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Telecom
Industry Experts Offer Two Takes On 'Net Neutrality'
by Drew Clark
SILVER SPRING, Md. -- "Network neutrality" is either a fundamental necessity for free and open digital communications or a distraction from other, more realistic approaches to preserve Internet freedoms, experts said Monday at the Freedom to Connect conference.
"Networks work best when they are networks of general purpose," said Tim Wu, a law professor at Columbia University. "The big question for the future of telecom law is this question of discrimination rules." He said the goal must be to stop network owners from hurting others, and from hurting society, by offering financial deals to carry people's content at the expense of others.
Wu is one of the foremost advocates of such protections that would require network operators to carry the high-speed Internet content of competitors without charging higher prices. He urged Congress to include strict rules in any rewrite of the 1996 Telecommunications Act.
But Martin Geddes, director of the telecom consultancy Telepocalypse, called efforts to obtain network neutrality a mistake, for both substantive and tactical reasons. "There is no reason to fossilize or worship the Internet as it stands," he said.
From a practical view, network operators will find neutrality rules "just too easy to get around," Geddes said, and imposing such rules would require courts to patrol engineering decisions.
"Do you really want the courts to design [the Internet]? Companies will spend more money on lawyers than on network engineers," said Geddes, who formerly was a product strategy manager at the wireless carrier Sprint. "It doesn't stand up."
The Freedom to Connect conference is a joint production of the Internet telephone company Pulver.com and technology consultant David Isenberg.
Among both engineers and telecom lawyers, network neutrality is becoming a hot-button technology policy issue. The House Energy and Commerce Committee is considering a limited set of such rules in draft telecom legislation released last week.
Taking a historical perspective, Wu warned that monopoly power in the communications business is as old as communications networks themselves. He cited the origin of the telegraph and an exclusive agreement that Western Union struck with Associated Press.
"What Western Union did was to offer AP an exclusive deal with preferable rates, provided that they never use any other telegraph at all," he said. "Western Union, from that point on, effectively never allowed another newswire to go over its wire."
Whether the debate goes by "common carriage," "interconnection," "open access" or network neutrality, Wu said, "they are basically the same question: What are the duties of those who offer carriage?" He insisted that network industries must be bound to act in the public interest.
He particularly endorsed a measure by Sen. Ron Wyden, D-Ore., that would bar network owners from offering faster Internet delivery to preferred content. Wyden's measure is stronger than the language in Barton's draft.
Geddes disagreed. Networks are now competitive and no longer need to be governed by public utility regulation, he said. With network neutrality, "all you are doing is embedding yourself further in the monopoly model."
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Trade
U.S. Office Identifies Troublesome Trading Partners
by Danielle Belopotosky
The Office of the U.S. Trade Representative on Friday identified 62 trading partners that it deems as imposing unfair trade barriers against U.S. exports of goods and services and U.S. investment in foreign nations. The report also identified insufficient intellectual property protections.
In its annual report to Congress, USTR discussed the United States' largest export markets, including 58 nations, the European Union, Hong Kong, Taiwan and the South African Customs Union.
"We have an aggressive and proactive agenda to open markets and reduce trade barriers," USTR General Counsel Jim Mendenhall said in a statement. "Our job is to break down those barriers -- whether they are tariff or non-tariff barriers -- because it is essential to our continued economic growth and prosperity."
The 724-page report dedicates 71 pages to the U.S. trade relationship with China. While U.S. goods exported to China increased 20 percent to $41.8 billion last year, the U.S. trade deficit with China grew to $201.6 billion. China is the fourth-largest export market for U.S. goods.
The report highlighted China's implementation of its World Trade Organization commitments. While China has made some progress, "there are still serious problems" in areas such as intellectual property enforcement. USTR said China's "many" shortfalls also include its incomplete transition from a "state-planned economy," its failure to embrace market-access principles and a transparent trade regime.
On semiconductors, USTR said it continues to monitor subsidies to Chinese manufacturers for domestic producers. The United States appealed to the WTO after China implemented discriminatory tax policies against foreign manufacturers.
USTR also said even though China has complied with the Information Technology Agreement to reduce tariffs on computer equipment, semiconductors and other IT products, reports show that the Chinese Ministry of Information Industry and China Telecom continue to adopt discriminatory policies against imported telecommunications equipment.
Investment barriers, government procurement and standards regulation also were cited as obstacles to trade in China.
