gave introductory remarks.
The three described and promoted the Media Lab. Negroponte said that "we are looking at the moment to work much more closely with the federal government".
The three idealistic academics also related a eclectic collection of anecdotes and one liners about the history, current use, and future of the Internet.
The speakers barely addressed many of broadband issues that other people think are important, such as those pertaining to open access to cable facilities, line splitting, unbundled network elements, and the regulatory classification of wireline broadband services as information services. Lippman explained that "the battle in the wires" has already been lost, so it is best to focus on the future -- wireless.
The three panelists praised dumb networks with intelligent nodes, 802.11, viral networks, interference, and innovative device makers. The derided the centralized ownership models of the cable, broadcast and music industries. The also criticized developments in copyright law, and FCC spectrum management.
Negraponte stated that "Many years ago we thought of unlicensed spectrum that we would use for all of the garbage things -- the things like garage door openers, cordless telephones, stuff like that, microwave ovens. And, sort of, we park the world's junk in these different places in the spectrum. That is indeed how it started."
He continued that "while the telecommunications industry is struggling today to find a next generation -- particularly a wireless -- a next generation of telecommunications technologies and applications and so called broadband -- the computer industry, just like it did with the Internet, is doing something viral on the side. And that goes by the name of 802.11, WiFi, whatever you want to call it."
"This was an effort that people made just to have computers wirelessly talk in local area networks, and offices, homes, whatever. And, as this progressed, it progressed very much like the Internet progressed."
Negraponte stated that spectrum is currently treated like real property. He wants a new approach. He wants there to be more spectrum "commons". Lippman said that spectrum should be treated like the sea -- open to all, but subject to rules.
Lippman also stated that "the Internet was built by building a network that had no intelligence in it. And, all of the intelligence was at the nodes. The basic founding principle was end to end design. Now, how did they get away with that?" He answered that "there was no adult supervision. Put another way, there was no commercial interest involved in it. It was just a bunch of hackers, and just a bunch of people. And, it was fundamentally good for nothing. And because it was good for nothing, they built a network that would become good for anything."
But, said Lippman, "we have lost the battle in wires. We fundamentally lost the battle that caused the Internet to get started." He elaborated that "what is gradually creeping into the way the network is being constructed is a fundamental asymmetry. And, that is hidden in the word broadband, and hidden in the word access, is control over the bits that are flowing through that wire. And, the end to end nature of the Internet is indeed being lost. If I tie into the net with my cable modem, there is no way for me to send bits to my neighbor. There is no way for me to be a wireless provider in my house. ... All of the bits that come from my house go up to the head end, get looked at and filtered, and then go back down again. And the situation is only marginally better with DSL."
Lippman offered his recommendations regarding government regulation of spectrum and interference. He said that "the fundamental thing that you have to think about is that interference doesn't exist in the airwaves, O.K., any more than two waves that cross in an ocean or in a sink would interfere with each other. Interference only exists in the receiver. In the past, it has been expensive to build a receiver that was qualified enough to reject other kinds of interference. That is why in any locality, like Washington and New York, you have TV channels 2, 4, 7, 9, 11, and 13, because it is more expensive to build a TV set that would reject channel 8 while we're trying to watch channel 9. ... So, what you want to do, therefore, is put, in a sense, a different set of constraints on the radio, but not on the spectrum. So, if you want to build it, you have to build it in a way that is cooperative, and sort, ecological, and friendly to the environment, as opposed to building it with a grant of exclusivity ..."
The panel was asked about security. Negraponte said that "while there are certainly some technologies that are emerging in this space, these are are fundamentally societal problems."
Lippman added that "a lot of the work that we are doing is very security neutral, in the sense that one can embed as much security into the system as you want. Or, you can leave it as free as you want. But, there is a little bit of a hidden quirk that also makes it interesting. One of the ways that you communicate, by all of these multiple hops, is you sort of pass messages to people at a level that is so low that they can't even really decode the message themselves. But, by cooperating, O.K., by passing bits and pieces over the long, it can be decoded by the person who is ultimately supposed to receive it. And so, there is an opportunity to embed a kind of security in these kinds of ad hoc and, call them viral, networks, that you didn't have before, in the sense that there really isn't any central authority that had the whole picture."
The panel was also asked about problems relating to spam. Negraponte again said that "the best way of dealing with that phenomenon, is in fact a social phenomenon." He added that the worst spam is not the pormographic variety. Rather, it is "your own colleagues sending you gratuitous cc:s".
The panel was also asked for their views on intellectual property. Negraponte said that "These are really changing, and they are going to change very fast. The only remark that I would like to make is that copyright was invented to protect the artist. That is what it was invented for. Not to protect the channel. And all of the arguments and debates that we see today are about the damn channel complaining. It is not so much the artists. The artists, maybe it is the Grateful Dead, want to have it copied and recorded, and they are going to make their money on performance. ... So, suddenly, it was the channel, not the artist. And I think if we revisit the original purpose, we are going to find some much more flexibility in some of the copyright issues."
