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Executive Summary: Week of May 5, 2008 Executive Summary: Week of May 5, 2008

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EXECUTIVE SUMMARY

Executive Summary: Week of May 5, 2008

Intellectual Property

Key Backer Doubtful Of Patent Bill's Prospects

An early proponent of legislation that would overhaul the U.S. patent system told a high-tech trade group this week that the bill is basically dead for the remainder of the 110th Congress. Sen. Sheldon Whitehouse, D-R.I., a freshman member of the Senate Judiciary Committee, said it is unlikely Majority Leader Reid will give up floor time for the controversial measure "unless it's a sealed deal." The House passed a companion bill last September. Senate Judiciary Chairman Patrick Leahy "did a wonderful job" on the measure, which he introduced a year ago, Whitehouse said. But he contended that opponents left Leahy with "no maneuvering room," while noting that lengthy negotiations with Judiciary ranking member Arlen Specter had broken down. Leahy said last month that "just a handful of words" -- namely proposed changes in how damages are awarded in infringement lawsuits - had stalled the measure. But neither he nor Specter has conceded that the bill is officially off the table. The measure "should and must be revisited," if it fails to advance this year, Whitehouse said in his speech to the Computer and Communications Industry Association. Meanwhile, Specter told the group that significant progress has been made on damages language, but that "we're still not there yet." The legislation's proposed broadening of the process for handling "inequitable conduct" cases, which would require patents to be ruled invalid if plaintiffs were not forthcoming in their applications, remains a thorny issue. Sen. Tom Coburn, R-Okla., told CCIA he is not convinced of the bill's demise this year, adding there is "still some behind-the-scenes negotiating going on."

 

Intellectual Property

House Passes Intellectual Property Enforcement Bill

The House this week passed legislation aimed at enhancing U.S. intellectual property enforcement, one week after the measure was approved by the House Judiciary Committee. The bill, sponsored by Judiciary Chairman John Conyers and ranking member Lamar Smith, would boost penalties for piracy and counterfeiting, particularly for repeat offenders, and establish a high-level IP czar to oversee domestic and international IP enforcement issues. Justice Department officials expressed concerns with portions of the bill that they believe would lessen the effectiveness of current IP initiatives. But Smith called the vote "a step in the right direction for IP enforcement and the economy" and urged the Senate to act quickly on a companion measure. Several related Senate bills have been introduced during this Congress, but they differ substantially from the House legislation in several respects. The Copyright Alliance, which represents entertainment, media and high-tech companies, lauded the passage of the House legislation. U.S. Chamber of Commerce President Thomas Donohue also praised the bill, saying the bill's penalties "send an important message that IP theft will not be tolerated."

Telecommunications

 

Conyers, Lofgren Offer Network Neutrality Bill

As the debate continues in the House Energy and Commerce Committee over a bill that would ban discrimination of Internet content by broadband companies, the House Judiciary Committee entered the fray this week with its own network neutrality proposal that offers an antitrust approach to preventing anticompetitive online practices. The bill, sponsored by Judiciary Chairman John Conyers and Rep. Zoe Lofgren, D-Calif., would require pipeline providers such as Comcast, AT&T and Verizon to interconnect on "a reasonable and nondiscriminatory basis" and ensure all legal content, applications and services have an equal opportunity to reach consumers. A similar bill was introduced in the 109th Congress. Energy and Commerce Telecommunications and the Internet Subcommittee Chairman Edward Markey, D-Mass., and Rep. Charles (Chip) Pickering, R-Miss., introduced their FCC-focused bill in February. They held a hearing on the topic this week at which they heard from proponents of network neutrality legislation and heads of the main trade groups for cable and telecommunications companies who oppose the measure. One prominent academic, University of Pennsylvania law and communications professor Christopher Yoo, argued that the Internet is too vast, complex and fluid to be subject to government intervention aimed at preserving its openness. And even Pickering contended repeatedly during the hearing that allegations of neutrality violations should be handled on a case-by-case basis and that broad regulation is unwarranted. But Lofgren contended in a statement that "recent events have shown that net neutrality is more than a hypothetical concern." A handful of those incidents involve allegations of content filtering or blocking by major Internet providers. The companies have argued that their actions were network management techniques geared toward balancing high traffic volumes to preserve service for all users.

