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Television
FCC Chief Floats Proposed Rules For TV Signals
by David Hatch
FCC Chairman Kevin Martin is floating a proposal to govern carriage of digital broadcast signals on cable that could be voted on at the agency's April 25 meeting, government and industry sources said. The plan would tweak the so-called "must carry" rules to make digital TV stations available via cable more widely accessible.
Under existing requirements, cable systems must carry each station's primary analog transmission. After the Feb. 17, 2009, switch to digital broadcasting, cable operators must carry each station's main digital feed.
But Martin would modify the rules to aid the 50 percent of customers with analog cable service. Operators could either outfit those subscribers with digital set-top boxes or "down-convert" digital broadcast signals to analog for viewing on older TVs. Both options would enable those subscribers to watch broadcast stations via cable after the switchover.
The National Cable and Telecommunications Association strongly opposes such mandates, arguing that they would force cable systems to upgrade customers to pricey digital service or use precious bandwidth by requiring broadcast carriage in dual formats. The industry says that would be a burden in markets with numerous TV outlets, such as Los Angeles, and for small, rural cable systems with limited capacity.
"We have repeatedly assured Congress and the federal government that we'll continue to deliver broadcast signals to cable's analog customers after the February 2009 transition," NCTA spokesman Brian Dietz said in a statement. "The right approach to ensuring a seamless digital transition is a collaborative process that doesn't reach premature conclusions that will jeopardize our efforts to assist cable's 65 million customers."
"NAB would view this as a very positive development, and we look forwarding to hearing more about the proposal," National Association of Broadcasters spokesman Dennis Wharton said in an e-mail. The association has long sought to ensure carriage of over-the-air signals on pay TV.
In June 2006, shortly after Republican FCC member Robert McDowell joined the agency, Martin was forced to pull a digital multicasting proposal after McDowell expressed opposition.
The chairman wanted to require cable systems to carry all ancillary broadcast signals following the DTV transition. McDowell argued that because existing statutes barred the move, Congress needed to approve it. McDowell, who is off through next week because his wife had a baby on Thursday, has not formulated a position on the latest must-carry plan, a source said.
Meanwhile, a new multicasting proposal being floated by Martin would enable digital broadcasters to lease extra channels to eligible minorities, women and small businesses. The stations, in turn, would be guaranteed cable carriage.
The cable industry opposes the arrangement, arguing that broadcasters are trying to solve their diversity shortcomings on the backs of another industry.
"This is an intriguing proposal, and we salute Chairman Martin for developing creative ideas involving use of the digital spectrum," NAB's Wharton countered.
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Taxes
Candidate Fights N.C. Tax Breaks For Google Center
by Michael Martinez
A Republican gubernatorial candidate in North Carolina is leading a challenge to incentives offered to Google to build a data center in the Tar Heel State.
Robert Orr, a former North Carolina Supreme Court justice and the executive director of the North Carolina Institute for Constitutional Law, disclosed plans this week to challenge on constitutional grounds state tax breaks offered to Google that could save the company as much as $90 million. The tax incentives were authorized by the state General Assembly last year.
"It will be probably be several weeks before anything is filed," Orr said in a telephone interview.
The institute's board has approved the language of the suit, which will be filed at the state level. The watchdog group is now actively searching for individual taxpayers to be plaintiffs in the case.
Google is planning to build a $600 million data server farm in Lenoir, N.C., that will employ about 200 people. The company announced plans earlier this month to build a similar facility near Charleston, S.C. Spokesman Barry Schnitt said Google also is evaluating the possibility of building another data center near Columbia, S.C.
The North Carolina General Assembly last year passed legislation that exempts technology firms like Google from state taxes on electricity and certain types of equipment. Local government officials in Caldwell County also decided to waive property taxes to lure Google to Lenoir.
Some critics of the incentives have complained about the secrecy of the deal-making process. State Sen. Jim Jacumin told The News & Observer in Raleigh that some lawmakers were pressured by Google to keep quiet during negotiations.
The legal challenge Orr is orchestrating will focus on the state portions of the incentives that were offered to Google. He said the provision approved by the legislature last year could save Google as much as $90 million over 30 years.
Orr's organization sued in 2005 to challenge similar tax incentives North Carolina offered to the Dell computer company to build a plant near Winston-Salem. The legislature authorized nearly $250 million in incentives that paved the way for the deal in 2004.
The suit was dismissed by a state superior court judge last year, but the institute has appealed the decision to the state Supreme Court. Oral arguments are scheduled to begin later this month.
The outcome of the Dell case may affect the Google suit, but Orr said it would not keep the institute from filing a complaint. "We'll move forward with litigation in the Google case regardless of what happens," he said.
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Cyber Security
New Grades Prompt Closer Look At Cyber Standards
by Heather Greenfield
Federal agencies received their report cards for compliance with computer-security rules Thursday, but some of those in charge of making the security improvements question whether the rules themselves are making the grade.
