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Editor's Note: Tech Daily will not publish Monday, July 2, through Wednesday, July 4, due to the Independence Day holiday. We will resume publication on Thursday, July 5.
Campaigns
Candidates Use Web For Late Fundraising Appeals
by Heather Greenfield
Former President Clinton is among those making last-minute e-mail fundraising pitches for presidential candidates ahead of Saturday's donation-reporting deadline for the second quarter of the year.
Under the subject line "Having fun yet," the former president referred to the "Sopranos" spoof that he and his wife, Sen. Hillary Clinton of New York, did this month for her presidential campaign. But he also said campaigns are "serious business" and asked people to donate to his wife.
"Come June 30, all the campaigns will be measured on what they raised in the last three months," he said. "We have to raise more online before then to show her strength and keep her campaign going." The campaign announced that Clinton did indeed set a fundraising record this quarter by raising $27 million.
"It is more than any Democrat has ever raised in the second quarter of the 'off" year," Clinton communications director Howard Wolfson wrote on the campaign's blog. "While that figure is record-setting, we do expect Senator [Barack] Obama to significantly outraise us this quarter."
Obama raised nearly $25 million last quarter, which put him ahead of Clinton in donations, though she had more dollars from transferring Senate campaign funds.
Obama's campaign has not released second-quarter numbers yet but announced Thursday that it has had 250,000 donors so far this year. In a blog posting Friday, the campaign featured an interview with a teacher whose $100 contribution made her the 250,000th donor.
This week, campaign manager David Plouffe made an e-mail appeal, with imbedded YouTube interviews with donors. "Join the drive to reach 250,000 donors -- a quarter-million people -- by June 30th," he wrote. "It will send a powerful message that our movement is both bigger and deeper than anything presidential politics has ever seen."
The financial war chests are seen as a test of political strength. Some see the numbers for two candidates -- Democrat John Edwards and Sen. John McCain, R-Ariz. -- as putting them in danger of falling from the first tier.
Elizabeth Edwards sent an e-mail Thursday asking supporters to help meet Edwards' goal of $9 million this quarter and to fight the political rhetoric of pundits like conservative Ann Coulter. Posting video of Coulter's recent sarcastic suggestion that she might wish Edwards to be killed by terrorists, Mrs. Edwards has raised more money for her husband than any other e-mail campaign, but the campaign declined to give exact numbers.
John Edwards sent another e-mail Friday with a link to his 48-hour fundraising drive.
McCain's Web site shows a goal of raising $3 million this quarter, and graphics show $2.9 million raised so far. Blogs have offered spoofs of McCain and Edwards fundraising letters.
Mitt Romney, meanwhile, is expected to lead Rudy Giuliani and other Republican candidates, and a Romney fundraising blitz this month that made 200,000 calls helped.
On Friday, Romney's Web site features a pop-up video of him superimposed on the screen, asking for support to bring conservative values to Washington and explaining the importance of a donation by Saturday.
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Civil Liberties
Civil Libertarians Reflect On Impact Of Internet Case
by Andrew Noyes
Ten years ago, the Supreme Court acknowledged the Internet's distinctiveness as a means for free expression when it ruled that online speech is entitled to the highest possible First Amendment protection. This week, technology policy watchers reflected on the importance of that decision.
They agreed that the Web world has changed considerably since the high court overturned anti-obscenity provisions of the Communications Decency Act on June 26, 1997, as part of the American Civil Liberties Union's landmark case against the federal government.
"The blogosphere, social-networking, online grassroots political organization -- things we take for granted in 2007 -- are built on the foundation of online free expression established in 1997," Center for Democracy and Technology founder Jerry Berman wrote on his group's blog.
Berman warned that the "vision of the free and open Internet that we fought for is once again under strain from technological and regulatory forces." He wrote, "New questions will test the resolve of those who have defended the Internet since its advent as a mass medium."
