Telecom
FCC To Pump Up The Volume
FCC Chairman William Kennard will detail a five-year plan for restructuring his agency into an enforcement body, rather than a rule-making bureaucracy, at a House hearing next week. Kennard will release a report explaining his plan at a House Telecommunications Subcommittee hearing next Wednesday, which was called by Chairman Billy Tauzin R-LA to study the FCC's reauthorization. The chairman said he welcomes the reauthorization process, but hopes lawmakers do not use it to tinker with the 1996 Telecommunications Act.

Export
Moving Violation
Commerce Department Undersecretary William Reinsch said Friday that legislation to loosen controls on the export of encryption would violate the international Wassenaar Arrangement approved in December unless modifications are made. Reinsch, who heads the Bureau of Export Administration, reiterated his concern about Rep. Bob Goodlatte R-VA's H.R. 850 during a Commerce Department meeting of the President's Export Council Subcommittee on Encryption, an advisory group made up of industry and government officials. H.R. 850 would allow for the export of mass-market encryption products without a government license. Current law bans the export of mass-market products with a strength level over 56 bits. H.R. 850 was approved without amendment by voice vote Thursday.

Encryption
Kerrey Now Seeks Encryption Exports
Sen. Robert Kerrey D-NE now says he believes national security and law enforcement can be enhanced by allowing the export and use of stronger encryption. Kerrey was the chief co-sponsor of encryption legislation introduced in 1997 by Senate Commerce Committee Chairman John McCain R-AZ that aimed to promote the use of encryption products with a "key recovery" feature. Key recovery would enable a third party to gain access to the "key" needed to unscramble encrypted data or communications. The bill maintained controls on strong encryption unless they included the recovery feature. That legislation was rejected by the high-tech industry, which believed it was too close to the White House position.

Encryption
Security Measures
House Science Committee Chairman James Sensenbrenner R-WI plans to reintroduce his Computer Security Act, which would require the National Institute of Standards and Technology to encourage agencies to use commercial public-key encryption tools. The failed bill, which passed the House in the 105th Congress but flopped in the Senate, gives NIST primary responsibility for developing computer security policies and standards for civilian agencies. The bill would also require NIST to develop standards to evaluate the strength of encryption products.

Taxes
The National Association of Counties and the U.S. Conference of Mayors claim representatives from their organizations are entitled to two seats on a congressionally-appointed Internet tax commission, according to a complaint the groups filed in U.S. District Court in Washington, DC, on Monday. The associations followed through on their threat, issued last week, by seeking an injunction to prohibit the Advisory Commission on Electronic Commerce from meeting until congressional leaders change the panel's membership. The groups are suing all of the panel's individual business representatives, as well as the Commission itself. The Internet Tax Freedom Act, which established the commission, states that eight members of the panel should represent state and local governments and eight should represent the business community. (The remaining three members represent the Clinton Administration.) When the committee appointments were named in December, nine were from business and seven from government. Meanwhile, Sen. Judd Gregg R-NH, who was a key force in moving the Internet tax moratorium law through the 105th Congress, said Wednesday he hopes the commission never meets.

Taxes
Net Alcohol Down The Hatch?
The controversial practice of selling alcohol over the Internet should be studied by the congressionally-appointed Internet tax commission, one California lawmaker said Tuesday in opposing a call for separate regulation. Senate Judiciary Committee Chairman Orrin Hatch R-UT said Monday he favors a law that would allow states to bar companies from selling alcohol on-line. But Rep. George Radanovich R-CA said the issue of teens buying booze online is a red herring put out by liquor wholesalers who feel threatened by growing Internet sales. Radanovich has sent a letter to Gov. James Gilmore R-VA, who has assumed leadership of the Advisory Commission on Electronic Commerce, to request that online alcohol sales be addressed by the panel.

Taxes
North Dakota Tax Commissioner Rick Clayburgh R says levying the state's two-year-old telecommunications tax on ISPs is not a violation of the federal Internet Tax Freedom Act. Clayburgh said the 2.5 percent tax on adjusted gross receipts on telecom service providers, enacted two years ago, has always included ISPs. Because it was imposed before the federal moratorium on such assessments was enacted, Clayburgh argued, it is permissible. A bill making its way through the North Dakota legislature, H.R. 1108, just clarifies the intention of the original bill, Clayburgh said.

