Privacy Sen. Collins Will Move To Delay Federal ID Rule by Michael Martinez      State lawmakers in Maine who last month rejected pending federal standards for driver's licenses and identification cards may have found an ally in their congressional delegation.      Sen. Susan Collins on Friday said she would introduce legislation next week to delay the deadline for state compliance with the so-called REAL ID Act by two years. The Republican said her bill also would reinstate a disbanded negotiated-rulemaking process to develop federal driver's license and ID standards, and it would broaden the authority of the Homeland Security Department to waive certain provisions for state compliance with REAL ID.      Collins, who led the Senate Homeland Security and Governmental Affairs Committee when REAL ID was passed in 2005, is the first lawmaker on Capitol Hill to act on it in the 110th Congress. Her announcement came amid a growing state rebellion against REAL ID.      Collins' home state last month approved a non-binding resolution against the law. Anti-REAL ID legislation has advanced in Montana, New Mexico, Vermont and Wyoming. Bills are pending in Arizona, Hawaii, Maryland, Missouri, Oklahoma, Utah and Washington. On Friday, the Georgia Senate voted 51-1 for legislation to delay its compliance with REAL ID.      Civil libertarians said they are encouraged that Collins has engaged herself on REAL ID, but they doubt whether her bill would go far enough to satisfy their severe constitutional concerns about the law, which they claim would create a national ID system.      Tim Sparapani, legislative counsel at the American Civil Liberties Union, said it is not enough to merely delay REAL ID, which some have estimated will cost states as much as $11 billion. He said Congress needs to kill the law.      Sens. Daniel Akaka, D-Hawaii, and John Sununu, R-N.H., introduced a bill late in the 109th Congress that would have repealed REAL ID. They are not expected to reintroduce their legislation until standards for state compliance by the May 2008 deadline are released by the Homeland Security Department.      Collins plans to offer her proposal as an amendment to Senate legislation that would implement the remaining recommendations of a 2004 commission that investigated the 2001 terrorist attacks.      Her bill would reinstate a rulemaking process on federal ID standards. The measure would not direct any funding to states to assist with REAL ID compliance, but Collins said she is sympathetic to how the law is going to squeeze state budgets.      She also criticized the Homeland Security Department for taking so long to issue guidance to the states. She said she would seek answers from Secretary Michael Chertoff at a hearing next week on the department's budget submission for fiscal 2008.      Sparapani said the federal government's failures on REAL ID run deeper than Homeland Security's inability to deliver guidance to the states on time. He said the White House's latest budget, which directs no funds to states for REAL ID compliance over the next two fiscal years, suggests that the administration wants to distance itself from the issue.      "The signal from the White House is 'We're walking away from REAL ID,'" he said.

Privacy Rep. Markey Urges FCC Probe Into Use Of Phone Data by David Hatch      The new Democratic chairman of an influential technology panel wants the FCC to investigate allegations that telecommunications carriers let the National Security Agency review customer telephone records without legal authority.      "Telecommunications law requires that the privacy of all consumers be protected," Edward Markey of Massachusetts, the head of the House Energy and Commerce Telecommunications and the Internet Subcommittee, said Friday. He spoke to reporters after an event where he received an award from the Alliance for Public Technology.      Markey said the FCC has "a responsibility to use ... the laws that they are bound to uphold to engage in a public policy debate" with the NSA. "The NSA does not have a legal right to assert unfettered access to all telephone records in America without obtaining a legal warrant."      Markey does not accept the view of Republican FCC Chairman Kevin Martin that his agency cannot investigate. Martin offered that view in a Wednesday response to questions posed in January by Markey and full Energy and Commerce Committee Chairman John Dingell, D-Mich.      "I don't think it's right to say that the FCC won't undertake an effort to protect the privacy of those phone calls because they know they'll be told 'no' by the National Security Agency," Markey said. In the past, major carriers have either denied the allegations or declined to comment.      On Thursday, a federal judge blocked Maine's utility regulators from holding a contempt hearing into Verizon Communications' response to a probe about its potential participation in such surveillance. U.S. District Judge John Woodcock said the federal court "is the proper forum to resolve the opposing positions of the federal and state governments" on the issue.      Markey received the alliance award for aiding the disabled with closed-captioning and related services. In his acceptance speech, Markey said that as chairman of the subcommittee, one of his goals will be to ensure that the disabled have access to innovations like Internet phone service.      Markey will conduct a Feb. 15 FCC oversight hearing, the second time this month that all five agency regulators will appear before Congress. The first was Feb. 1 before the Senate Commerce Committee.      Martin asked to meet with House members before next week's hearing. On Tuesday, he will visit Republicans on the telecom panel. The FCC chief also requested meetings with Markey and other key Democrats, but at deadline it was unclear whether any had been scheduled.      "Kevin Martin was invited to come by and tell us what's up at the FCC these days," House Commerce spokeswoman Lisa Miller said via e-mail. "Good information and good listening can cause good lawmaking. We're going to loosen his tongue with free coffee from the Rayburn Deli and take whatever we can get in the way of communications policy insights."      "The chairman meets with members of Congress all the time, both houses and both parties, and it's not unusual for him to meet them before congressional hearings, but he meets with them at other times as well," an FCC official said.