The Merlin International Federal Research Consortium has released a report that asked federal chief information security officers to grade the process established under the Federal Information Security Management Act for examining cyber security.
While most CISOs reported that their own FISMA grades have improved, they said they still face compliance challenges, including language ambiguities in the FISMA guidelines. Virginian Tom Davis, now the ranking Republican of the House Oversight and Government Reform Committee, gave agencies an overall grade of C-minus, up from a D-plus the previous year.
Davis acknowledged that it was easier for relatively smaller agencies, like the National Science Foundation, to score an A-plus, compared with larger entities like the Homeland Security Department. Even so, the Merlin International study found that CISOs from larger agencies had more confidence in the accuracy of the annual FISMA report card.
Sixty percent of CISOs from large federal entities said the report card provides real insight into IT security. But 64 percent of CISOs from small agencies said just the opposite -- that FISMA had no impact on improving security.
Some 75 percent of the CISOs said their FISMA grades improved this year. When asked the reason, 20 percent cited streamlining certification and accreditation efforts, and 16 percent cited devoting more resources to certifying computer systems. Another 16 percent said establishing enforceable internal IT security polices helped boost their grades.
Patrick Howard, CISO for the Housing and Urban Development Department, had the biggest grade increases from D-plus to A-plus, and he said the ongoing challenge is "just continuously monitoring the system and security process."
But in grading FISMA itself, 46 percent of CISOs said FISMA language should be more clear, 42 percent want better guidance for the yearly agency security controls/tests, and 13 percent said excluding e-authentication factors would help.
Another criticism is whether the grades really mean anything. CISOs note that there is not much correlation between funding for FISMA compliance and grades. Also the report cards have little impact on overall agency funding, so aside from publicity, they said there is not necessarily an incentive to spend time and money on FISMA compliance.
Davis agreed that FISMA could be better. "Sure it has criticism, mainly from failing agencies." But he also said he wants "to take FISMA to the next level."
John Trauth, executive vice president of federal government systems at Merlin, has some advice on how to do that. "Our report recommends several next steps, including modifications for small versus large agencies and a continued effort to clarify requirements language," Trauth said.
But others said FISMA meets its goal of forcing agencies to inventory computer systems and account for security. "I don't think FISMA needs to be tweaked," HUD Chief Information Officer Lisa Schlosser. "We need to measure different aspects of the security program."
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E-Government
Trust And Logistics Are Key To 'Smart' IDs
by Aliya Sternstein
The ongoing task of issuing all federal contractors common identification cards will involve a great deal of trust and logistics, federal officials said at a credentialing conference on Friday.
In October, agencies were required to start issuing standardized IDs to all employees and contractors who access government buildings and computer systems. It will take several years to enroll everyone, observers say.
"The hard piece for us has been how to make this work," said Mario Morales, director of the ID program office at the Health and Human Services Department. The new credentials are the result of a 2004 homeland security order, known as HSPD-12, that demands each employee obtain a card by going through a background check and fingerprinting.
Federal employees and designated contractors then obtain "smart cards" embedded with tiny computer chips that contain personal indentification data and clearances. To simplify the whole concept, Morales' office just refers to it as the "ID badge."
There will be 225 credentialing stations, some mobile, to capture employees' biometric information, according to Michel Kareis, with the HSPD-12 managed-services office at the General Services Administration. She said the enrollment process takes about 20 minutes per person.
Morales cited the Office of Personnel Management as "probably the most important player" in equipping agencies with the know-how to deploy the operation.
OPM's investigative services division conducts most of the background checks for the government. Mark Pekrul, a senior program analyst in the division, said the population of uncleared federal contractors will be most affected because those people have never undergone background investigations.
Morales stressed the "trust element" of the ID program. Federal employees decide which contract employees have a "bona fide need to be here," and subsequently should get a card. Contractors are not allowed to order cards for their employees.
A related trust issue: HHS' physical security department issues the cards, but only the information technology shop has the money to make the cards. The two divisions need to share information and resources.
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Intellectual Property
Patent Ruling For EBay Still Reverberates, Experts Say
by Andrew Noyes
The Supreme Court's landmark 2006 decision to side with Internet auctioneer eBay in a dispute over the Web site's "Buy It Now" feature already has impacted the patent system and will continue to do so as judges interpret the ruling, an American Bar Association panel said Friday.
The unanimous opinion ordered a lower court to reconsider its ruling in favor of MercExchange, which claimed ownership of the technology behind the button that lets eBay users buy items without bidding. The court also said a four-factor test should be used exclusively before imposing injunctions after juries find patent violations.
The test requires a plaintiff to demonstrate that it has suffered irreparable injury; that remedies available under law are inadequate compensation; that a remedy is warranted after considering the balance of hardships; and that the public interest would not be disserved by a permanent injunction.