Antitrust
All Quiet On The Intel Front
Intel and the FTC have reached a tentative settlement in their antitrust war, the FTC announced Monday. The eleventh-hour truce averts a major technology antitrust trial previously scheduled to open Tuesday. The proposed settlement suspends any trial while the agency's commissioners consider whether to accept the agreement, which was entered into between the FTC's Bureau of Competition and Intel. However, the FTC's Office of Consumer Protection may be plotting another battle against Intel. The consumer protection division will meet next Monday with officials from the Center for Democracy and Technology, who have urged the FTC to file a "deceptive and unfair trade practice" against Intel's new Pentium III chip. In its complaint, the non-profit Center alleged that contrary to Intel's claims, consumers may not be able to control whether the chip's ID number feature is turned on or off.

Privacy
Window Pains
A feature buried in Microsoft's Windows 98 may compromise users' privacy, a revelation that is pushing some privacy advocates to work overtime, and emboldening some members of Congress in their data privacy legislation drives. "The reports regarding the privacy flaw in Microsoft Windows once again underscores the need for a privacy bill of rights for the information age," said Rep. Edward Markey D-MA, the ranking member on the House Telecommunications, Trade and Consumer Protection Subcommittee. The flaw came to light last week when a Boston software executive found that Windows 98 generates a unique identification number that could be used to track the identity of users without their knowledge or consent.

Privacy
Hypocriticism
In the wake of privacy debacles involving Intel and Microsoft, Rep. Michael G. Oxley R-OH has accused some computer software and hardware makers of hypocrisy in the encryption export debate. In a letter sent to congressional colleagues Wednesday, Oxley criticized some members of the tech industry with citing user privacy as a reason to allow exports of stronger encryption products than now legal, while the same companies build features into their products that he says would undermine privacy.

Privacy
Sens. Edward Kennedy D-MA and Patrick Leahy D-VT introduced their Medical Information Privacy and Security Act even as a less-stringent proposal is unveiled by Sens. James Jeffords R-VT and Christopher Dodd D-CT in a sign of the battles ahead over safeguarding the privacy of medical records. At least three proposals are expected, notwithstanding the Aug. 21 deadline mandated by the Health Insurance Portability and Accountability Act of 1996 to create a plan to protect such records, including those housed in electronic databases. Sen. Robert Bennett R-UT is also expected to introduce legislation offering medical privacy protections, but with fewer restrictions on the use of data than in the other proposals.

Y2K
Liability
The Senate has already started to hold hearings on Y2K legislation sponsored by Senate Commerce Committee Chairman John McCain R-AZ, and hearings are pending on a competing bill sponsored by Senate Judiciary Committee Chairman Orrin Hatch R-UT and Sen. Dianne Feinstein D-CA. McCain made clear on Thursday that he is not meeting with Hatch to develop a compromise bill. On a related front, the Senate should act to fill vacant federal judgeships to brace the court system for a flood of Y2K-related legislation, former federal judge William Sessions said Thursday. Sessions, who in addition to being the former chief judge for the U.S. District Court for the Southern District of Texas is also a former FBI director, told the Senate's special Y2K committee that the court system will be hard-pressed to handle a rash of new lawsuits if there are not enough judges to process them.

Business
Two key House Democrats have signed on to legislation that would permanently extend the R&D tax credit, a top legislative priority of many high-tech companies. House Minority Leader Richard Gephardt D-MO and House Ways and Means Committee ranking member Rep. Charles Rangel D-NY announced their support for the tax credit legislation, H.R. 835, earlier this week. The R&D tax credit has usually been extended for just one year at a time. Supporters of a permanent extension say the uncertainty of the year-by-year approach has made companies reluctant to invest in long-term research projects.

Campaigns
Gorton vs. Gore... Again
In his second attack on Vice President Al Gore in a week, Sen. Slade Gorton R-WA issued a statement Thursday night declaring that the Gore is pursuing policies "aimed at the destruction of two of Washington State's economic crown jewels," hydroelectric power and Microsoft. Gorton took to the Senate floor for a speech criticizing Gore for his refusal to answer the question of whether, if elected president, he would continue antitrust prosecution of Microsoft. Gorton took Gore to task for what he termed "personal attacks" by White House spokesmen, who mocked Gorton, who is dropping in polls in his home state, as "suffering from a Y2K bug." And he ridiculed Gore for taking credit for the economic health of the state of Washington in his quest for the presidency.