Telecom Web Interests Challenge FCC's Universal Service Order by Andrew Noyes      The country's largest Internet telephone provider and a high-tech trade group on Friday challenged a recent FCC order that changes the framework for contributions to the multibillion-dollar universal service fund. They appeared before the federal D.C. Circuit Court of Appeals.      Vonage and the Computer and Communications Industry Association, which represents rival BroadVoice, disagree with the terms of the agency's June order requiring Internet-based phone services that connect to the public-switched telephone network to contribute to USF. The program subsidizes telecommunications connections in rural and poorer areas.      The commission said Web phone providers would have to calculate what they owe based on a "safe harbor" contribution rate of 64.9 percent of total service revenue. The agency also raised cellular companies' existing safe harbor to 37.1 percent from 28.5 percent "to better reflect growing demand for wireless services."      Vonage attorney Christopher Wright argued before Judges Harry Edwards, Merrick Garland and David Tatel that his company should have to calculate its contribution based on the same figure used by wireless services, which market themselves as a substitute for both local and long-distance calling.      The commission adopted the higher figure for companies that offer voice-over-Internet protocol by comparing them to long-distance providers, or inter-exchange carriers, rather than local exchange carriers. Wright said that approach is "not reasonable."      Wright noted that when pressuring Internet phone companies to comply with 911-emergency-dialing requirements and provisions of the Communications Assistance for Law Enforcement Act, the commission said firms like Vonage are replacements for local phone service. The same rules should apply in this instance, he said.      In its order, the FCC also said VoIP providers could calculate interstate revenues based on traffic studies, which the commission itself acknowledged is costly. The catch is that VoIP providers submitting studies must await agency approval before using them as a measurement tool, Wright noted.      FCC attorney James Carr defended his agency's decision-making, saying that VoIP providers have not previously contributed to the fund and "we're headed into uncharted territory here."      Judge Garland said he had trouble understanding the commission's reasoning for gauging how VoIP providers would contribute to USF. "The only rationale given in the rule is 'we need more money; let's take it from them,'" he said.      If the FCC is worried that the fund is being drained under the current regime, the agency needs to ask Congress to help find the right solution instead of burdening VoIP firms, CCIA attorney Glenn Manishin said.      Manishin called the commission's order "the most sweeping unilateral expansion of FCC authority" since the 1996 Telecommunications Act. The change "contradicts the plain meaning of the act, yielding absurd results" and it should be reversed, he said.      Stifel Nicolaus analysts said the court likely will find fault with at least some of the FCC's decision-making. If the commission's order does not pass muster, VoIP providers could get relief from the agency on remand, they said in an e-mail. An FCC defeat also could spur USF reform efforts at the agency or on Capitol Hill, they said.

Budget Lawmakers Keep Eye On Communications Grant Program by Chris Strohm      House lawmakers on Friday pressed Homeland Security Secretary Michael Chertoff to establish guidelines for a new $1 billion grant program to help emergency responders buy communications equipment than can work across jurisdictions.      The Homeland Security and Commerce departments are supposed to co-administer the program, which is to be funded with proceeds from selling radio spectrum this year. But House Homeland Security Committee Chairman Bennie Thompson, D-Miss., and ranking Republican Peter King of New York said the departments have been unable to agree on management of the program.      "I can't impress upon you my and the ranking member's concern about the whole issue," Thompson told Chertoff during a hearing.      By law, $1 billion is supposed to be available by this September. The funding would help state and local agencies address in communications interoperability, a problem that has not been solved more than five years since the 2001 terrorist attacks. Lawmakers have no idea, however, how the program will work or how state and local agencies should apply for funds.      Chertoff said he expects Homeland Security and Commerce to reach an agreement within 10 days, and if they do not, he will personally call Commerce Secretary Carlos Gutierrez.      Regardless, King and Thompson said they will send Chertoff a letter on Friday asking him to explain the delay in reaching an agreement.      King and Thompson also blasted the fiscal 2008 Homeland Security budget request for cutting about $1.2 billion from existing grant programs to state and local public-safety agencies.      Chertoff countered that the new $1 billion grant program would offset those cuts.      "The bottom line is this: We're going to put $3.2 billion in the hands of first responders and communities in fiscal year '08, which is roughly the same as it was this past year," Chertoff told reporters after the hearing. "I don't tend to get hung up on individual programs and categories. ... I look at what is the ultimate money that's going out to communities to do homeland security."      King and Thompson are not buying Chertoff's argument. King helped draft the legislation that created the $1 billion fund and said it was never intended to offset cuts to other grant programs. Their letter to Chertoff will ask him to explain his position, aides said.      King indicated during the hearing that the department's budget might have to be increased overall. "When you're at war, you decide how much money you need and you work your way back from that," he said. "Certainly, I intend to be discussing this with the chairman as we go forward and also members on my side."      Chertoff said the budget is sufficient, adding that about $5 billion in grants to state and local agencies still has not been spent. "We are making huge investments," he said. "There's a lot of money in the pipeline. Like everybody else in the world, we all ultimately have to live within a budget and within our resources, so we all make tough decisions."

