Security Surveillance Law Prompts Clashes In Two Panels by Andrew Noyes and Chris Strohm      The nation's top intelligence official told lawmakers on Tuesday that recent changes to a decades-old surveillance law were badly needed in light of the technological evolution that has occurred since the statute was originally passed.      The Foreign Intelligence Surveillance Act's definition of electronic surveillance before updates hurried through Congress in August did not foresee cellular telephones, e-mail and the Internet, National Intelligence Director Michael McConnell told the House Judiciary Committee.      The House Intelligence Committee also held a hearing on the law, with Democrats and Republicans on both panels clashing over how to change it.      When the 1978 law was enacted, McConnell told Judiciary, "almost all local calls were on a wire and almost all international communications were in the air," and FISA distinguished between the two. Today "the situation is completely reversed" with most overseas calls using wire and local calls passing through the air.      McConnell said FISA's power has been diminished because communications that used to be transmitted via radio or satellite now move via fiber-optic cables, which were not covered by the mandate. The 1978 law also placed a premium on the location of data collection, which he said has been complicated by the interconnectedness of modern networks.      Before last month's FISA updates, the law's requirement to obtain a court order, based on a showing of probable cause, "slowed, and in some cases prevented altogether, the government's ability to collect foreign intelligence information," McConnell said.      The updated language, which expires in six months unless Congress extends it, allows the director of national intelligence and attorney general to authorize some spying without first getting warrants from a secret court created by the underlying law.      Assistant Attorney General Kenneth Wainstein, who testified alongside McConnell, said it is important that Congress give liability protection to telecommunications firms that allegedly have assisted in certain intelligence activities. That exemption was not part of the latest FISA update.      Committee Chairman John Conyers, D-Mich., complained that the FISA modifications were made without proper vetting and what lawmakers have learned since "does not give this chairman much cause for comfort."      The bill was written so broadly that it permits the government to "intercept any and all electronic communications from U.S. citizens to anyone even thought to be abroad," Conyers said. The new power could also apply to business and library records, personal mail and "domestic searches of our homes," he argued.      New York Democrat Jerrold Nadler, who chairs the Constitution, Civil Rights and Civil Liberties Subcommittee, said he was particularly worried about the "administration's ongoing charm offensive." "Let's have some truth in advertising," he said, spurring an eruption of cheers from some in the audience and gavel-banging from Conyers.      House Intelligence plans to debate long-term legislative changes to FISA on Oct. 4. At his panel's hearing, Chairman Silvestre Reyes, D-Texas, said the temporary legislation is "a very flawed bill" that "allows warrantless physical searches of Americans' homes, offices and computers. It converts the FISA court into a rubber stamp. And it contains insufficient protections for Americans who will have their phone calls listened to and e-mails read under this new authority."      But Republicans on both committees fired back at Democrats, saying that some of them, as well as privacy advocates, are overstating the effects of the FISA changes.      Intelligence Committee ranking Republican Pete Hoekstra of Michigan decried the "hysterical hypotheticals" offered by foes of the law. "Their wild, baseless accusations strain the limits of reality and, without reason, impugn the integrity and honor of the hard-working intelligence professionals we ask to protect our homeland."

Labor Immigrant Group Wants Changes For Green Cards by Aliya Sternstein      An alliance representing high-skilled legal immigrants said Tuesday that it is rallying members in an effort to fix a green-card visa system that is inherently designed to create backlogs.      Immigration Voice, a 3,000-member organization that promotes the interests of legal, employed immigrants with pending applications for permanent residency, is urging Congress to make legislative changes that would let high-skilled workers already in the United States stay legally.      "We appeal to Congress" to reform the immigration system by distributing more green cards each year and removing limits on the number of green cards per country of origin, Aman Kapoor, president and founder of Immigration Voice, said on Tuesday.      "The root of the problem" is the per-country limits, he said. "The population of the world is not evenly divided."      Immigration Voice Vice President Jay Pradhan, who moved to the United States in 2000 from India, said that this year, the group's members spent considerable time trying to meet deadlines for federal paperwork because the due dates changed. "The deadlines are short. The paperwork is huge."      Rep. Keith Ellison, D-Minn., joined the group's leaders in calling for an end to the backlog. U.S. productivity depends on streamlining the immigration system for skilled workers, he said.      But he added that green card reform "is no substitute for investing in high-tech education in our own country." Immigration and U.S. education are critical and synergistic, Ellison said.      Ellison co-sponsored a bill, H.R. 1645, that would nearly triple the number of skilled worker visas and make it easier for foreign students with U.S. advanced degrees to stay and work.      Robert Hoffman, an Oracle executive and co-chairman of the Compete America coalition, told the gathering that the United States' ability to compete in the global economy "depends on whether we are able to recruit and retain the world's best talent." But today's green-card system forces that talent to wait nearly five years for permanent residency papers, he said, calling the resultant financial and professional limbo "unconscionable."      Compete America wants changes to both green card and high-skilled worker visa programs. Hoffman said many people awaiting green cards must rely on a limited supply of temporary visas.      Software and Information Industry Association General Counsel Mark Bohannon said changes are needed not only to keep innovators in this country but also to let foreign entrepreneurs create new jobs for Americans. "We want to keep our employment base strong," Bohannon said. "We also want to create new businesses."      But not everyone is convinced that visa changes are necessary. Norman Matloff, a computer science professor at the University of California at Davis, who favors limits on skilled-worker visas, wrote in a Sept. 17 report that the green-card backlog is "a contrived crisis."      Green-card categories for tech professionals are prioritized by level of talent, with foreign nationals of extraordinary ability and outstanding professors having virtually no wait, "merely a few months," he stated. "Thus the industry lobbyists' claims that we are losing the 'geniuses' are completely unfounded."