Lippman, addressing peer to peer networks, such as Napster, stated that "these new structures for distribution don't necessarily threaten the relationship the artist has with the end user. And they may not even threaten the channel. But they do threaten the historical centralized business model."
The Congressional Internet Caucus Advisory Committee's regularly hosts Internet policy luncheons on Capitol Hill. These events double as a free lunch program for Congressional staffers and journalists.
7/24. The U.S. Court of Appeals (3rdCir) issued its opinion [PDF] in Cloverland v. Pennsylvania. This is not a technology case. It involves Pennsylvania's milk price supports. However, the Appeals Court opinion includes a lengthy analysis of the dormant commerce clause.
Article I, Section 8, of the Constitution provides that "The Congress shall have Power ... to regulate Commerce with foreign Nations, and among the several States ..." The dormant commerce clause is the judicial concept that the Constitution, by delegating certain authority to the Congress to regulate commerce, thereby bars the states from legislating on certain matters that affect interstate commerce, even in the absence of Congressional legislation. It is applied to block states from regulating in a way that materially burdens or discriminates against interstate commerce. The analysis in Cloverland v. Pennsylvania may be pertinent to some challenges to state e-commerce restraints.
7/24. The Federal Communications Commission (FCC) released an order [9 pages in PDF] in which it stated that "we decline to commence a rulemaking to adopt rules to implement the wireless location information privacy amendments to Section 222 of the Communications Act of 1934 ..."
The FCC reasoned that "precisely because of the nascent state of these services, we do not wish inadvertently to constrain technology or consumer choices via our rules. At this point, any commercial location based services being offered are clearly at an early stage and the full nature and extent of the commercial services that will be offered is unknown."
The FCC added that it "will continue to monitor location privacy issues as these services are deployed and will take regulatory action if the need is clearly demonstrated."
47 U.S.C. § 222 provides, in part: "Except as required by law or with the approval of the customer, a telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable customer proprietary network information in its provision of (A) the telecommunication service from which such information is derived, or (B) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories."
The 106th Congress enacted, and President Clinton signed, the Wireless Communications and Public Safety Act of 1999. This bill was S 800, sponsored by Sen. Conrad Burns (R-MT), and HR 438, sponsored by Rep. John Shimkus (R-IL). It designated 911 as the universal emergency service number, and promoted wireless 911 service. The bill also amended § 222 to include cell phone call location information in the definition of customer proprietary network information (CPNI).
§ 222 covers only telecommunications carriers. However, with the development of PDAs, in car map and traffic services, wireless tollbooth collection systems, Blackberry e-mail pagers, Bluetooth enabled devices, and anything else that can be embedded with a GPS chip, or other technology, location data can be collected by entities which are not telecommunications carriers.
The Cellular Telecommunications & Internet Association (CTIA) had requested a rulemaking proceeding. This is the FCC's proceeding titled "In the Matter of Request by Cellular Telecommunications and Internet Association to Commence Rulemaking to Establish Fair Location Information Practices", and numbered WT Docket No. 01-72.
CTIA President Tom Wheeler stated in a release that "This decision can only be characterized as a fumble ... Two years ago CTIA took the lead on this important consumer issue and proposed to the Commission a uniform methodology, based on our own voluntary program. Unfortunately, the FCC has chosen to reject our proposal ... Congress sent a clear message when it passed the 911 legislation -- that location information was a uniquely sensitive matter of privacy. The industry responded to Congress, but it appears as though the FCC has dropped the ball."
FCC Commissioner Michael Copps wrote a separate dissent [PDF]. He stated that "our failure to act will result in American’s privacy being threatened and adoption of location enabled devices and E911 phones being slowed." He reasoned that "Customers will shy away from services if they think that the privacy of something as sensitive as their location is up for grabs. And carriers and equipment makers will avoid being burned by consumer fear and will thus under-invest in location devices."
"The Commission should issue a Notice of Proposed Rulemaking that proposes rules to implement Congress's mandate," wrote Copps. "Instead, the majority chooses to do nothing -- inaction -- a course that is antiprivacy, anti consumer, and will slow the growth of the wireless industry."
7/24. The Federal Communications Commission (FCC) issued a public notice [PDF] in which it requests comment on the National Telecommunications and Information Administration's (NTIA) July 23 document titled "An Assessment of the Viability of Accommodating Advanced Mobile Wireless (3G) Systems in the 1710-1770 MHz and 2110-2170 MHz Bands". Comments are due by August 8.
On July 23, officials from the Federal Communications Commission (FCC), Department of Commerce (DOC), and Department of Defense (DOD), along with the heads of the CTIA and TIA, announced a plan for the reallocation of 90 MHz of spectrum for use by Third Generation (3G) wireless services. The DOC's NTIA released the Viability Assessment at this time. The participants also called for legislation amending the spectrum auction process. In particular, the administration proposes creating a trust to be funded out of the proceeds of auctions of the reallocated spectrum; this trust would then provide payments to federal entities that must relocate to other spectrum.
