Cyber Security
Internet Worm Spreads, Forces Agency Closures For Patches
     An Internet worm that attacks recent versions of the Microsoft Windows computer-operating system spread quickly around the world this week, shutting government agencies, slowing corporate networks and crashing systems owned by consumers and small businesses. The worm infected some machines in District of Columbia government offices and forced the Maryland Motor Vehicle Administration to close one afternoon after its computers were infected. The worm also crashed the computer network at the U.S. Court of Federal Claims, sending some employees home. A spokesman for the U.S. Homeland Security Department said the worm had a "sporadic" effect on federal agencies' networks. A blackout in the Northeast later in the week, meanwhile, had little impact on the Internet but jammed cellular telephone systems.

Intellectual Property
Agency Criticizes Copyright Office Stance On DMCA
     The head of the National Telecommunications and Information Agency (NTIA) criticized the Copyright Office for imposing what she called a higher burden than necessary on individuals and organizations seeking exemptions from digital copyright law. In a letter to Register of Copyrights Marybeth Peters, NTIA administrator Nancy Victory said the high burden of proof demanded by the Copyright Office is "inconsistent with the opportunity that Congress intended to afford the user community." The Copyright Office is trying to determine whether any exemptions from the 1998 Digital Millennium Copyright Act should be granted to address concerns that anti-piracy technologies adversely affect individuals' ability to use copyrighted works legally.

Intellectual Property
ID-Masking Features Add Twist To File-Sharing Debate
     The music industry faces new technological challenges as consumers who swap online music files turn to file-sharing software that helps them navigate the online world anonymously. But by adding those identity-masking features, said Anthony Lupo, an Internet expert with the law firm of Arent Fox Kintner Plotkin & Kahn, "these companies are playing a very risky game. ... [I]t looks like they are helping people hide their identities" from the recording industry and others on the hunt for copyright infringers, and brings the software companies "closer to being found liable as contributory or vicarious infringers." Brian O'Neal, a spokesman for StreamCast Networks, which makes the Morpheus file-sharing program, countered that his company's new privacy protections are not aimed at the recording industry.

Intellectual Property
File-Sharing Cases Could Ensnare Education Community
     Universities and college students could be ensnared by the recording industry's litigation campaign against file sharing over computer networks, according to a report by a joint committee of the higher education and entertainment communities. The paper outlines the legal issues surrounding file sharing, with its focus on the huge liabilities that students are likely to face if they use technology to swap digital songs. The committee is preparing for an education campaign urging college students not to engage in piracy. In other news, a federal court rejected music industry subpoenas demanding that the Massachusetts Institute of Technology and Boston College reveal the identities of students who allegedly shared copyrighted music online.

Budget
Budget Plans Differ For Transportation, Border Security
     The House- and Senate-passed versions of the bill to fund the Homeland Security Department in fiscal 2004 would provide large sums for transportation- and border-security technologies but would make significant cuts in certain areas as well. The Senate version would provide $29.4 billion overall to the House's $29.2 billion. The White House requested $28.4 billion. The Transportation Security Administration would receive $5.2 billion under the House version, compared with nearly $5.4 billion from the Senate. The Bureau of Customs and Border Protection would get $5.1 billion from the House, while the Senate would give the bureau $4.9 billion. Both chambers voted to fund the Computer Assisted Passenger Pre-screening System (CAPPS II) at $35 million.

Budget
Appropriators Differ Over Allocation Of Broadband Funds
     House and Senate appropriators have approved programs that would help fund infrastructure expansion for high-speed Internet services, but House Democratic appropriators argued that the chamber shortchanged the broadband programs by eliminating funding for loans. The House approved the funding as part of a broader bill, H.R. 2673, to fund the Agriculture Department in fiscal 2004. "The bill eliminates all funding for this [broadband] program, which provides loans and grants to small rural communities to help them get high-quality data lines," said the minority views in the House Appropriations Committee report on the measure. "This is particularly shortsighted, as the foundation of economic development in our society is increasing technology." By comparison, the competing Senate bill, S. 1427, would provide an increase of $2.5 million.

Budget
Congress Wants Update On Backup Computer Facility
     Congress is skeptical about spending more money on a backup computer facility for the legislative branch, according to appropriations legislation now working its way through Congress. The House-passed version of the bill to fund the legislative branch in fiscal 2004 would deny the $61 million requested for the "alternate computer facility," which is designed to protect congressional records in the event of a terrorist attack or other destruction. The House Appropriations Committee's report on the bill, H.R. 2657, defended that decision by noting that the legislative branch currently uses only a fraction of the space in two buildings reserved for the backup system. The Senate, meanwhile, voted to provide more money for the facility by transferring funds rather than appropriating new money. In other budget news, spending for supercomputing at the Energy Department would increase significantly under the spending legislation, H.R. 2754, for that department.

Budget
House Backs More FBI Funding But With Conditions
     House lawmakers want to increase funding levels for the FBI to help it combat terrorism, cyber crime and conventional crime, but they also want to put the bureau on a shorter leash, according to the budget plan the chamber passed on July 23. The House-passed bill, H.R. 2799, reiterated the importance of FBI funding by increasing its spending level $424 million, for a total of $4.6 billion. But appropriators remained wary about FBI spending. The House Appropriations Committee report on the measure calls for agency funding to be drawn from three separate accounts -- on criminal and security investigations, law enforcement support and administration. "The committee is supportive of efforts to focus resources on national security issues but remains concerned that resource allocation may have a negative impact on other FBI activities, including drug, violent crime, and public-corruption investigations," the report said.

Taxes
Rep. Thomas' Missives On His Tax Bill Seen As Curious
     The series of releases that the House Ways and Means Committee sent last week to try to bolster support for international tax legislation could indicate that the bill's chances for passage are slim, according to an industry source. "Anytime you start the spin machine up like that, it is a sign you're hurting," the source said of the missives from committee Chairman Bill Thomas, R-Calif., who authored the bill. The impetus behind the legislation is the need to fix tax rules declared illegal by the World Trade Organization, but the source said Thomas' releases emphasized other parts of his bill, H.R. 2896. The releases praised the contents of Thomas' proposal, criticized a competing measure backed by a key Democrat and Republican on the panel, and took a dig at Microsoft, which supports the competing proposal.