On the same blog, CDT Staff Counsel John Morris said threats to online free speech continue and "are even more diverse" now than 10 years ago when Reno v. ACLU was decided. "It is likely that we will be fully employed for years to come," he said of the lawyers at CDT.
ACLU attorney Chris Hansen said his group was "proud to lead the first and perhaps most important fight for free speech on the Internet, [but] no fight is ever completely won." Hansen was the lead lawyer in the case and since has argued and won other Internet-related legal battles.
Most recently, Hansen defeated the Justice Department in a retrial of a case involving a 1998 law aimed at protecting children from inappropriate online sexual material. The ACLU argued that the Child Online Protection Act imposed draconian sanctions for content acknowledged as acceptable for adults but "harmful to minors."
Federal and state government censorship attempts, as well as efforts to clamp down on the social-networking site MySpace and video-sharing site YouTube, "make clear that continued vigilance is essential," Hansen said.
Will Rodger, policy director for the Computer and Communications Industry Association, said that Reno v. ACLU put Congress on notice that "it had failed to understand technology that was driving almost all economic growth."
"Lawmakers rushed to understand what they had gotten so wrong and garner support from the latest bunch of high-tech millionaires," Rodger recalled. That led to a flood of legislation late in the decade -- and much of it was good for the tech sector, he said.
But a decade after the ruling, most members of Congress "still know very little about the Internet or technology broadly," Rodger said. "There has been a constant erosion of the freedoms that decision provided," added Lynne Bradley, the American Library Association's top lobbyist.
"While Internet technology has improved, wrong-headed laws trying to restrict these new technologies could weaken our ability to benefit from these enhancements," she said. "Laws are needed that encourage use of these new technologies, while at the same time providing education that will protect our children and others who are using these new breakthroughs."
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Spectrum
Competitors For Airwaves Issue Dueling Reports
by David Hatch
With the FCC drafting rules to govern the upcoming auction of spectrum to be relinquished by television broadcasters, Verizon Communications is increasing efforts to derail a proposal that it says favors one bidder.
The auction of the so-called 700-megahertz spectrum, which has exceptional propagation characteristics, must occur by Jan. 28.
At issue are plans by Frontline Wireless to construct a $15 billion to $20 billion nationwide, high-speed Internet network with public-safety and commercial applications. Frontline would secure at least 10 megahertz of 60 MHz to be made available for commercial purposes. It also would control half of an additional 24 MHz reserved for public safety.
But a Verizon-funded report, released Thursday by Criterion Economics, warns that if the plan is approved, it might be difficult to unravel. "The FCC's history of recovering spectrum from private licenses who fail to meet build-out requirements is discouraging, as evidenced by the infamous NextWave episode," the report says.
That was a reference to Frontline Chairwoman Janice Obuchowski, co-founder of the defunct NextWave, which won more than $4 billion of spectrum at auction in 1996 but defaulted on the payments and went bankrupt. Obuchowski, now president of Freedom Technologies, a telecom consulting firm, ran the National Telecommunications and Information Administration under President George H.W. Bush.
"You would think that [the FCC] would be so stung by that episode that they would do everything they could to prevent the agency from being taken again," Criterion President Hal Singer said. Criterion receives funding from another Frontline critic, the wireless association CTIA.
"That was an entirely different business model and an entirely different regulatory model," Frontline spokeswoman Mary Greczyn responded. While NextWave made installment payments, "Frontline is putting all its money on the table," she said.
Frontline's backers also include former Democratic FCC Chairman Reed Hundt, now a senior adviser with the McKinsey & Company management consulting firm, and venture capitalists James Barksdale, John Doerr and Ram Shriram.
The report emphasizes that for the past decade, the FCC has let market forces determine auction winners. "Frontline asks both U.S. taxpayers and public-safety agencies to become its business partners, its first and largest investors," the document asserts.
Given the magnitude of Frontline's proposal, Criterion argues that taxpayers and public-safety groups should be asking tough questions about the number of towers required, the technologies to be used and financing of the construction, among other matters. But with the FCC expected to issue auction rules in July or August, "none of those questions, or dozens more like them, has been systematically asked, let alone answered," Criterion says.