Intellectual property enforcement in Argentina also remains "inconsistent," according to the report. USTR said insufficient resources and "slow court" procedures hamper enforcement.
The report said Argentina's regulatory regime for e-commerce lacks security and technological provisions to enable speedy delivery of goods. The South American nation's law on digital signatures does not allow for electronic waybills, thus slowing the customs process and the growth of e-commerce.
The report highlighted concern over Canada's "lax" border control that hinder U.S. customs officers from seizing shipment of counterfeit goods. Of growing concern is the increased number of counterfeit electrical products, software and anti-piracy devices entering Canada.
Another concern is the spread of illegal users of U.S. satellite television systems in Canada. A recent survey concluded that number of unauthorized satellite users has reached 1 million, of which 90 percent participate in signal theft without paying U.S. companies. The remainder are said to pay for the service but illegally claim U.S. residence.
And Chile's "most glaring" trade barrier in an "otherwise excellent business climate" is its lack of protections against pirated movies, music, software and pharmaceuticals.
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Intellectual Property
Educators Seek Right To Bypass Digital Encryption
by Danielle Belopotosky
Officials from the Copyright Office on Monday discussed whether educators should be allowed to bypass anti-piracy technologies in order to make clip compilations from digital works for educational purposes.
The Copyright Office must conduct triennial reviews of the Digital Millennium Copyright Act to decide whether the law hinders access to certain "classes of works." Monday's hearing was the third of four to examine the ability to make non-infringing uses of audiovisual works.
The office looked at categories of works that are protected by anti-piracy measures, including audiovisual and digital content in the "public domain," meaning that they are not protected by copyright, and works housed in a library of a university's film or media studies department.
As the use of digital formats continues replacing outdated and unprotected film formats, such as VHS videotapes, some educators argue that encrypted digital formats are preventing them from efficiently and cost-effectively using films in the classroom.
The Library Copyright Alliance and the Music Library Association wrote in their public comments that the DVD Copy Control Association, a consortium that controls the licenses to descramble technological protections, only licenses the system to manufacturers of the hardware for digital videodiscs and related products.
While it is legal for educators to copy content under the "fair use" doctrine of copyright law, they still must crack anti-piracy tools to do so, proponents of an exemption said.
The DeCSS technology to circumvent encryption is available online, said Jonathan Band of the Library Alliance. Therefore, granting an exemption to media teachers will not make the illegal use of DeCSS more prevalent, he said.
Bruce Turnball of DVD CCA said the "concern that we have is less of fair use" and more that the repercussions of an exemption would legitimize the use circumvention technology.
Steven Metalitz, an attorney who represented the joint interests of Hollywood, the recording labels, the publishing industry and the gaming industry, argued that the Copyright Office should not grant an exemption solely based on the fact that circumvention software is available online. "Just because they haven't succeeded in the Internet at large doesn't mean it should be held against them," he said of such technologies.
Fritz Attaway of the Motion Picture Association of America said "once you start granting exemptions for one purpose ... the line of the law becomes fuzzy." He said there is no need for the exemption.
Attaway's assistant demonstrated how a teacher could use a digital camcorder to record a film off of a television screen for classroom use. In addition to that low-tech alternative, Pioneer manufactures a system to let teachers bookmark segments of films to show.
Sandra Aistars, the intellectual property counsel at Time Warner, said her company is developing the next generation of digital copyright protections, and they will address ways of managing copies, including the transfer of content to new devices. She said the technology could help address educators' concerns about making managed clips.
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Security
Ex-Watchdog Questions Hong Kong Ports Deal
by Chris Strohm
The Homeland Security Department's former internal watchdog on Monday said Congress should kill a deal that would let a Hong Kong-based company scan U.S. bound cargo going through the Bahamas.
Clark Kent Ervin, who was the first Homeland Security inspector general, said a contract with Hutchison Whampoa to scan the containers for radiation could compromise U.S. security.
The National Nuclear Security Administration is finalizing a no-bid contract to the company. The agency said it has to give the contract to Hutchison because it is the only port terminal operator in the Bahamas. Under the deal, the company's employees will operate sophisticated U.S. radiation-detection equipment without the presence of U.S. customs agents.
Ervin, who now heads the Aspen Institute's homeland security program, said Hutchison has close ties to China, which he described as "a potentially hostile government."