The FCC's notice also states that this viability assessment "has also been incorporated into the record of the Commission’s Advanced Wireless Services proceeding in ET Docket No. 00-258".
7/24. The Senate Governmental Affairs Committee held a business meeting to consider amendments to S 2452 [273 pages in PDF], the National Homeland Security and Combatting Terrorism Act of 2002. The Committee unanimously approved an amendment [PDF] offered by Sen. Bob Bennett (R-UT) and others regarding public access under the Freedom of Information Act (FOIA) to information about critical infrastructure voluntarily shared with the federal government.
The amendment creates a new Section 195 that provides, in part, that "Notwithstanding any other provision of law, information that is furnished voluntarily to the Department shall not be made available pursuant to section 552 of title 5, United States Code, provided that (1) the provider would not customarily make the information available to the public; and (2) the information is designated and certified by the provider, in a manner specified by the Department, as information that the provider would not customarily make available to the public."
The Bennett amendment also provides that "Nothing in this section shall prohibit any agency from making available, pursuant to section 552 of title 5, United States Code, information that it received independently of the Department, regardless of whether the Department has similar or identical information."
This amendment further provides that "Nothing in this section shall be construed as preempting or otherwise modifying state or local law concerning the disclosure of any information that a state or local authority received independently of the Department."
On July 23, the ACLU wrote a letter to Sen. Joe Lieberman (D-CT), the Chairman of the Committee, stating that "we urge you to oppose a misguided proposal to exempt so-called ``critical infrastructure´´ information submitted to the new Department from the Freedom of Information Act (FOIA). Such ``critical infrastructure´´ legislation, which was attached to the H.R. 5005 as reported at section 724, could have a devastating effect on the public’s right to know, muzzle whistleblowers, and undermine national security."
The ACLU added that "Such legislation is entirely unnecessary. The FOIA does not require the disclosure of national security information (exemption 1), sensitive law enforcement information (exemption 7), or confidential business information (exemption 4)."
The Committee also approved an amendment [3 pages in PDF] offered by Sen. Richard Durbin (D-IL) and Sen. Lieberman pertaining to homeland security information technology systems interoperability.
7/24. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (SDNY) against Adelphia Communications Corporation, its founder John Rigas, his three sons, Timothy Rigas, Michael Rigas, and James Rigas, and two executives at Adelphia, James Brown and Michael Mulcahey, alleging Section 10b fraud, and other violations of federal securities laws. See also, SEC release.
The complaint alleges that "This case concerns one of the most extensive financial frauds ever to take place at a public company. From at least 1998 through March 2002, Adelphia -- the nation's sixth largest cable television company -- systematically and fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them on the books of off balance sheet affiliates. It also inflated earnings to meet Wall Street's expectations, falsified operations statistics, and concealed blatant self dealing by the family that founded and controlled Adelphia, the Rigas Family."
The complaint alleges three categories of fraud. First, "Adelphia fraudulently excluded from the Company's annual and quarterly consolidated financial statements over $2.3 billion in its bank debt by systematically recording those liabilities on the books of unconsolidated affiliates". Second, "Adelphia and the other Defendants regularly misstated in press releases, including earnings reports, and Commission filings, Adelphia's reported performance in three aspects that are crucial to the ``metrics´´ used by Wall Street to evaluate cable companies: (i) the number of its ``basic cable subscribers,´´ (ii) the extent of its cable plant ``rebuild,´´ or upgrade, and (iii) its earnings ...". And third, "Adelphia used fraudulent misrepresentations and omissions of material fact to conceal rampant self-dealing by the Rigas Family ..."
7/24. The General Accounting Office (GAO) released a report [PDF] titled "Critical Infrastructure Protection: Significant Challenges Need to Be Addressed".
This report was written as prepared testimony for the House Government Reform Committee's Subcommittee Government Efficiency, Financial Management, and Intergovernmental Relations hearing on cyber terrorism on July 24. The report's author, Robert Dacey, Director of Information Security Issues at the GAO, summarized this report at the hearing.
"Developing a national CIP strategy. A more complete strategy is needed that will address specific roles, responsibilities, and relationships for all CIP entities; clearly define interim objectives and milestones; set time frames for achieving objectives; establish performance measures; and include all relevant sectors."
"Improving analysis and warning capabilities. More robust analysis and warning capabilities, including an effective methodology for strategic analysis and framework for collecting needed threat and vulnerability information, are still needed to identify threats and provide timely warnings. Such capabilities need to address both cyber and physical threats."
"Improving information sharing on threats and vulnerabilities. Information sharing needs to be enhanced both within the government and between the federal government and the private sector and state and local governments."
"Addressing pervasive weaknesses in federal information security. Because of our government’s and our nation’s reliance on interconnected computer systems to support critical operations and infrastructures, poor information security could have potentially devastating implications for our country."