On Friday, Frontline countered with its own analysis, concluding that its proposal would improve "social welfare" and boost auction revenues.
It noted that Verizon and other dominant telecom firms critical of Frontline's plan initially received cellular spectrum for free, providing them with "operational" advantages not afforded to others. Frontline emphasized that auctions provide a rare opportunity for competitors to emerge.
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Net Governance
Internet Body Takes Aim At Domain 'Tasting,' 'Kiting'
by Andrew Noyes
The organization that manages the Internet-addressing system made significant strides this week in the ongoing battle against individuals and companies that exploit its five-day add/drop grace period for Web addresses.
Leaders for the Generic Names Supporting Organization, a major body of the Internet Corporation for Assigned Names and Numbers, voted Wednesday to initiate a formal policy-development process on domain-name "tasting" and "kiting."
Tasting is when an entity registers several Web addresses and takes advantage of the grace period, during which names can be returned for a full refund. The loophole allows tasters to keep the ones that get the most traffic.
Kiting is repeatedly adding and dropping the same domains every few days to avoid registration fees while making money off pay-per-click links. Both practices are becoming more prevalent online, officials said. A full report on the topic is due at the GNSO meeting in September.
ICANN Board Chairman Vint Cerf told Technology Daily that there are "open questions about whether the five-day grace period should remain or not." He said, "This is one of those things where you make rules and the business community finds out how to get around them or adapt them to their advantage."
The Internet Commerce Association's Philip Corwin, who represents domain-name investors, developers and the direct-search industry, lauded ICANN's progress. He said leaders have shown "much greater responsiveness" to this issue than problems that have arisen in the past.
But some intellectual property owners have pushed for updates to existing cyber-squatting laws and increased criminal penalties. Corwin warned that approach could lead to serious unintended consequences for legitimate Web businesses. Regulating tasting and kiting must be handled by ICANN, not by Congress, he said.
The soon-to-be-launched Coalition Against Domain Name Abuse sees the GNSO's decision to begin developing a policy as an encouraging sign. But the group's spokesman, Joshua Bourne, said he hoped the process "will not result in the adoption of half-measures that benefit the few and generate unintended consequences for the masses."
The loophole in ICANN rules "must be closed altogether in order to protect consumers from criminal scam artists" who use the add/drop grace period "as an electronic ski mask," said Bourne, a co-founder of the consulting firm FairWinds Partners, which will run the domain coalition.
Tasting and kiting give cyber criminals more anonymity resulting from temporary delegation within the domain system, Bourne said. At any time during that window, and conceivably after an attack occurs, the domain can disappear from the system as if it never existed, he said.
As many as 32 million names currently are being sampled, and roughly half infringe on the rights of trademark owners, the coalition estimates. Nearly all of them point to pay-per-click sites, which means known brands could experience customer confusion and increased expenses for keyword clicks on search engines.
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Security
With GOP Holdout, Lawmakers Try To Move 9/11 Bill
by Chris Strohm
Senate and House leaders struggled Friday to appoint conferees to finalize negotiations on a bill to implement unfulfilled recommendations of the commission that investigated the Sept. 11, 2001, terrorist attacks. But at least one Senate Republican was still objecting to moving forward.
Senate Majority Leader Harry Reid, D-Nev., was repeatedly rebuffed this week when he asked Senate Republicans to go to conference on the bill, which has been hanging in limbo for months. Reid was expected to ask again Friday for unanimous consent to proceed, but the prospects did not appear good, aides said.
Sen. Tom Coburn, R-Okla., continued to object because the bill does not contain a provision on auditing how billions of dollars in homeland security grants are spent, his spokesman said.
"The post-grant auditing process he was told would be in the bill is not in the bill," the spokesman said. "Until that provision is fixed, the bill is going nowhere."