Labor New Centers To Offer Technical Skills To Youths by Aliya Sternstein      Disadvantaged youths in Wyoming and New Hampshire soon will have the opportunity to gain entry into high-paying, high-tech industries via two federally funded job-training residences set to open in their neighborhoods.      This week, the Labor Department announced that Manchester, N.H., and Riverton, Wyo., will become home to the first-ever Job Corps centers in their states. They will each cost roughly $30 million.      For more than 40 years, the free Job Corps program has taught practical trade skills to 16- to 24-year-olds, most of them high school dropouts. Job Corps graduates get high school or general equivalency diplomas, the training demanded by local employers and career counseling for up to 12 months after they leave.      Sandy Barton, executive director of Fremont County Board of Cooperative Educational Services, spearheaded the campaign to bring Job Corps to Riverton, a city in Fremont County. "We've had over 11,600 jobs created in Wyoming this year," she said, noting that the county has the highest unemployment rate in the state. The gap between supply and demand is due to the lack of technical training, she said.      The 9,000 square-mile community of Fremont is home to a huge energy sector, which needs bodies to monitor computers that operate oil and gas machinery, Barton said. A new supercomputer lab at the National Center for Atmospheric Research in Cheyenne also will offer job opportunities.      Barton, a former high-school business and technology teacher, began the effort to bring Job Corps to Fremont last January by visiting existing sites and giving presentations to government officials. Fremont's businesses endorsed the program, ensuring that trainees would be hired within the community should Fremont be selected.      Coy Knobel, the spokesman to Wyoming U.S. Sen. Mike Enzi, who is the top Republican of the Health, Education, Labor and Pensions Committee, said the senator is confident in Fremont's success because "[t]he applicants gathered the support of their community and the state before applying to get this center."      Another reason is its proximity to the Wind River Indian Reservation. "There is a high drop-out rate on the reservation, but the kids are very reluctant to leave home, to leave their support system to find the education and training support they need," Knobel said.      The new Job Corps facilities -- slated to open in 2011 -- will include dorms for young parents. The center will house a child development center, where the parents' kids will be watched when they are in classes. Some 500 students a year are expected to enroll at both the Wyoming and New Hampshire locations.      Manchester's Job Corps center will concentrate on security-related occupations in technology, health care and inspection-protection services, according to New Hampshire Gov. John Lynch.      U.S. Sen. Judd Gregg of New Hampshire, a member of the Labor, Health and Human Services, and Education Appropriations Subcommittee, stated, "This proposal, to focus New Hampshire's center on homeland security-related jobs also demonstrates New Hampshire's innovative spirit of entrepreneurship."