7/24. The House Government Reform Committee's Subcommittee Government Efficiency, Financial Management, and Intergovernmental Relations hearing on cyber terrorism served as a forum for debate over the the Freedom of Information Act (FOIA).
The bill to create a new Department of Homeland Security, HR 5005, which will be considered by the full House on starting on July 24, creates a new exemption for critical infrastructure information voluntarily shared with the federal government. See, Sections 721-724 of the bill as approved on July 19 by the House Select Committee on Homeland Security.
Rep. Jan Schakowsky (D-IL) spoke in opposition to the exemption. She stated that "the fourth exemption to the Freedom of Information Act protects information, which is a trade secret, or information, which is commercial and privileged or confidential. This information is considered confidential if disclosure of the information is likely to impair the government's ability to obtain the necessary information in the future, or to cause substantial harm to the competitive position of the business from which the information was obtained."
The FOIA currently contains a list of exemptions, at 5 U.S.C. § 552(b). Subsection (b)(4) exempts "trade secrets and commercial or financial information obtained from a person and privileged or confidential".
Rep. Schakowsky continued that "the damage this exclusion could do is legion. The language included in the Homeland Security Bill would allow businesses and agency officials to hide lobbying activities under this exclusion. Officials from energy companies could meet with federal officials to craft government energy policy, and all of those conversations could be hidden from public view."
James Dempsey of the Center for Democracy and Technology wrote a letter to Rep. Horn and Rep. Schakowsky arguing against the exemption contained in HR 5005. He did not testify at the hearing, but Rep. Horn made his letter a part of the record. He wrote that "some FOIA disclosures can help improve infrastructure security, by ensuring governmental accountability and by bringing public pressure on owners and operators of those facilities to correct safety defects. Keeping vulnerabilities secret may aid only the hackers and terrorists."
Dempsey also argued that the Section 721-724 exemption "is not narrowly focused and may have the unintended consequence of reducing accountability for critical infrastructure vulnerabilities."
In contrast, Scott Charney, Chief Security Strategist for Microsoft, testified that "Information sharing is indeed a key aspect to public private partnerships, and progress is being made, but there remain obstacles to the greater sharing of information concerning cyber vulnerabilities with the government. We support legislation to facilitate cyber security information sharing by granting an exemption from the Freedom of Information Act (FOIA) for information about cyber vulnerabilities voluntarily shared with the government. This legislation will lead many companies to answer the Government's call that they provide it with more cyber security data."
7/24. The Senate Commerce Committee's Subcommittee on Science, Technology, and Space held a hearing on women in science and technology. See, prepared testimony of witnesses: Kristina M. Johnson (Pratt School of Engineering, Duke University), Kay Koplovitz (Koplovitz and Company), Nancy Stueber (Oregon Museum of Science and Industry), and Ana Marie Boitel (Women in Technology).
7/24. The Business Software Alliance (BSA) released a survey [PPS] of information technology professionals regarding cyber security. The BSA reported that 60 percent of those surveyed who are directly responsible for their company's network security believe that U.S. businesses are at risk for a major cyber attack in the next 12 months. See also, BSA release.
7/23. Privacilla.org published a paper [PDF] titled "The Privacy Torts: How U.S. State Law Quietly Leads the Way in Privacy Protection".
The paper states that "During the last century, American common law developed a body of privacy protecting theories that give people whose privacy has been invaded the right to sue and collect damages." The paper goes on to review the nature of tort law, the history of privacy torts, and the elements of causes of action based on privacy tort law. The paper also includes state by state list of court opinions that address privacy.
The paper also discusses the policy implications of the availability of tort remedies for invasions of privacy. It states that "in Washington, D.C., U.S. state capitols, and internationally, many politicians and bureaucrats are seeking to protect privacy without knowledge of fundamental protections for privacy in the United States: the state privacy torts."
The paper does not criticize legislators. Rather, it focuses on the privacy advocates who inform them. It states that "Many pro-regulation privacy activists and so-called consumer advocates have disinformed Congress and the public about the existence of privacy protections for consumers. They have fostered a degree of hysteria by encouraging the impression that consumers are completely unprotected by existing law. For example, the Electronic Privacy Information Center's 2000 Privacy and Human Rights book states flatly ``The U.S. has no comprehensive privacy protection law for the private sector.´´"
Moreover, the report asserts, state privacy litigation is superior to prescription regulation as a means of protecting individual privacy. Citing the privacy regulations contained in the Gramm Leach Bliley Act, the report concludes that "Attempting to refine ``notice and choice´´ is a technocratic approach that can not succeed."
The paper also cautions that "federal preemption of the state privacy torts would be a significant and objectionable retreat for privacy protection in the United States. Any preemption should be limited to regulatory statutes -- not the baseline privacy protections provided by the state privacy torts." Also, states should be cautious about legislating regarding privacy.
The paper's conclusion is that "Legislators, bureaucrats, the press, and the public should be better aware of the explicit privacy protection available in the United States through the privacy torts. This knowledge will help consumers know better when their privacy is threatened and when it is safe. And it will help dissuade legislators from experimental legislation clumsily aimed at delivering privacy by dictating information policy."