U.S. District Judge Liam O'Grady of Virginia told the ABA intellectual property summit that courts will have to be creative and employ "traditional types of final orders" used in non-patent cases. Those depend on "balancing hardships [cited by litigants] and looking at alternatives to straight injunctions," he said.
To be sure, the post-eBay-ruling era is "a very interesting time" for companies battling over patents, O'Grady said. Courts' reliance on the multi-factor test will impact business models and "we'll continue to see some really interesting case law out of it," he said.
The Supreme Court's opinion stated that a plaintiff in a patent feud cannot automatically assume the presumption of irreparable harm, added Esther Lim, an attorney at Finnegan Henderson in Washington. During the discovery process, "it will behoove plaintiffs and patentees to start gathering facts to identify what the market is," she said.
Erick Kraeutler, an attorney with Morgan Lewis in Philadelphia, said he believes the eBay case effectively "swept away" the tradition of the U.S. Appeals Court for the Federal Circuit and lower courts. At least seven district cases have been denied permanent injunctions since eBay, he said.
He cited the federal circuit's recent reprieve for the Internet telephone firm Vonage, which is accused by Verizon Communications of violating patents for Web-based phone service. The court issued a temporary stay of an injunction issued by a lower court so the company can enroll new customers while it tries to overturn the ruling.
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Crime
Videogames, Virtual Worlds Spark Crime Concerns
by Andrew Noyes
Real-world scourges like money-laundering and other financial crimes have not begun to plague American videogame enthusiasts, but a high-tech lawyer warned the American Bar Association on Thursday that the problem could be on the horizon.
Sean Kane, a partner at New York's Drakeford & Kane who studies legal issues and virtual worlds, told the group's annual intellectual property conference that attacks on computer-created communities already are confounding law enforcement officials in Asian markets.
South Korea, for example, has reported instances where individuals have manipulated a game to generate millions of dollars in actual currency. Several cases have surfaced in the United States, the most notable being a Pennsylvania attorney's lawsuit over a virtual land deal that cost him real money.
In 2006, Marc Bragg, an avid player of the popular online fantasy game Second Life, sued San Francisco-based Linden Lab, the product's creator, in a small claims court. He claimed the company breached a virtual land auction contract and violated his state's law against unfair trade practices and its consumer protection act.
Kane also said that in a number of instances, copyright-protected designs for real buildings -- like college campuses -- are being duplicated in Second Life. No U.S. cases have been brought concerning IP infringement and the infrastructure of the virtual world.
Meanwhile, Second Life was visited this year by the FBI to determine whether gambling that occurs there is legal. People in the online community can gamble with U.S. currency, buy and sell goods and services, and even solicit sex.
Wilmer Hale attorney Samir Jain noted that it would not be a stretch for some critics of popular Web-based casinos to apply federal and state gambling laws to Second Life because they already have been adapted to cover online wagering.
Various real-world gambling statutes that have been applied to Web world include the 1961 Interstate Wireline Act, the 1955 Illegal Gambling Business Act, and the Unlawful Internet Gambling Enforcement Act, which became law last year. Racketeering and money-laundering rules also have been used to close online casinos, he said.
"If you're betting on a sporting event or playing online blackjack, you have to think about gambling laws now" and they can potentially apply to an even broader range of activities, he said. Major anti-gambling laws largely hinge on "whether a player gets a payoff" from taking a financial risk, Jain said.
The FBI's interest in Second Life raises questions about whether made-up currency like the community's "Linden Dollars" is "of value," Jain said. The answer may be affirmative because several online resources let users convert Linden Dollars into U.S. dollars.
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On The Hill
Two Senate Bills Would Raise Cap On H-1B Visas
by Theresa Poulson
The record-setting rush to apply for the limited number of visas for highly skilled workers reverberated in the Senate this week, with the filing of two separate measures to increase the cap.
The cap for the 65,000 H-1B visas available for fiscal 2008 was met April 2, closing the annual window for applications in the shortest time on record. Sen. John Cornyn, R-Texas, said that is evidence that "we urgently need to reform our policies for highly skilled workers in the scientific and technology fields."
Cornyn introduced a bill, S. 1083, with several provisions aimed at boosting U.S. competitiveness in the global market, including one to make more visas available. "Foreign students graduating from our universities this spring are virtually shut out of the U.S. job market," he noted.
Cornyn said current immigration policies prohibit the United States from retaining some of the best and brightest students graduating from its colleges and universities, so workers are lost to foreign competitors.
Additionally, Sen. Chuck Hagel, R-Neb., introduced a measure, S. 1092, that would temporarily increase the number of H-1B visas.
On another front, Sens. Max Baucus, D-Mont., and Mark Pryor, D-Ark., introduced legislation that would require stronger protections and parental controls to prevent children's access to sexually explicit material over the Internet.