Competitiveness Innovation Hurdles Include Health, Energy Costs by Heather Greenfield      America's spirit of innovation and entrepreneurship are strong, but those strengths are being undermined by unnecessary costs that businesses face for litigation, regulation, health care and energy, according to panelists speaking at the Commerce Department's competitiveness summit Tuesday.      Harvard University business professor Michael Porter said employers need to drive healthcare reform toward insurance for all Americans because the government cannot address the complex forces alone.      Intel CEO Craig Barrett said healthcare costs are becoming more of a driver than wages for him in moving jobs overseas because he can hire engineers in China for the cost of providing health insurance to engineers and their families in the United States.      Beyond changes to health care, Porter said the government can improve competitiveness by making trade policy work -- specifically by tackling intellectual property issues and enforcing laws.      He said if the United States could get paid for its intellectual property, it would help resolve what he described as the largest trade deficit in history. "We have to protect intellectual property," Porter said.      E. Floyd Kvamme, a partner emeritus at the venture-capital firm Kleiner Perkins Caufield & Byers, called for better immigration rules for highly skilled workers.      Kvamme said changes to rules for temporary H-1B visas and permanent residency green cards are needed. He said that increasing the number of H-1Bs would just give a foreign engineer up to seven years of work experience with an American company before sending him "home to compete against us."      The discussion about green cards evolved out of a less optimistic discussion about the United States educating its own engineers.      Porter said education is his biggest concern, but he believes the United States still has a good system for entrepreneurs, a belief in competition and great capital markets. "Our innovation strength so far has overcome human resource weaknesses, but with China and India coming on the scene, it's a time bomb."      Other panelists expressed frustration that education has not improved despite 25-year-old reports alerting the nation to the problem. "People thought they knew what to do about education," Kvamme said.      He also criticized the existence of 200 federal science, technology, engineering and mathematics programs in high schools. "How can that possibly make any sense?" Kvamme asked, suggesting that the number could be trimmed to 15 that work.      On the energy front, Porter was more optimistic about curtailing rising costs. "Energy costs are something I think we'll innovate our way around," he said.      Daniel Yergin, chairman of Cambridge Energy Research, agreed, saying he had "never seen so much effort going into innovation across the energy sector."      Kvamme said venture capitalists definitely have found the energy sector and are investing at double-digit levels compared to just a few years ago. "The next Google is in the energy sector," he said.

E-Government No Great Strides Are Apparent On Federal Web Sites by Aliya Sternstein      Federal Web sites essentially are treading water in their attempts to keep pace with private-sector portals, according to one expert who analyzed new e-government data.      Due to bureaucracy and budgets, there is no one specific element in federal online performance that has made great strides, said Larry Freed, president and CEO of ForeSee Results. He reached that conclusion after studying third-quarter data from the University of Michigan's American Customer Satisfaction Index on e-government. The index was released Tuesday.      Federal e-commerce sites registered the largest improvement last quarter but dropped by nearly 3 percent in the third quarter, according to ACSI. These sites let citizens apply for benefits, request services and buy goods, like bonds and treasury securities.      The ACSI results indicate that federal sites are continuing a plateau in citizen satisfaction, with overall happiness slipping 0.5 percent to a total score of 73.3 on ACSI's 100-point scale. For the past nine quarters, aggregate satisfaction has hovered between 73.3 and 74.      "Expectations are being set not by other agencies but by experiences on Yahoo and Amazon," Freed said of private Web portals. Unlike call centers and other citizen services, Web sites require constant upgrades, he added. Commercial sites "keep raising the bar."      The biggest gap between the private and federal sectors is in the area of search, he noted. While the government works hard at improving navigation and recognizes the importance of precise search functionality, Freed said search experiences on private-sector sites are generally much more helpful and focused.      Seventy-nine percent of e-government sites mentioned search as their first or second priority, according to ACSI.      The good news: The premier federal sites continue to build on their online assets. The 19 top-caliber sites this quarter have a history of superior performance, with scores of 80 or higher.      And "there's a lot of sharing of internal best practices," Freed said. "That's one of the advantages the government has over the private sector."      ACSI Founder Claes Fornell observed, "An investment in online citizen satisfaction will pay itself off as more citizens will choose the online channel over more costly alternatives."      Darrell West, a political science professor at Brown University and the author of numerous e-government reports, said he was not surprised by the poor e-government satisfaction results this quarter. "I think we're in a status quo period as far as government technology," he said.      The federal government has not prioritized information technology spending for the past few quarters, West added.      But some agencies are starting to add features for submitting and reading online feedback on proposed regulations, rather than just posting mailing addresses for public comment, he noted.      West agreed that search functionality is one of the greatest weaknesses of government Web sites. "The problem today is information overload."