The paper does not name its author. It states only that it is "Issued by Privacilla.org". Jim Harper is the Editor of the Privacill.org, as well as the Principal of Policy Counsel and an Adjunct Fellow at the Progress and Freedom Foundation.
7/23. The Department of Justice (DOJ) issued its competitive analysis [49 pages in PDF] of the Section 271 application of Qwest Communications to provide in region interLATA services in the states of Colorado, Idaho, Iowa, Nebraska, and North Dakota. The DOJ recommends that the Federal Communications Commission (FCC) approve the applications.
The FCC concluded that "Qwest's application demonstrates that it has succeeded in opening its local markets in Colorado, Idaho, Iowa, Nebraska, and North Dakota in most respects. However, Qwest's application as filed does not demonstrate that it provides CLECs with electronically auditable wholesale bills for the UNE platform nor does it adequately address issues relating to Qwest's manual processing of wholesale orders. Thus, the Department cannot support Qwest's application as filed. However, Qwest has since submitted substantial additional evidence which, if sufficiently meaningful and reliable for the Commission to assure itself that Qwest is providing electronically auditable wholesale bills and manually processing wholesale orders timely and accurately, would justify the granting of long distance authority in Colorado, Idaho, Iowa, Nebraska, and North Dakota."
Qwest issued a release in which it stated that "Qwest filed a second application for four more states -- Washington, Utah, Montana and Wyoming -- on July 12. The DOJ is scheduled to make its recommendation to the FCC on Qwest’s second application on August 16."
This is WC Docket No. 02-148. See also, DOJ release.
7/23. Officials from the Federal Communications Commission (FCC), Department of Commerce (DOC), and Department of Defense (DOD), along with the heads of the CTIA and TIA, announced a plan for the reallocation of 90 MHz of spectrum for use by Third Generation (3G) wireless services at a press conference in Washington DC. The identified spectrum is located at 1710-1755 MHz and 2110-2155 MHz.
The participants also called for legislation amending the spectrum auction process. In particular, the administration proposes creating a trust to be funded out of the proceeds of auctions of the reallocated spectrum; this trust would then provide payments to federal entities that must relocate to other spectrum. See, full story.
7/23. Theodore Kassinger, General Counsel of the Department of Commerce (DOC), wrote a letter to House and Senate leaders, and Chairmen and ranking members of the relevant oversight committees, enclosing a draft bill titled the "Federal Spectrum Relocation Payment Procedures Act". The proposed legislation is a part of the administration's overall plan for reallocating spectrum for Third Generation (3G) wireless services.
He wrote that "Under current law, commercial entities must reimburse Federal entities for the costs of relocating from reallocated spectrum, and agencies are not authorized to accept these payments, but the spending of the payments must be appropriated. This proposal would not only change the mechanism for payment to the agencies from direct payments by the commercial entities to payments from a central Spectrum Relocation Fund funded by auction receipts, it would also authorize the Federal entities to spend the payments without further appropriation."
Mike Gallagher of the DOC's National Telecommunications and Information Administration (NTIA) stated at a press conference on July 23 that the administration has been in close contact with congressional staff, but that it does not have any Senator or Representative who is prepared to introduce this proposed bill.
Sen. Sen. Ernest Hollings (D-SC), the Chairman of the Senate Commerce Committee, and Sen. Daniel Inouye (D-HI), the Chairman of the Communications Subcommittee, stated on July 23 that "we plan to introduce bipartisan legislation".
7/23. Federal Communications Commission (FCC) Chairman Michael Powell did not attend the meeting at the Department of Commerce. However, he released a statement [PDF]. "I am pleased that 90 MHz of prime spectrum can be made available for advanced wireless services in the United States. This spectrum should provide wireless carriers with sufficient capacity to keep pace with consumer demand for new and innovative services. In the future, as events warrant, the Commission will consider making additional spectrum available for wireless services.
"I would like to laud the National Telecommunications and Information Administration (NTIA) role in this successful interagency effort, as well as the hard working staff from the Federal Communications Commission, (FCC) the Department of Defense (DOD) and other agencies. Together with DOD, NTIA has been able to achieve significant and positive results – for government, for industry, and for American consumers."
"Throughout the past year, an interagency working group with staff from the FCC, NTIA, DOD, and other executive branch agencies, has been working diligently to identify spectrum for advanced wireless services. The interagency effort examined existing federal operations in spectrum already earmarked for transfer to non-federal use -- specifically, the 1710-1755 MHz band. The terms of the transfer would have allowed certain federal operations -- both military and non-military to continue indefinitely. Permissible, grandfathered operations at 16 military facilities would have particularly impeded the development of new nationwide services. The interagency working group developed a creative plan for relocating these operations to other bands and thus clearing the band for commercial use," said Powell.