Intellectual Property Gonzales: U.S., Brazil Should Fight Piracy Together by Winter Casey      Protecting intellectual property requires international cooperation and criminal enforcement, Attorney General Alberto Gonzales told members of the Brazilian business community Friday.      "Global changes, both economic and technological, have created unprecedented challenges" to global IP enforcement, Gonzales said according to a transcript, so the two nations must "continue to work together to protect intellectual property. IP helps drive our economies, and it has too great an effect on the health and safety of our citizens to be ignored.      "The digital age has created a borderless world for large criminal conspiracies -- so our law enforcement efforts must be global and borderless as well."      Gonzales traveled to Rio de Janeiro, Brazil, for the first time this week to speak with government officials and civic leaders about various issues. He touted the global benefits of intellectual property and noted that modern technology gives owners the opportunity to distribute their works to an international audience.      Gonzales added, however, that criminal activity poses a grave threat to IP rights. "Resourceful criminals can use the Internet to violate both trademark and copyright laws by creating and selling products, such as software, that appear to be legitimate, but are not," he noted.      Gonzales said criminal organizations have become more sophisticated and crimes can have dire consequences, such as when dangerous counterfeit drugs are sold on the Internet. "We must strengthen our global enforcement efforts, ensure strong IP laws, increase resources devoted to IP law enforcement, and work to increase the number of joint U.S.-Brazil operations," he said.      The Brazilian government has made solid progress in combating IP crime through educational initiatives, the seizure of infringing copyrighted materials at the borders, and improved law enforcement cooperation at the federal and state levels, Gonzales said.      He noted that in the United States, the government has increased the number of prosecutors specially trained to handle IP crimes and created a high-level task force on the issue.      "Last year alone," Gonzales said, "Department of Justice prosecutors provided training and technical assistance on IP investigations and prosecutions to over 3,300 foreign prosecutors, investigators and judges in 107 countries."      "Developing transnational cases requires a network of law enforcement contacts on the ground," he said. "And we have seen a tremendous benefit from placing a highly trained IP prosecutor in a partner country to work with and assist foreign law enforcement counterparts in the complex and unique aspects related to protecting intellectual property."      Gonzales noted that the U.S. government is currently considering placing a coordinator in the Brazilian region to focus on IP enforcement throughout South America.      In the past two years, Justice has successfully led the two largest global enforcement actions against online software piracy, he said.

Taxes EBay Battles Treasury Over Releasing Web Sales Data by By Martin Vaughan, CongressDaily      The eBay online auction service is outraged over the Treasury Department's request for more information on property sold over the Internet.      Unveiled this week as part of fiscal 2008 budget proposal, the requirement for brokers of tangible personal property is at least in part engineered to help the Internal Revenue Service collect more taxes from Internet sales, according to experts. That could include the profits of hundreds of thousands of small-time entrepreneurs on eBay.      Similar to current requirements for stockbrokers, the new proposal would require property brokers to file returns detailing taxpayer identification numbers and gross sales proceeds. It would only apply to sellers for whom the broker has handled 100 or more transactions in a year for $5,000 or more in gross sales.      EBay believes the broker requirement would not apply to it because it is an online marketplace where buyers and sellers do their own negotiating. "Based on the current definition of a broker, we have no doubt that eBay is not affected at all," company spokesman Hani Durzy said.      But that has not stopped the Web-based firm from contacting its allies on Capitol Hill and rallying high-tech companies to its aid in fighting the provision. "They're looking at it and have convinced other tech companies that it could be the foot in the door [for Treasury] to come after a lot of people that do business on the Internet," said Ralph Hellmann, senior vice president at the Information Technology Industry Council.      Rep. Rick Boucher, a Virginia Democrat and co-chairman of the Congressional Internet Caucus, said eBay's lobbyists contacted him about the broker proposal. Boucher said he opposes new reporting requirements for eBay and does not think the firm meets the definition of a broker.      "The paperwork burden attached to this would be prohibitive," he said. "I would think there would be a tremendous public backlash if eBay had to increase its charges for these services to offset the cost of providing a 1099 form."      A spokeswoman for the Treasury Department did not respond directly to the question of whether administration officials believe eBay would be covered. She said the proposal "is not targeted to online commerce, but it would apply regardless of the medium in which the transaction occurs."      Senate tax aides and one private sector executive said they have difficulty understanding what income the proposal is targeting, if not online auction sales. "I think everybody else is pretty much covered under existing law," said Chandra Bhansali, president of AccountantsWorld.      Bhansali was part of a panel of IRS advisers that last year recommended collecting more information from online auction sites such as eBay as a way to collect more taxes on online sales. But Bhansali said a second proposal in the president's budget -- a requirement for banks to report information on the credit-card payments they process -- also would accomplish that goal.      That plan would require reporting to the IRS by PayPal, the online payment service owned by eBay and used widely by its members.