Courts AT&T Loses Patent Spat; Qwest Wins Telecom Case by Michael Martinez      A Texas-based company has won a $156 million verdict against AT&T in a patent dispute over calling-card technologies.      A federal jury last week delivered a verdict giving TGIP one of the largest patent awards in the history of the district court in eastern Texas, a venue that hosts many intellectual property cases.      TGIP sued AT&T last year, accusing the company of violating a pair of patents it owned for technologies that allow consumers to "recharge" calling cards by purchasing extra time at retail outlets. The court could triple the award at its own discretion because the jury found that AT&T willfully infringed upon TGIP's patents for the card-activation system. The company also is seeking awards for attorneys' fees and future AT&T royalties.      In a telephone interview, Douglas Cawley, an attorney for TGIP, said it is rare for a judge to exercise full discretion to enhance an award in such cases. But he said the fact that the jury found AT&T willfully infringed upon the patents may boost the sum.      U.S. District Judge Ron Clark will make a final determination on the AT&T award later this fall. An AT&T spokesman said via e-mail that the company is prepared to challenge the verdict.      "We are disappointed by this result, which is contrary to the law and evidence in this case," he said. "We will seek to have it corrected by the trial court or on appeal."      Verizon Communications, a co-defendant in the case, reached a confidential settlement with TGIP on the second day of the trial earlier this year.      A small Iowa-based cooperative, meanwhile, did not fare as well this week in a legal dispute against Qwest Communications International.      The Iowa Supreme Court on Friday decided that the state's public utilities board can enjoin the East Buchanan Telephone Cooperative, which serves communities in the eastern part of the state, from blocking wireless signals from outside carriers, including Qwest.      Iowa regulators decided in 2004 that the cooperative should not be allowed to block cellular calls coming to its customers through Qwest. The parties were engaged in a dispute over connection fees that Qwest did not believe it should have to pay.      The cooperative challenged the utility board's decision in a state court, which upheld the regulatory board's ruling. The cooperative then appealed to the state's highest court.      The court agreed that the utilities board has the power to order the cooperative to permanently refrain from blocking the disputed cellular traffic from Qwest.

Lobbying Videogames Group Leads Fight Against The States by Liza Porteus, for Technology Daily      The Electronic Software Association is working to forestall legislative efforts in New York and elsewhere to reduce children's exposure to violent videogames.      "At the state level, we hope that as we get the message out about videogames, we'll see less and less of this kind of restrictions. ... Does it really make any sense to treat a Tom Clancy videogame different than the movie or book it's based on?" said Gail Markels, ESA's senior vice president and general counsel. "As a taxpayer in New York, I'd rather my money go toward funding a school lunch program."      Current New York bills would prohibit the sale of games that contain "realistic depictions of depraved violence and indecent sexual image" to minors. They also would: make it a felony to sell games to minors; require consoles to include parental controls; establish a council to study youth violence and interactive media; and require content labels.      California Gov. Arnold Schwarzenegger, meanwhile, is under fire for his August pledge to appeal a federal ruling against a state law banning the sale of violent games to kids.      "A lot of the legislation attempts to regulate violent expression under sort of an obscenity model," First Amendment Center scholar David Hudson said. "In other words, they try to say violence can be regulated the same way sex can ... and the courts have just not bought that."      Markels said ESA has worked with state officials to educate them about the industry. At an upcoming Boston event, ESA will demonstrate various games and existing parental controls in products like the Nintendo Wii. And ESA recently worked with Washington Gov. Christine Gregoire on a public-service announcement about game ratings.      "I think as a parent, my husband and I are in a better position to make those value judgments than the government or a poor [store] clerk," Markels said.      ESA wants to discuss alternatives such as educating parents with New York Gov. Eliot Spitzer, but Spitzer appears committed to moving forward on the issue.      "The concept was, some of the videogames that are readily available to the public are extraordinarily graphic and violent and the content may not be appropriate to children or teenagers," Spitzer spokesman Paul Larrabee said. "I don't think he has any concern whatsoever about [the bill] standing up to constitutional review."      Steve Masur, managing partner of Masur Law, which sent a letter co-signed by ESA and other industry groups to Spitzer, said the language could lead to retailers clearing games off shelves.      "[The message] should be clear to the shop holder: 'This is an X-rated game; I should not sell it,'" Masur said. "It creates a chilling effect not only against those games but against all games."      Jason Delarocca, executive director of the International Game Developers Association, said it is better for industry to self-regulate, as the Entertainment Software Rating Board has with ratings designed to indicate age-appropriateness of games. "No one looks to the movie industry saying 'There's too many Godfathers out there,'" Delarocca said.