The measure, S. 1086, would require Web-site operators to tag their explicit contact and hide pornography behind a "clean" home page. The legislation also would require the adult Web sites to ask for age verification upon accessing them.
The bill already has drawn criticism from tech watchdogs (see separate story) and privacy advocates, including the American Civil Liberties Union.
Two measures that target the airline industry also were introduced this week. One bill, S. 1095, would require airports to screen all people with access to the secure areas of airports upon arrival.
The other piece of legislation, S. 1085, would "require airlines to publish important performance statistics, such as the percentage of on-time departures and delays for each passenger flight, on their Web sites," sponsor John Thune, R-S.D., said in a webcast.
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Today's Feature:
Executive Summary
The U.S. government lodged a pair of formal World Trade Organization complaints this week against China for lackluster enforcement of intellectual property rights and barriers it imposes on trade in music, movies and books.
Every Friday, read the Executive Summary by K. Daniel Glover.
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E-briefs
States: A group of Democratic legislators in Michigan that pushed a plan to give schoolchildren in the Wolverine State digital music players backed away from the proposal Thursday. The Detroit Free Press reported that state House Speaker Andy Dillon and Reps. Matt Gillard and Tim Melton also said in a news conference that they will reimburse Apple Inc., which makes iPod digital players, for a trip they made to the company's offices to California earlier this year. Melton said there has been mass confusion about the spending plan, which advocated more funding for technology to be deployed in classrooms. He said it was misconstrued as a measure to buy Apple's iPod music player for every student. "We've let this thing get out of control," Melton said.
E-Government: Top White House adviser Karl Rove did not intentionally delete his e-mails from a Republican National Committee server, his lawyer told AP on Friday. Congressional committees headed by Democrats are seeking e-mails sent by Rove and other officials for their investigation into the firings of eight U.S. attorneys. The White House announced Wednesday that some e-mails may have been lost, and on Thursday, Democrats hinted that Rove purposely deleted them himself. Rove's attorney, Robert Luskin, said the White House adviser was under the impression that the e-mails in question were being archived in accordance with federal law and had no knowledge that they were being deleted from the Republican Party's servers.
Civil Liberties: The Justice Department on Friday submitted a proposal to Congress to amend the decades-old Foreign Intelligence Surveillance Act. The submission follows a year of discussion within the intelligence community. The Bush administration's proposal to update the 1978 law reflects "the revolution in telecommunications technology" that has taken place since its enactment "while continuing to protect the privacy interests of persons located in the United States," an agency press release said. The plan is "technology-neutral," unlike the original statute that contained provisions tied to specific communication methods, officials said. The proposal also aims to streamline the FISA process by extending the authorization period for non-U.S. persons, allowing the FISA Court to focus its resources on cases that concern American citizens.
Crime: A federal judge on Thursday sentenced the president of a software development company to 13 months in prison for tax evasion. U.S. Attorney Scott Schools announced that Troy Aberle also has been ordered to pay a $3,000 fine and $115,657 in restitution for evading taxes and wilfully submitting a false return for United Business Technologies. Aberle pleaded guilty to multiple charges in February after being indicted by a federal grand jury in March 2006. According to investigators, Aberle's scheme resulted in the government losing more than $115,000 taxes. U.S. District Judge Martin Jenkins sentenced him.
E-Government: A computer glitch contributed to the demise of a Martian orbiter last November, National Aeronautics and Space Administration officials announced Friday. The Mars Global Surveyor, which had studied the Red Planet four times as long as originally planned, succumbed to battery failure after a sequence of events involving onboard computer memory and ground commands. The findings came from a preliminary report by a NASA internal review board. The vessel last communicated with Earth on Nov. 2. Soon after, low battery power likely left the orbiter unable to control its movements. "The loss of the spacecraft was the result of a series of events linked to a computer error made five months before the likely battery failure," said board Chairwoman Dolly Perkins, a deputy director of NASA's Goddard Space Flight Center.
Intellectual Property: NBC's top lawyer told the American Bar Association's intellectual property conference on Friday that despite well-intentioned efforts by policymakers and the private sector, the United States is "losing ground" against content pirates and counterfeiters. "In virtually every sector of the U.S. and global economy, the problem of IP theft is getting worse, not better," said Richard Cotton, NBC's general counsel. IP crime "has not commanded the attention, respect, resources" and public policy clout that it deserves, Cotton said. The long "tentacles" of IP crime means "modest measures have no hope whatsoever of success." Stakeholders must do a better job of explaining to government that the scope of problem is massive and deserves to be a presidential-level priority. Industry also needs to be a part of the solution, Cotton added. NBC, for example, is working with YouTube to develop filtering technologies to prevent unauthorized clips on the video-sharing site.
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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
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