On The Hill New Bills Target Online Porn, Privacy Protection by Theresa Poulson      Lawmakers introduced several bills this week aimed at combating the multibillion-dollar child pornography industry.      Among them were two measures, H.R. 836 and H.R. 837, that would require Internet service providers to track users' online activities and would require owners of sexually explicit Web sites to post warning labels on their pages or face imprisonment.      Meanwhile, Senate and House companion bills, S. 519 and H.R. 876, would extend and modernize reporting requirements for child porn. (See separate story)      The Senate legislation would enhance the current system for service providers to report online child porn, making the failure to do so a federal crime, and Internet providers would have to store images and facts relating to suspicious incidents for at least 180 days after they are reported. "The fight to protect our children from exploitation has moved from the playground to the Internet, and we must update our laws to reflect this reality," said bill co-sponsor John McCain, R-Ariz.      Privacy issues also were on Congress' agenda. Rep. Edward Markey, D-Mass., introduced a bill, H.R. 948, to strengthen protections against selling or purchasing Social Security numbers. And Sen. Patrick Leahy, D-Vt., introduced a measure, S. 495, to prevent and mitigate identity theft, provide notice of security breaches, and increase criminal penalties against security breaches and misuse of personally identifiable information.      Leahy remarked that just last week in Vermont a breach jeopardized the financial data of at least 69,000 residents whose personal financial information was stored on a server.      Two new House bills, H.R. 852 and H.R. 936, target a practice called "pretexting," which involves accessing telephone records of others under false pretenses.      And Rep. Rush Holt, D-N.J., introduced a bill, H.R. 811, to require paper trails for electronic ballots. "Until we require that voting systems produce a voter-verified paper ballot, the results of our elections will always be uncertain," Holt said in a statement.      The measure would require routine, random audits of paper ballots by hand counts in a percentage of voting precincts in each congressional district. (See separate story)      Other tech-related measures introduced this week were:      -- H.R. 863, which aims to improve communications interoperability for emergency response;      -- H.R. 894, which would require the disclosure of identifying information in campaign advertisements via Internet and pre-recorded telephone calls;      -- H.R. 873, which would prohibit fees by creditors for payments on credit-card accounts by electronic fund transfers;      -- And H.R. 828, which seeks to preserve mathematics- and science-based industries in the United States.

Today's Feature: Executive Summary The Bush administration this week unveiled a fiscal 2008 budget request that is chock-full of technology-related initiatives. Every Friday, read the Executive Summary by K. Daniel Glover.

E-briefs Privacy:   The highest court in Maryland has agreed to review a case in which prosecutors asked an employer to submit the personal and computer records of an attorney representing the Green Party. The Maryland Court of Appeals on Wednesday granted review of a challenge to a subpoena demanding access to the computer and personal files of Mark Green, who represented the party in a 2003 case against the state. The American Civil Liberties Union and Green Party asked a court to quash the subpoena last month. "Following recent revelations of aggressive new tactics by the U.S. Justice Department to seize the computers of lawyers with cases against the government, the ACLU has become deeply concerned about unraveling privacy protections in the law," ACLU of Maryland Legal Director Deborah Jeon said in a statement. "That's why we are heartened that the serious threats posed by the state's subpoena will be reviewed." Civil Liberties:   Two House lawmakers on Thursday asked Attorney General Alberto Gonzales for more answers than have previously been given about the National Security Agency's domestic wiretapping program. Gonzales sent a detailed letter earlier this month to Senate Judiciary Committee leaders, hoping to allay lingering concerns about the initiative approved after the 2001 terrorist attacks. Reps. Adam Schiff, D-Calif., and Jeff Flake, R-Ariz., who sponsored a bill to modernize government eavesdropping laws last session, said in a letter to Gonzales that "a number of questions remain with regard to the administration's new approach" of first seeking warrants from the Foreign Intelligence Surveillance Court. Among other things, the lawmakers want to know the nature and number of courts orders that have been issued. They also asked Gonzales whether any other programs outside of the 1978 intelligence reform law or U.S. criminal code involve spying on Americans without warrants.

President -- John Fox Sullivan, 202-739-8468 Editor in Chief -- Louis Peck, 202-739-8481 Editor -- K. Daniel Glover (bio) Assistant Editor -- Theresa Poulson Senior Writers -- David Hatch (bio), Heather Greenfield (bio), Andrew Noyes (bio) and Aliya Sternstein (bio) Special Correspondent -- Chris Strohm (bio) Staff Writer -- Michael Martinez Senior Business Affairs Manager -- Chris Hamby Business Affairs Associate -- Anne TeBeest Advertising Sales -- Alex Treadway National Journal's Technology Daily is published every weekday, except holidays, by National Journal Group Inc., 600 New Hampshire Avenue, NW, Washington, DC 20037.   ©2006 by National Journal Group Inc. All rights reserved. Reproduction or transmission in any form of this product by any means—from a retrieval service or any other electronic form or from a photocopy—in whole or part without permission is strictly prohibited. National Journal Group makes no representations or warranties with respect to and is not responsible for the content of World Wide Web sites linked to by this publication but not controlled by National Journal Group. Please read the details of our Privacy Policy. Editorial: 202-266-7197 Fax: 202-266-7094 Subscription Inquiries: 202-266-7264 Customer Service: 202-266-7230 or 1-800-207-8001