Intellectual Property Broadband Firms And Studios Find Common Ground by Andrew Noyes      Hollywood studios are attempting to deepen their relationship with high-speed Internet providers because both groups are grappling with the challenges of advances in digital media, Motion Picture Association of America Chairman Dan Glickman said during a Tuesday speech.      Glickman, who addressed a Pike & Fischer legal summit, said companies like Comcast and Verizon Communications are "racing to manage their networks" and "unlock new choices and services for consumers." At the same time, there is a "common interest in reducing the amount of infringing material out there," he said.      Despite the industries' previously adversarial posture, Glickman said times are changing and "there's incentive to do the right thing -- we're all in this together."      New technologies like high-quality digital video distribution, user-generated content and social-networking sites present shared opportunities for Internet providers and MPAA's members, Glickman said. "This is not an us-versus-them issue."      Broadband firms' revenue "depends on the legitimate operation of networks, and they're finding their networks crowded with infringed material," he said. Meanwhile, those companies are jumping into the content pool by offering original Web entertainment.      Keeping infringing material offline is a chief priority for MPAA, but Glickman is also focused on making sure that calls to keep sexually explicit or violent content away from children online do not lead to censorship.      Movies and television have their own ratings tools, and "we're now looking for ways of using those systems or others" on the Web so users are aware of what types of sites they visit and what content they will see, he said. "Technology provides that option."      "The Internet continues to change the parameters of modern society quite rapidly ... and we're all trying to catch up," Glickman said. Rules governing online behavior have "come a long way in a short period of time," but more progress is needed that benefits creators, distribution platforms and consumers.      During a follow-up panel, Copyright Alliance Executive Director Patrick Ross said digital-rights management is part of the solution. Technological content protection, paired with the 1998 Digital Millennium Copyright Act that makes it illegal to bypass such tools, is working, he said.      "Without DRM, this business can't exist," he said, acknowledging that traditional DRM "isn't the answer for all ... but that should be the decision of the rights holder."      The aim, he and Glickman agreed, is "hassle-free, reasonably priced and easy-to-use" methods of protecting intellectual property.      But the "content protection we're looking at isn't the sort of content protection that DMCA is designed to protect," said Matt Schruers, senior counsel for the Computer and Communications Industry Association. "In the Web 2.0 world, DRM is largely not self-sufficient."      David Leibowitz, executive vice president of the on-demand video provider Gotuit, said the problem with DRM is that no one in the digital media arena -- from the movie studios to YouTube -- wants to pay for it. "Those left in the middle are the companies trying to develop innovative technologies to do that," he said.

Today's Feature: People Column Tom Navin is leaving the FCC as the Wireline Competition Bureau Chief, and FCC Chairman Kevin Martin announced plans to appoint Dana Shaffer as the replacement. Every Tuesday, read the People Column by Heather Greenfield.

E-briefs Intellectual Property:   SoundExchange, a royalty collector for digital music, announced Tuesday that 24 small, commercial Web radio services have signed agreements that allow them to continue operating through 2010 with essentially the same terms they enjoyed under a now-defunct 2002 webcasting law. The deals are retroactive to Jan. 1, 2006, which is the beginning of the current rate period. Some Web sites opted not to sign the agreements because their business models benefit more from the regular commercial rates negotiated earlier this year, SoundExchange said. The group's chief, John Simson, called the development "a great deal for someone who wants to start or build a webcasting business." Simson's group inked a deal with large webcasters in August and is still working on an agreement with noncommercial entities like National Public Radio. E-Government:   Pending federal legislation that would mandate the nationwide adoption of e-voting paper trails would prevent voting jurisdictions from embracing technologies that can improve the democratic process, according to a report released Tuesday. The Information Technology and Innovation Foundation found that Congress should allow the use of fully electronic balloting systems. Bills have been introduced in both chambers of Congress to require that e-voting machines be backed by paper trails for auditing purposes. The report urged federal lawmakers to authorize funding to research secure voting protocols and other solutions to ensure the reliability of e-voting systems. "If the United States wants to continue to be the world's leader in fair, secure and democratic elections, it must commit to developing improved new voting systems, not go back to the voting technology of the 19th century," the report said.

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