He said the deal has not received enough public attention compared to the response that surrounded a bid by Dubai Ports World to oversee terminal operations at several major U.S. ports. That deal was approved by the Committee on Foreign Investment in the United States, or CFIUS, but killed under mounting opposition from lawmakers.
Ervin said Congress should do a comprehensive review of which U.S. agencies can approve questionable transactions and move the CFIUS process under Homeland Security.
He participated on a panel hosted by Sen. Max Baucus, D-Mont., to debate maritime security issues in the aftermath of the Dubai deal. That agreement, panelists said, exposed the tensions between international commerce and homeland security.
Mic Dinsmore, CEO of the Port of Seattle, recently returned from a trip to Asia and said the rejection of Dubai Ports World "is being shaped in a way that is going to be profoundly negative" for the United States. "There is tremendous angst now, offshore, about what kind of business or lack thereof does the United States of America want."
Panelists agreed that more funding is needed for maritime security but differed over how far the U.S. government should go in regulating or restricting trade.
Gary Gilbert, senior vice president for Hutchison, defended the contract. He said Hutchison reports any security concerns to appropriate authorities and moved 52 million containers around the world last year without a major incident.
Joseph Bouchard, executive director of the Center for Homeland Security and Defense, said the fundamental question facing the U.S. government is whether to treat private companies as part of the solution in maritime security or as part of the problem. He said industry should be treated as a valuable partner.
Gilbert said shippers are willing to do more to increase security, such as giving the customs and border protection division more information about cargo manifests, and paying $10 to $20 more per container. But he added that the federal government needs to mandate standards so shippers and port operators do not compete against each other.
Baucus said he got the impression that better maritime security depends on a partnership between industry and government in funding and in screening and inspecting cargo.
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Labor
Sen. Specter Hears Ideas On Immigration Appeals
by Emily Heil, CongressDaily
Federal judges on Monday had mixed reactions to a proposal by Senate Judiciary Committee Chairman Arlen Specter to consolidate reviews of immigration cases in the Federal Circuit Court of Appeals. The circuit judges currently hear appeals involving patents, personnel and veterans' benefits.
Several judges told the Judiciary Committee that the plan would clog the federal court, politicize the selection of its judges, and prove difficult and expensive. But others said it would make immigration decisions more consistent from region to region, allow cases to be heard by judges who are experts in immigration law, and ease circuit courts burdened by immigration cases.
The 2nd and 9th federal circuits, which hear the most immigration appeals, would benefit the most, they suggested.
The proposal was part of the massive immigration bill the committee approved last week, but Specter, R-Pa., stripped the language after hearing criticism.
Judge Carlos Bea of the 9th U.S. Circuit Court of Appeals told the committee that consolidating immigration cases would make rulings more consistent. "The overwhelming need is a need for a national policy," he said. "One does not emigrate to Ohio; one emigrates to the United States."
But others, including a judge from the federal circuit, worried that the proposal offers inadequate resources to deal with the potentially huge influx of cases. Judge Paul Michel told the committee that the plan would create a "tenfold" increase in workload, and would necessitate additional staff and another courthouse.
Judge Jon Newman of the 2nd U.S. Circuit Court of Appeals offered an alternative proposal to create a panel of appeals-court judges from sitting judges to hear immigration reviews. That would provide centralization without disrupting the tradition of having "generalist" judges hear cases involving personal liberty, Newman said.
Specter appeared interested in the alternative and complaints about his proposal, but he did not indicate how he might change his legislation.
The Senate is set to vote Monday evening on as many as two amendments to the bill, including a relatively noncontroversial amendment to provide $50 million in grants to law enforcement agencies located within 100 miles of the U.S. border.
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Privacy
IRS To Consider Rules On Sharing Taxpayer Data
by Winter Casey
The Internal Revenue Service is currently reviewing a proposed rule to strengthen taxpayers' control over information that is held by tax preparers or tax software companies. A public hearing on the regulations is slated for Tuesday.
The regulations, issued jointly in December by the Treasury Department and the IRS, would require electronic warnings and consent notices for taxpayers so they could make informed decisions over the disclosure or use of their information by tax preparers.
The agency accepted public comments on the proposed rule until March 8. The regulations call for new privacy guidelines that would apply to those who are given access to information for preparing customer tax returns.
Federal law currently outlaws tax preparers from disclosing customer information except under specific circumstances. However, the section of the tax code that sets those rules has been left largely unchanged since 1974. It allows tax preparers to disclose customer information to third parties if given customer consent.