7/23. Sen. Ernest Hollings (D-SC), the Chairman of the Senate Commerce Committee, and Sen. Daniel Inouye (D-HI), the Chairman of the Communications Subcommittee, released the following joint statement: "In the Senate Commerce Committee, we have tirelessly promoted the need for additional spectrum for third generation wireless service as an issue requiring resolution by federal regulators. In the past two years, we have had hearings on this very issue in which we have encouraged all stake holders to identify and allocate additional spectrum for third generation wireless service. Therefore, it is with satisfaction that we receive the news that both DoD and industry working with the FCC and NTIA have resolved the sharing issues and identified additional spectrum for third generation wireless service."
The two also stated that "In the near future, we plan to introduce bipartisan legislation that will supplement these positive steps by addressing a number of spectrum management issues, including the reimbursement of government users when they are required to relocate their facilities to make spectrum available for commercial purposes."
7/23. The Senate Commerce Committee (SCC) approved the nomination of Jonathan Adelstein to be a Commissioner of the Federal Communications Commission. See, SCC release.
7/23. The Senate Commerce Committee (SCC) approved the nominations of Kathie Olsen and Richard Russell to be Associate Directors of the Office of Science and Technology Policy. See, SCC release.
7/22. The House will likely take up HR 5005, the Homeland Security Act of 2002, later this week. The House Select Committee on Homeland Security amended and approved the bill on Friday, July 19 by a vote of 5-4 after a day long meeting. See, HR 5005 [232 pages in PDF] as reported by the Select Committee.
The House Rules Committee has scheduled a meeting for Wednesday at 4:00 PM to adopt a rule for its consideration. See also, Rules Committee's notice regarding the amendments process for HR 5005.
President Bush gave a speech Monday morning in which he addressed progress on this bill. He said that "We are making progress in Washington. I appreciate so very much the House Select Committee getting a bill out, and it's going to get to the floor. And the Speaker was telling me today that it looks like they may get a vote this week. And the Senate is working hard on it, both Republicans and Democrats are working hard to reconcile any differences that may be had."
7/22. President Bush gave a speech at the Argonne National Laboratory in Illinois. He said that "Our scientific community is serving on the front lines of this war, by developing new technologies that will make America safer."
He also stated that "We will harness our science and our technology in a way to protect the American people. We will consolidate most federally funded homeland security research and development, to avoid duplication, and to make sure all the efforts are focused."
President Bush also used the occasion to promote HR 5005, his proposed legislation to create a new Department of Homeland Security (DHS).
The Argonne National Laboratory, which is a part of the Energy Department, states in its web site that its "scientists are adapting existing technologies to solve homeland security challenges. Relying on expertise in nuclear power, infrastructure technology and ``lab-on-a-chip´´ sensors, Argonne has developed a neutron detector, an early warning and crisis management computer simulator for mass transportation and sensors for detecting biological and chemical agents."
President Bush stated in his address to the nation on June 6 that the new DHS "will bring together our best scientists to develop technologies that detect biological, chemical, and nuclear weapons, and to discover the drugs and treatments to best protect our citizens."
Argonne is not listed as one of the laboratories to be transferred to the DHS in either in the President's original bill, or in the version approved by the House Select Committee on Homeland Security on Friday, July 19.
7/22. The General Accounting Office (GAO) released a report [84 pages in PDF] titled "Critical Infrastructure Protection: Federal Efforts Require a More Coordinated and Comprehensive Approach for Protecting Information Systems".
The report found that "At least 50 federal organizations are involved in national or multiagency cyber CIP activities that include setting policy, analyzing vulnerabilities and intelligence information, disseminating alerts and warnings on potential and actual infrastructure attacks, developing remediation plans, responding to incidents, and performing research and development. These organizations are primarily located within 13 major departments and agencies mentioned in Presidential Decision Directive 63."
The report also found that "relationships among all organizations performing similar activities (e.g., policy development or analysis and warning) were not consistently established. The President’s Critical Infrastructure Protection Board is intended to coordinate federal efforts and programs related to protecting critical infrastructures. However, an underlying challenge in this coordination is that a detailed strategy is still being developed."
The report concluded that "Without a strategy that identifies responsibilities and relationships for all cyber CIP efforts, our nation risks not knowing whether we have the appropriate structure to deal with the growing threat of computer based attacks on its critical infrastructure. The President's Critical Infrastructure Protection Board is currently developing a proposed national strategy in coordination with the private sector. It is essential that this strategy define the roles, responsibilities, and relationships among the various federal organizations involved in cyber CIP activities."
The report was prepared for the Senate Governmental Affairs Committee, chaired by Sen. Joe Lieberman (D-CT). On July 24, the House Government Reform Committee's Subcommittee Government Efficiency, Financial Management, and Intergovernmental Relations is scheduled to hold a hearing titled "Cyber Terrorism: Is the Nation's Critical Infrastructure Adequately Protected?"