Democrats have, however, appeared to relent on language that would give federal airport screeners collective-bargaining rights, which was another sticky issue preventing a conference.
The White House has threatened to veto the bill if it includes that provision. An aide for Senate Homeland Security and Governmental Affairs Committee Chairman Joseph Lieberman, I-Conn., said he has agreed to drop the provision to keep the bill alive. Lieberman steadfastly opposed all previous efforts to remove the provision.
It was not clear whether House Homeland Security Committee Chairman Bennie Thompson, a Mississippi Democrat and another staunch supporter of collective bargaining for screeners, has agreed to drop the provision.
Republicans also said they have not yet received an official assurance from Democratic leaders that the provision has been deleted from the bill.
"If the majority wants to say on the record that that provision will be eliminated, then that puts us in a much different position," said an aide to Senate Minority Leader Mitch McConnell, R-Ky.
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Television
Local Officials Optimistic About Video-Franchising
by Michael Martinez
Despite the recent enactment of state laws that weaken or strip the authority of local governments to negotiate video-franchising deals, an alliance of local government groups said on Friday that there is still room to be optimistic.
Members of the TeleCommUnity Alliance said during a teleconference that most recent laws establishing statewide video-franchising regimes are easier for localities to swallow than earlier ones. More than a dozen states now allow video providers to enter their markets by applying for statewide deals, instead of forcing them to negotiate with one locality at a time.
The laws have been sought aggressively by large telephone companies offering new television services. The stakes at the state level were raised by the failure of nationwide franchising legislation during the 109th Congress.
But TeleCommUnity Alliance staff counsel Gerry Lederer noted that statewide franchising bills have succeeded in less than half of the states where they were they introduced this year. He attributed the slowdown to the fact that lawmakers have been able to study the effects of the laws in states that have them.
According to Lederer, the majority of recent franchising laws are considerably more reasonable from the perspective of local governments. Of the initial group of states with streamlined franchising systems, he said only Virginia adopted requirements for applications to provide services to rural and low-income areas. But the fact that five out of the last nine laws included such "build-out" requirements is progress, he said.
"I think build-out, if anything, is the winner," he said.
But Lederer also argued that the terms of the laws have been dictated by the companies lobbying for them, and that the laws enacted in states where AT&T is the dominant telephone provider generally have been the most aggressive.
He predicted that the debate will continue to mature in states where bills are still on the table, which include Illinois, Massachusetts, New York, Pennsylvania and Wisconsin. The issues that he claimed will shape future discussions include public educational and governmental programming, and consumer protection.
Lederer called consumer protection "the new beachhead" in the statewide franchising fight. He said lawmakers will benefit from being able to study whether prices have dropped and competition has been sparked under statewide regimes, as companies that have pushed for the laws promised they would.
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Education
Teaching Science To Foreigners And Minorities
by Aliya Sternstein
An influx of foreign students into U.S. graduate science programs has generated concern that they are being granted more access to education, scholarships, promotions and research funds than minority students, according to a new Congressional Research Service report.
Rather than supporting minority graduate students, universities distribute most of their resources to departments that are enrolling foreign students, the report stated. It was released June 21 and cites papers and testimony written between 1999 and 2007.
The report includes testimony by Frank Morris, a former University of Texas at Dallas professor, who stated: "The generous immigration policy" coupled with "the disproportionate and much better subsidy out of U.S. taxpayer funds of foreign doctoral student[s] over all American minority students -- and especially much better than the support given to African-American doctoral students ... has created a situation that place the economic well-being of the African-American community in jeopardy."
Norman Matloff, a computer science professor at the University of California at Davis, who favors limits on skilled-worker visas, said he largely agrees with Morris' remarks but added that under-representation of minorities in the fields of science, technology, engineering and math, or STEM fields, is a complicated issue.
Graduate programs have a "sincere desire" to welcome minorities, but "structural" issues like reliance on standardized tests present roadblocks, he said.