The rules fail to take into consideration the vast changes in the tax-return landscape over the past 32 years -- such as the commercial acceptance of the Internet.
Under the proposed rules, past requirements would be significantly tightened, strong warnings would have to be given, and limitations on what constitutes consent would be established. The rules also would weigh whether tax preparers outsource their work overseas.
Separately, last week the IRS established an electronic mailbox for taxpayers to send information regarding suspicious e-mails they receive that claim to originate from the IRS.
The agency also released statistics showing a substantial increase in the number of taxpayers who file their tax returns electronically. At this point in the filing season, 68 percent of all returns have been filed electronically, marking a 3 percent increase from last year.
"The increase in e-filing is really being driven by people using their home computers," IRS Commissioner Mark Everson said in a statement. "E-file is the safe, accurate way for taxpayers to quickly finish their taxes and get a refund."
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Today's Feature:
Issue of the Week
Last week's introduction of House draft language to establish a national video-franchising system was not well-received in municipal circles.
Every Monday, read the Issue of the Week by Technology Daily Staff
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E-briefs
Lobbying: A number of free-market groups on Monday penned a letter to the chairman of the House Energy and Commerce Committee to highlight their concerns with draft language on video franchising. The coalition of groups -- which includes the American Conservative Union, Competitive Enterprise Institute, Council for Citizens Against Government Waste, Discovery Institute, FreedomWorks and National Taxpayers Union -- told Chairman Joe Barton, R-Texas, that they are displeased with language on "network neutrality." The term refers to efforts to prevent Internet providers from charging their competitors more to deliver high-speed content on their networks. "The language is nebulous and potentially detrimental, and the draft's arcane choice of words could result in uncertainty, overregulation, litigation and privacy violations," the groups wrote. The coalition said it would like the legislation to "clarify the scope and breadth of power granted to the FCC."
Labor: U.S. citizenship and immigration services officials on Monday said that a release indicating their office has received enough petitions to meet a congressionally mandated cap on visas for highly skilled foreign workers is fake. According to an agency statement, the office has not received enough petitions to close either a congressionally mandated cap for H-1B visas in fiscal 2007 or a 20,000-worker exemption from the limit. The office has advised employers to continue to file for petitions. The statement reiterated that all official agency news releases are posted online. The agency "is committed to ensuring that employers have accurate and timely H-1B information and will provide an update about the latest cap numbers later this week," the statement said.
Broadband: The number of high-speed Internet connections in the United States increased by about 5 million lines in the first half of 2005, according to an FCC report released Monday. The report found that the total of broadband lines increased from 37.9 million to 42.9 million in the first sixth months of last year. The data was compiled as part of the FCC's local phone telephone competition and broadband data-gathering program. The FCC requires all broadband providers with their own facilities to report basic information about their customer bases and the services they provide. In addition to the growth of high-speed lines, the report cited a 23 percent increase in the number of advanced-services lines, which provide connections at speeds greater than 200 kilobits per second. The report also includes a geographic analysis of broadband coverage in the United States.
Cyber Security: The Anti-Spyware Coalition on Monday released two online resources to help consumers protect themselves from malicious software that is secretly installed on computers. The two documents, which are available on the group's Web site, provide consumers with instructions on how to guard their computers from unwanted "spyware" and "adware" programs, and how to remove such applications after they have installed themselves. "Although technology companies are developing increasingly sophisticated tools to combat unwanted software, individual users and network operators need to use those tools and use them properly if we are to beat back the tide of spyware and adware deluging computers worldwide," said Ari Schwartz, the deputy director of the
Center for Democracy and Technology.
Trade: House Ways and Means Chairman Bill Thomas, R-Calif., said Monday that the Bush administration should declare the "Doha round" of global trade talks a failure and concentrate instead on completing as many bilateral trade deals as possible by the end of the year. Speaking to the American Enterprise Institute, Thomas said the United States and European Union have "irreconcilable differences" that will prevent any successful conclusion of the talks that began in Doha, Qatar. In addition to pursuing the bilateral agreements, Thomas said the United States can make progress in the absence of a new multilateral trade round by making U.S. duty-free preferences for least-developed countries conditional on countries' willingness to abide by trade rules. He said those countries at a minimum should agree to adhere to science-based standards for sanitary and phytosanitary measures, and to protect intellectual property rights, or forfeit their duty-free benefits.
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