7/22. Federal Communications Commission (FCC) Chairman Michael Powell wrote a letter [PDF] to WorldCom P/CEO John Sidgmore regarding bankruptcy and continuity of service. He wrote that "Because of WorldCom's size and scope, it is particularly important, both to millions of consumers and to the integrity of the nation's communications network, that WorldCom integrate its regulatory requirements into its planning during the bankruptcy process, and that it take these requirements seriously."
Powell made two main points. First, he asserted that "If WorldCom's bankruptcy proceeding results in a restructuring or acquisition of WorldCom or its assets, such a restructuring or acquisition could only take place after the Commission granted required approvals to transfers of control over licenses or authorizations granted by the Commission."
Second, Powell stated that "If WorldCom's bankruptcy proceeding leads to a discontinuance of services, then, to the extent WorldCom provides services reached under section 214(a) of the Act, such a discontinuance could only take place if WorldCom first meets the notice requirements of the Commission's rules." However, Powell's letter is silent as to which services he asserts are "reached under section 214(a)".
Section 214, which applies only to common carrier regulation, provides, in part, that "No carrier shall discontinue, reduce, or impair service to a community, or part of a community, unless and until there shall first have been obtained from the Commission a certificate that neither the present nor future public convenience and necessity will be adversely affected thereby; except that the Commission may, upon appropriate request being made, authorize temporary or emergency discontinuance, reduction, or impairment of service, or partial discontinuance, reduction, or impairment of service, without regard to the provisions of this section. As used in this section the term ``line´´ means any channel of communication established by the use of appropriate equipment, other than a channel of communication established by the interconnection of two or more existing channels ..."
7/22. John Sidgmore, P/CEO of WorldCom, held a press conference in New York City in which he discussed WorldCom's Chapter 11 bankruptcy filing, WorldCom's accounting problems, debtor in possession financing, new board members, and other issues.
He stated that a Chapter 11 proceeding is the "only way to provide for the company's future". He added that he hopes that WorldCom will "emerge on the other side of the process as a stronger and much healthier enterprise."
He was asked about an exodus of suppliers and customers. He responded that "I think the worst possible period ... was the last three months. ... Now, you know, in a strange way, under Chapter 11, we will be stabilized." He added that "we still have not lost any substantial customers".
He also addressed his hope that WorldCom will emerge from bankruptcy intact. He stated that "I think, if our plan is successful, I think our plan is essential going to be, essentially to keep the company intact. That doesn't mean that we won't have some assets that are restructured."
Sidgmore continued that "It doesn't mean that we won't get out of some businesses. We have already announced that we are going to get out of the wireless resale business. We announced that we have got some other assets for sale. But, these are all pieces that are on the fringe of the core of WorldCom."
He stated that "I suspect that our plan will include keeping the core, the center pieces, of WorldCom intact. And, that would include the UUNet business, the Internet business, the long distance business in the United States, both for consumers, and for corporations, the data business around the world, the provision of service to global accounts, the major attention we pay to the European account. All of those things are clearly going to be a piece of our future. And so, I guess what I am saying is, the reorganization here is not going to be a reorganization ... where you jump in and you sell off all of the assets. It is not going to be a liquidation, in my opinion. And the courts and the creditors may decide differently.
He also stated that "The value in WorldCom is not in the switches and the pipes that we have underground and the hard assets. The value in WorldCom is the twenty million customers, the brands, you know, like WorldCom, MCI, UUNet, et cetera. The customer relationships ... that is what creates the value here. Breaking it apart, I think, is not going to help."
In response to a question about the status of UUNet, he said this: "But, I think the more important thing, which has been discussed several times, is, you know, what is the separability of those organizations. And, frankly, the UUNet organization is pretty well integrated, particularly on the sales and marketing side, and customer service as well, for that matter, into the rest of WorldCom. So these are not separate business units in the traditional sense anymore."
Sidgmore has been CEO of WorldCom since April. Before that, he was Vice Chairman. He also served as an advisor on Internet and technology matters. He came to WorldCom in 1996, when it purchased UUNet.
WorldCom filed a Chapter 11 petition [PDF] in the U.S. Bankruptcy Court (SDNY) on Sunday, July 21. WorldCom is represented in the proceeding by the law firm of Weil Gotshal.
7/22. Walter McCormick, P/CEO of the U.S. Telecom Association (USTA), wrote a letter [PDF] to Federal Communications Commission (FCC) Chairman Michael Powell, and the other FCC Commissioners, regarding the WorldCom bankruptcy proceeding.
The USTA is a group that represents incumbent local exchange carriers (ILECs). McCormick wants the FCC to take steps to minimize service disruptions and financial loss to the ILECs resulting from WorldCom's bankruptcy proceeding. He also wants the FCC to continue to move ahead with various of its deregulatory proceedings, notwithstanding WorldCom's bankruptcy.
McCormick argued that "it is imperative for the FCC to resist suggestions ... that it set aside proceedings that are equally important to the continued health and stability of the telecommunications industry, including the UNE Triennial Review, its Broadband dockets, and pending and future section 271 applications. The FCC must bring such proceedings to a close as quickly as possible."