Telecommunications

FCC's Staffer's Temporary Move To Hill Raises Eyebrows

The temporary reassignment of a top adviser to FCC Chairman Kevin Martin to the House Energy and Commerce Committee staff is prompting concerns that the arrangement could undermine the panel's investigation of the agency. Ian Dillner, the chairman's legal adviser on wireless telecommunications issues, is listed as an aide to Martin on the FCC's Web site and continues to draw his salary from the commission.

But he recently began working for the minority staff of the Energy and Commerce Telecommunications and the Internet Subcommittee, filling in for a staffer on maternity leave. The presence of a Martin loyalist on the panel has raised eyebrows, especially since the timing coincides with a critical phase of the investigation. Over the next few months, the committee is expected to ratchet up its probe, which is largely focused on allegations that Martin used aggressive, even questionable, tactics to pursue his mostly deregulatory agenda. "There is a whopping conflict of interest," said an industry source, expressing concern that Dillner could serve as a back-channel source of information to Martin. Martin, a Republican, insisted that the arrangement is routine, noting it's "been a practice here at the commission for a long time." But Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, noted that while such arrangements are common, it does not mean they are appropriate. Dillner has been assigned to the telecom subcommittee and not the Oversight and Investigations subpanel, which is the main panel looking into Martin's leadership at the FCC.

 

Homeland Security

Rockefeller Floats Compromise On FISA Revisions

Lawmakers and aides cited some movement this week in negotiations on revisions to the Foreign Intelligence Surveillance Act -- but several congressional sources cautioned that a final deal could remain elusive. Behind-the-scenes negotiations appeared to take on urgency after Senate Intelligence Chairman John (Jay) Rockefeller floated a proposal that his spokeswoman described as "the best area of compromise" after weeks of talks with Democrats and Republicans from both chambers, the White House, Justice Department and Director of National Intelligence Mike McConnell. She would not discuss any details. Across Capitol Hill, House Intelligence Chairman Silvestre Reyes said he believed a final deal could be reached by the Memorial Day recess. "I think we've got 90 percent of it done," he said. Reyes said telecommunications firms have been given proposed legislative language to review. "The key is the telecoms," he said. He said the language would require a court to determine whether telecommunications companies should be granted immunity from lawsuits arising from their cooperation with the Bush administration's warrantless electronic surveillance activities since the Sept. 11, 2001, terrorist attacks. Some Democrats, such as Rep. Jane Harman of California, want to ensure that the final deal empowers the court to conduct a thorough review of the cases. Other sources cautioned that problems remain. Rep. Rush Holt, D-N.J., a member of the House Intelligence Committee, added, "I'm told that there's a compromise taking shape [but] from what I've heard, there may be movement in the wrong direction." In addition, several Senate Republicans, such as Senate Intelligence ranking member Christopher (Kit) Bond, do not support the Rockefeller proposal, a Senate GOP aide said. Meanwhile, Senate Republicans are still waiting for House Majority Leader Hoyer to present his own offer of a compromise.

Homeland Security

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FBI Lifts Gag Order Against Library Site

The FBI has withdrawn a special subpoena issued last year to a popular digital library known as the Internet Archive, which let agents analyze the nonprofit's records without a warrant. The agency lifted a gag order on the organization last week as part of a settlement with watchdog groups that sued the government over its use of national security letters, the legal basis for which has prompted legislation and several hearings on Capitol Hill. The NSL was served on the Internet Archive in November, asking for personal information about one of the repository's users, including the individual's name, address and any pertinent electronic communication transactional records. The archive's founder, Brewster Kahle, only turned over publicly available data and decided to fight the request with the help of the American Civil Liberties Union and the Electronic Frontier Foundation. Congress passed a law in 2006 limiting the FBI's power to issue the information requests to U.S. libraries and this is the first known challenge to a security letter served on a library since the measure's passage. Kahle said he "had to challenge something that was clearly wrong." Bills have been introduced in both the House and Senate that would impose limits on when and how NSLs, and corresponding gag orders, can be used. Rep. Jerrold Nadler, D-N.Y., sponsor of the House bill, said this lawsuit and others like it have made clear that "NSL authority has been used improperly and that some of its provisions are overbroad." FBI Assistant Director John Miller said the subpoenas are "indispensable tools" in antiterrorism probes.