Matloff noted that the Graduate Record Examination, which measures the ability to do quick calculations, "is tailor-made for foreign students from Asia, where they have been taking time-pressured tests from age 5 onward. By contrast, culturally, black and Latino students work at a more careful, deliberate pace."
GRE coaching is cheap abroad but is "completely out of reach of many minority students" in the United States, Matloff noted.
Association of American Universities spokesman Barry Toiv said: "Our universities think it's a serious problem that minorities are underrepresented in the STEM fields. ... [But] the problem is not international students. The problem is we need to do more to encourage participation in these fields by minority students."
He added, "The international students are not being deliberately advantaged."
Research supporting or refuting the inequality argument is scarce. An August 1997 study by an economics professor at the University of California at San Diego, reported that findings "are strongly suggestive of the hypothesis that immigrants 'crowd out' investments in public education by American-born minorities. But the results are not definitive."
A February 2004 paper by Harvard economics professor George Borjas indicates little evidence of a crowd-out effect for the typical native-born American.
Former tech executive Vivek Wadhwa, now a Duke University executive in residence, called the claim of academic discrimination "absolute nonsense." He said, "It is often harder for a foreign student to get admission and achieve advancement because of their disproportionate numbers."
STEM Education Coalition Co-Chairman James Brown said that under-representation of minorities in the STEM fields is due to many factors at every point in the educational pipeline. "I would say that immigration policy is probably one of those factors, but perhaps not a central one," he said.
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On The Hill
New Senate Tax Bill Aimed At Internet Commerce
by Sandra Gonzalez and Theresa Poulson
New legislation calls on Congress to update laws governing state taxation of interstate commerce, a move that would impact online vendors who sell beyond the borders of their headquarters state. The bill was one of several technology-related measures introduced this week.
Sens. Charles Schumer, D-N.Y., and Mike Crapo, R-Idaho, introduced the legislation, S. 1726, which would bring into question some governments' contention that the presence of a firm's customers within a state allows that state to impose taxes on "business activity."
"These companies are facing a confusing and costly assortment of state and local tax rules, some enacted by legislatures and others imposed upon them by state revenue authorities and upheld by state courts," Schumer said. He cited the Supreme Court's decisions last week not to rule on two cases concerning interstate commerce taxes as a reason for lawmakers to act.
Schumer also said federal laws should be updated to reflect changes in commerce. "New technologies allow companies headquartered in one state to provide services to consumers across the country," he said. "The Internet is replacing bricks-and-mortar stores. Companies and consumers are increasingly linked across state lines."
On the privacy front, meanwhile, two new measures aim to protect individuals' personal data. A Senate bill, S. 1691, would restrict the public display of Social Security numbers on the Internet by state and local governments, and a House measure, H.R. 2885, aims to clarify regulations for credit-monitoring services.
Other tech-related bills introduced this week were:
-- S. 1693, which seeks to accelerate the adoption of a universally compatible health information technology system to improve patient care, reduce medical errors and cut costs. The measure was approved Wednesday by a Senate committee. (See separate brief)
-- H.R. 2905 and S. 1742, which would prevent the FCC from re-implementing the "fairness doctrine" that required broadcasters to give equal time to different political views (see separate brief). An amendment with the same purpose was added to a House-passed appropriations bill Thursday.
-- H.R. 2917, which would require the FCC to report the actions it is taking to inform the public about the transition to digital television signals.
-- S. 1738, which would establish a special counsel whose goal would be to prevent child exploitation prevention. The bill also calls for improving the Internet Crimes Against Children Task Force and increasing resources for regional computer forensic labs.
-- H.R. 2911, which would apply provisions in the Truth in Lending Act to inform consumers about electronic fund transfers.
-- And S. 1719, which would provide additional educational assistance to veterans pursuing degrees in science, technology, engineering or mathematics.
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Today's Feature:
Executive Summary
The technology industry is, in a word, "disappointed" with the immigration bill being pulled from the Senate floor this week after supporters failed to get the 60 votes needed to limit debate on the measure.