He also stated that "any actions by the FCC should be designed to serve two equally important goals. First, any customer disruptions as a result of this or other bankruptcy filings should be kept to a minimum. Second, and equally important, the FCC should take affirmative steps to ensure that WorldCom’s impending bankruptcy does not undermine the financial stability of other carriers that provide services to it, and that such supplying carriers have adequate assurances that they will be paid for those services."
He elaborated that the "ILECs intend to fulfill their obligations to continue providing services under the bankruptcy laws. They should not, however, collectively be forced to absorb hundreds of millions of dollars of costs each month for interstate access, intrastate access, and the provision of UNEs, in order for WorldCom to continue to provide service, without adequate assurance of payment." McCormick also said that "the FCC will need to find a mechanism to address the impact of WorldCom's potential unpaid contribution to Universal Service."
McCormick asked the FCC to do several things. He wrote that the FCC should advocate "payment to carriers that provide service to a carrier debtor in bankruptcy." He wrote that the FCC should allow WorldCom's suppliers to pass on to their customers a portion of the costs of unpaid WorldCom debts. He wrote that "the FCC should provide a clear mechanism for the recovery of non-collectible charges as a result of the bankruptcy. For example, the FCC could allow recovery through the exogenous cost mechanism in its price cap rules or through a limited waiver of those rules."
McCormick also wrote that "the FCC should make clear that its pricing rules require that carriers providing unbundled elements be allowed to include a compensatory factor to recover non-collectible UNE charges."
7/22. The U.S. Court of Appeals (7thCir) issued its opinion [PDF] in Ameritech v. McCann, a case holding that the 11th Amendment does not bar an electronics communications provider from suing a state law enforcement agency in federal court for prospective injunctive relief for an ongoing violation of the Electronic Communications Privacy Act (ECPA).
Background. Ameritech (now SBC) is an incumbent local exchange carrier in the state of Wisconsin. Michael McCann has been the District Attorney of Milwaukee County for 33 years. The DA's office requests and receives electronic data from Ameritech pursuant to the ECPA, which is codified at 18 U.S.C. § 2510, et seq.
The ECPA provides, among other things, that electronic communications providers shall provide government entities certain electronic records pertaining to communications. The ECPA also provides that such government entities shall "pay the person or entity assembling or providing such information a fee for reimbursement for such costs as are reasonably necessary and which have been directly incurred in searching for, assembling, reproducing, or otherwise providing such information." McCann requests data from Ameritech under the ECPA, but refuses to pay for it.
District Court. Ameritech filed a complaint in U.S. District Court (EDWisc) against McCann, in his capacity as the DA of Milwaukee County, seeking a declaratory judgment that McCann must comply with the ECPA. McCann did not dispute that he requests and receives, but does not pay for, electronic data. Rather, the deadbeat DA argued that this is a collection action brought in federal court against a state, and is hence barred by the 11th Amendment. The District Court granted McCann's motion to dismiss, holding that suit is barred by the 11th Amendment.
11th Amendment. "The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."
Appeals Court. The Appeals Court reversed. The Court reasoned that while the state will be financial affected by the requested declaratory judgment, this is not an action for payment of a debt incurred in the past, which would be barred by the 11th Amendment. Rather, it is a suit which seeks prospective injunctive relief, which is not barred by the 11th Amendment.
The Court relied on the seminal case of Ex Parte Young, 209 U.S. 123 (1908). The Court also relied upon the Supreme Court's decision in May in Verizon Maryland v. Public Service Comm. of Maryland [PDF], in which the Court wrote that "In determining whether the doctrine of Ex Parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective."
7/21. WorldCom filed a Chapter 11 petition for bankruptcy in U.S. Bankruptcy Court (SDNY). WorldCom stated in a release that "WorldCom and substantially all of its active U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11".
Federal Communications Commission (FCC) Chairman Michael Powell stated in a release that "While I am deeply concerned by this development, I want to assure the public that we do not believe this bankruptcy filing will lead to an immediate disruption of service to consumers or threaten the operation of WorldCom's Internet backbone facilities. It is my understanding that WorldCom has obtained funding necessary to continue operations during the pendency of its bankruptcy proceeding."
Powell continued that "This Commission will act vigilantly, and to the full extent of its statutory authority, to protect the integrity of the telecommunications network and protect consumers against any abrupt termination of service. To that end, I am contacting WorldCom to reiterate that the company's regulatory obligations will continue to apply. We will continue to gather information relevant to WorldCom's operations and advise the company of its regulatory obligations to its customers. This Commission stands ready to intervene in bankruptcy proceedings as necessary to ensure that the bankruptcy court is aware of and considers our public interest concerns."
Powell also addressed the subject of continuity at WorldCom, and related issues, at a press briefing on July 16, and in his responses [PDF] to a letter from Rep. Ed Markey (D-MA).
Go to News from July 16-20, 2002.

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