Intellectual Property

'Orphan Works' Bill Advances In House

The House Judiciary Courts, the Internet and Intellectual Property Subcommittee approved "orphan works" legislation this week aimed at reworking a portion of U.S. copyright law that deals with musical tracks, writings, images, videos or other content whose owners cannot be easily located. The panel adopted a manager's amendment by Courts, the Internet, and Intellectual Property Subcommittee Chairman Howard Berman, D-Calif., and others that would add museums to the educational institutions that fall under an orphan works "safe harbor." Another section addresses concerns that a copyright owner "could demand any amount of money, call it reasonable and subject a user to damages," Berman said. That section would compel parties to negotiate before they litigate, he said. The manager's amendment would require a court, before granting injunctive relief, to consider a user's interest in the copyrighted work. Rep. Zoe Lofgren, D-Calif., offered and withdrew several amendments to highlight changes she said are still needed. One would have eliminated a requirement that individuals notify the Copyright Office of their intention to use an orphan work. Lofgren called that language "redundant and excessive." Her proposals also would tweak the safe harbor section and encourage "good faith" negotiations between parties in a feud over a copyrighted work.

Elections

House Panel Backs Bill Offering Alternative To E-Voting

The House Administration Committee approved legislation this week that would grant funds to states and localities to pay for paper ballots at polling places as a backup in case voting machines failed. The bill was approved 5-3 along party lines with Democrats in the majority. Republicans argued the $75 million authorization measure was too costly, would get the federal government into something states and localities are doing, and would give local governments the idea that they could get money even though a companion appropriations bill has not even been considered, let alone passed. House Administration Chairman Robert Brady said the bill was a way for localities to help guarantee fair elections. Rep. Zoe Lofgren, D-Calif., who introduced the measure, swatted away amendment after amendment and kept her bill intact. The most controversial amendment was a move by Rep. Kevin McCarthy, R-Calif., to deny funds to any jurisdiction that failed to require a picture identification card at the polls. McCarthy argued that his amendment, which was rejected, did not mandate a voter ID card, but rather said that if a state wanted to go after federal funds for paper ballots, it had to require the cards.

Homeland Security

Panel Calls For More Scrutiny Of DHS Cybersecurity Effort

The Senate Homeland Security and Governmental Affairs Committee is calling for more transparency from the Bush administration after the Homeland Security Department requested a large boost in its cybersecurity budget and announced a new, mostly classified plan to ramp up security of government computer networks. Senate Homeland Security and Governmental Affairs Chairman Joseph Lieberman and ranking member Susan Collins wrote to Homeland Security Secretary Chertoff this week seeking a detailed explanation about the secrecy and scope of the project as well as information about its heavy reliance on contractors. The senators want to know why the private sector, which controls the vast majority of the nation's cyber infrastructure, has been left in the dark. The letter noted that DHS' request for an additional $83 million for FY09, coming on top of $115 million awarded for FY08, would amount to a tripling of the department's cybersecurity budget since 2007. Lieberman and Collins wrote that while they are pleased the department is making cybersecurity such a high priority, "we believe that increased openness and information sharing with Congress, the private sector, and the American public will aid in the eventual success of the initiative." DHS has a primary role in implementing the cybersecurity initiative, which is under development, although other agencies such as the National Security Agency are involved, they said. DHS Undersecretary for National Protection and Programs Robert Jamison briefed the committee during a closed-door hearing in March, but the administration has been reluctant to share unclassified portions of the program with Congress and the public, Lieberman and Collins wrote. Lack of information about the program might make federal agencies less likely to plan for IT needs and industry may be less likely to do business with government, they noted. Public concerns about the project's privacy and civil liberties safeguards must also be addressed, they contended.