Every Friday, read the Executive Summary by K. Daniel Glover.
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E-briefs
Trade: U.S. Trade Representative Susan Schwab and South Korean Trade Minister Kim Hyun-chong are scheduled to sign a trade agreement Saturday, a move that won praise from Microsoft. Pamela Passman, a vice president at the software company, said in a Friday statement that "this agreement is significant for the high-tech sector and continued U.S. economic growth." She said it promises not only traditional market openings to South Korea but also "robust intellectual property provisions, fair and effective protection for investors, improved market access for service providers, and significant improvements in transparency and regulatory due process. Passman added that "Microsoft intends to work closely with the Congress and the U.S. administration to seek passage of this landmark agreement and to ensure that its innovative provisions will be a standard feature for all future free-trade agreements."
Privacy:: U.S. Treasury Department officials will be able to keep data on financial transactions collected in anti-terrorism investigations for only five years under a deal with the European Union to safeguard privacy rights, EU officials said Thursday. AP reports that the agreement, which must be endorsed by the 27 EU nations, replaces an interim data-sharing deal set to expire at the end of July. The United States and European Union share views on combating terrorism, but "these activities should be done in full respect for fundamental rights," said Franco Frattini, the EU justice and home affairs commissioner. The deal clarifies how the United States will use data from the Belgian-based bank-transfer consortium SWIFT in anti-terrorism investigations. A provisional deal also was reached on sharing data on trans-Atlantic air passengers. The European Commission said the United States agreed to adhere to "strict data-retention obligations."
E-Government: The European Commission has jumped on the YouTube bandwagon. On Friday, the policymaking arm of the European Union announced that it has launched a channel on YouTube to make audiovisual material more accessible to the public. The commission also hopes to use the medium to better explain its policies and actions that affect people across the region. Most of the content is currently in English, but French- and German-language clips also are available. The commission said other languages will be added when possible.
Net Governance: The Internet Corporation for Assigned Names and Numbers will bid farewell to longtime board chairman and Internet pioneer Vint Cerf at its October meeting in Los Angeles, but the president of the group that manages the Web-addressing system said Friday that there is no heir apparent for the post. "We have had, to date, the chair of ICANN and one of the most engaging founders of the Internet wrapped up all in one person," Paul Twomey told reporters on a teleconference. "That's not a job description of the chair of ICANN." No one within the organization would hold Cerf's successor to that high a standard, but "the board is very concerned about the issue," Twomey said. ICANN, which met in San Juan, Puerto Rico, all week, could fill three seats on its board before a new chair is chosen, so the nomination process is currently uncertain, he said.
Intellectual Property: EMI Music Group inked a deal this week with the digital music company Snocap that will let U.S. music fans purchase high-quality tracks free from anti-piracy restrictions through artist Web sites, social-networking pages and blogs. The MP3 downloads will be encoded at 320 kilobits per second, more than twice the audio quality of standard files, EMI said in a press release. Snocap will sell the single tracks for $1.30, and entire albums will be made available later this year. EMI chief Eric Nicoli said the initiative is "a great way to connect artists directly with fans." EMI agreed earlier this year to drop piracy-protection technology on its products and signed a distribution deal with the online retailer Amazon.com.
Crime: The author of an anonymous change to the Wikipedia biography of professional wrestler Chris Benoit that predicted the death of his wife confessed early Friday to writing purely out of speculation and without any evidence, AP reports. In a post on a discussion page attached to the Wikipedia entry, the author asserted that the change to the online encyclopedia was a huge coincidence and nothing more. "I just can't believe what I wrote was actually the case. I've remained stunned and saddened over it," the poster said. Police did not discover the bodies of Benoit, his wife, and their 7-year-old son until 14 hours after the Wikipedia page was edited. The authenticity of the most recent posting could not immediately be confirmed, though the user has the same IP address as the author of the original post.
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Editor in Chief -- Louis Peck, 202-739-8481
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