Employment

Immigration Hearing Draws Crowd, But Little Movement Seen

The first of several House hearings to consider changes in immigration laws drew a crowd this week, a strong sign that passion over the issue remains even though Democratic leaders have not committed to bringing any specific legislation to the floor for a vote. The House Ways and Means Social Security Subcommittee, which held the hearing, is considering competing bills that would require employers to verify the citizenship of their workers. No consensus emerged, however, on how best to revise the nation's immigration laws. "I hope our fact-finding today will help the subcommittee and the Congress better understand the challenges and consequences of making employment verification mandatory," said Ways and Means Social Security Subcommittee Chairman Michael McNulty, D-N.Y. House Democratic leaders decided to hold hearings on immigration measures in response to mounting political pressure from conservative lawmakers, who want to crack down on illegal immigrants, and from liberal and Hispanic lawmakers, who want to create a temporary guest-worker program for foreigners. The hearing showed that deep divisions remain over whether employers should be required to use the so-called E-verify system, a program administered by the Homeland Security Department that uses the Social Security Administration's database to verify citizenship. A bill by Rep. Heath Shuler, D-N.C., would mandate that employers use E-verify for all current workers and new hires. Critics argue that E-verify is not ready to be a national program, as only about 65,000 employers out of 6 million nationwide use it on a voluntary basis. Ways and Means Social Security Subcommittee ranking member Sam Johnson, R-Texas, who has authored a competing bill, said he believes Congress will pass some immigration measures this year, but not comprehensive legislation that creates a guest-worker program.

Trade

U.S. Pushing China To Drop Technology Standards

The United States is trying to persuade China to abandon home-grown information technology standards that could keep U.S. companies out of its market - but a top U.S. trade official this week declined to say whether it could lead to another World Trade Organization case by the United States against China. "I'm not going to get into where we are or what tools we're going to use," said Commerce Undersecretary for International Trade Christopher Padilla after a speech to the U.S. Chamber of Commerce. "At this point, we're just talking bilaterally." He also outlined the administration's communication strategy for pushing the Korea Free Trade Agreement -- starting by saying the potential for new trade is huge. He and Commerce Secretary Gutierrez will travel to South Korea next week to help lay the groundwork for President Bush's effort to pass the agreement. "If Americans are concerned about competition from China, what better way to respond than by expanding the circle of free trade with an important ally like Korea," Padilla said. He noted the discussions with China involved technical standards and security protocols for IT products such as routers and switches that are used to build the Internet. "They are looking at some fairly unique Chinese security encryption standards for that that would be very costly and that would potentially cost our suppliers [the] ability to operate in that market," Padilla said, adding they appear to benefit Chinese firms. A possible WTO case would rest on the idea that China is creating technical barriers to trade by crafting unique standards for its industry. But Padilla noted the current conversation with China is focused on trying to convince Chinese officials that it is in their interest to adopt market-based standards.

Net Governance

Lawmakers Concerned About Possible ICANN Move

Key House lawmakers raised concerns this week that the international group that manages the Internet's address system may be moving its headquarters from California to Brussels, Belgium. According to unconfirmed reports, the Internet Corporation for Assigned Names and Numbers, currently based in Marina Del Ray, Calif., has been considering the overseas move at the urging other governments and some industries.

House Energy and Commerce Chairman John Dingell and ranking member Joe Barton joined 14 other colleagues in asking Commerce Secretary Gutierrez to provide more information in two weeks about ICANN's future. "Any change that threatens the important U.S. role in promoting U.S. commercial and free speech principles on the Internet can only hurt the consumers and businesses that count on this network every day," the lawmakers wrote to Gutierrez. The letter also praised the Bush administration's continued oversight of ICANN, which is in the midst of a transition shifting more coordination of technical functions of the Web to the private sector.

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