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On The Hill
Bill To Create Media 'Shield' Stalls In Senate Panel
by Aliya Sternstein
A bill that would prevent journalists from being prosecuted for protecting confidential sources stalled in the Senate Judiciary Committee on Thursday after Arizona Republican Jon Kyl said the language could undermine national security.
Committee Chairman Patrick Leahy, D-Vt., expressed reluctance about delaying action on the "shield" bill, S. 2035, but said: "I do think we ought to work on it. I think we can work through it." The panel recessed for other business minutes later; the bill was still pending at press time.
The House Judiciary Committee approved a companion bill, H.R. 2102, in August that would explicitly extend the journalistic shield to bloggers as well. The Senate legislation and several amendments agreed to Thursday do not specifically cite bloggers.
The protections would cover persons engaged in "journalism," which is defined as "the regular gathering, preparing, collecting, photographing, recording, writing, editing, reporting, or publishing of news or information that concerns local, national, or international events or other matters of public interest for dissemination to the public." A Senate staffer said the text does not include or exclude anyone based on medium; it covers people based on how they gather news.
The bill includes exceptions so law enforcers can obtain information from reporters in investigating crimes or national security threats. "If there's one word to describe this bill, it's 'balance,'" said co-sponsor Charles Schumer, D-N.Y.
Kyl disagreed, saying the standards for protecting certain classified communications would be too loose. "I think it's unbalanced," he said. "The unauthorized disclosure of classified information is a very serious crime," especially in a time of war.
Kyl noted the absence of a hearing on the bill before the vote was scheduled. "It would be my goal that we could have a time out and discuss the concerns" detailed in a letter he said he had just received from the Justice Department.
Several industry groups, meanwhile, submitted a letter opposing the bill on the grounds that the language "does not work in the private sector" because "someone could intentionally defraud a person or a business or take their most private records and still receive the bill's protections."
The letter was signed by the American Beverage Association, Association for Competitive Technology, National Association of Manufacturers, Rubber Manufacturers Association and U.S. Chamber of Commerce.
The groups said that they have no qualms about media using anonymous sources to report on government activities, public- or private-sector wrongdoing, or other important public-interest stories. But they added: "We, along with many in Congress, have recognized that personal information and information property are more valuable and vulnerable in today's information age, particularly on the Internet, than in the past. ... We must oppose [the bill] in its current form."
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Taxes
Differences Over Length Of Tax Ban Prompt Delay
by David Hatch and Terry Kivlan
The Senate Commerce Committee on Thursday pulled from consideration legislation that would extend the federal ban on taxing Internet access amid rancor over whether it should be extended temporarily or permanently. The move by Democratic Chairman Daniel Inouye of Hawaii occurred after it appeared that the senator had brokered a compromise.
Inouye had planned to offer a "manager's amendment" that would have surpassed the shorter-term extensions previously approved by Congress. But at deadline, Inouye said that while Democrats have settled on a six-year continuation of the tax prohibition, some but not all Republicans agreed to the compromise. "We need to have further discussion," Inouye said. He added that he opposes a permanent ban because "we don't know what the future holds."
Industry groups such as the wireless association CTIA and the Telecommunications Industry Association have been lobbying for a permanent remedy, arguing that certainty is needed to foster infrastructure investment and to encourage consumer adoption of the technology.
But the legislation slated for consideration would impose a four-year extension and would grandfather Internet access taxes that now exist in a few states. The measure also would clarify that the prohibition does not apply to ancillary services bundled with Internet service, such as television programming.
On Thursday, Senate Minority Leader Mitch McConnell, R-Ky., was the latest in a string of Republicans on Capitol Hill and in the Bush administration to call for a durable fix.
"Taxing Internet access raises costs to consumers while discouraging innovation, and we should act now to block these taxes permanently," McConnell said in a statement. "The Congress should encourage innovation and broadband deployment, not tax the life out of it."
McConnell backs an alternative bill that would make the exemption permanent.
Sen. John Sununu, R-N.H., had planned to offer an amendment in committee to impose a lasting extension, industry sources said. His office did not return a telephone call. The markup session, which began at 2:30 p.m., was expected to tackle several other measures.
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Lobbying
EBay Sellers Hit Capitol Hill To Discuss Tax Issues
by Heather Greenfield
Nearly two dozen eBay-enabled small-business owners traveled to Capitol Hill on Thursday to sell lawmakers on the need to exempt small businesses from some types of Internet taxes.
EBay, which handles $52.5 billion in worldwide sales across the Internet each year, has organized such fly-ins for the past five years. Tod Cohen, who handles global government relations, said it is more powerful to have people from particular states talk to their own members of Congress.
Thursday's visit happened to be on the day when the Senate Commerce Committee was set to debate legislation to extend a moratorium on taxing Internet access, but it was pulled from consideration. The ban expires Nov. 1. (See related story)
Hani Durzy, the director of corporate communications for eBay, said that although different from taxes on online sales, the tax moratorium is important because taxes on Internet access could slow high-speed Internet deployment. Some eBay sellers are asking lawmakers from states like Kentucky, Nevada and Texas to make the moratorium permanent.
Also on Thursday, the National Association of Manufacturers sent a letter to members of the Senate Commerce Committee, urging them to implement a permanent ban as soon as possible.
The even bigger concern for the 1 million people who make a substantial part of their income as eBay sellers is the Streamlined Sales Tax Project, which aims to let state and local governments tax Internet sales. Businesses are not required to collect taxes on remote sales, either over the Internet or by mail, unless the firms have a physical presence in the state where the buyer lives.
Several states have adopted the plan, but Congress, which has constitutional authority over interstate commerce, has not yet addressed the idea in legislation. Sen. Michael Enzi, R-Wyo., a former mayor and state legislator, introduced legislation, S. 34, that would require all sellers, including Internet sellers with businesses that net more than $5 million a year, to collect taxes on remote sales.
The SSTP is designed to streamline the system so businesses would not have to collect taxes from 1,500 different tax districts, with the rate based on exactly where the buyer lives. But Durzy said it doesn't go far enough and the SSTP would still be burdensome for sellers.
"We would need a robust small-business exemption," Cohen said, noting that a $5 million threshold would be insufficient. The technology to help business owners wade through different tax laws exists but is still burdensome, he said.
In addition to collecting taxes, Cohen said, sellers would face annual audits from each state.
EBay also is fighting a regulation that Cohen said would put the firm in charge of estimating seller earnings and reporting them annually to the Internal Revenue Service. He said eBay has no way to know which sales are finalized and does not know initial product values, which are necessary to gauge profit margins.
EBay selected the people for the fly-in based partly on which members they hoped to reach, as well as the appeal of their small-business stories. Some of the highlighted sellers are part of an eBay Web site called Mainstreet.com that encourages eBay users to learn about political issues and get involved.
Cohen said Main Street has 300,000 members who are active in writing letters to Congress on tax and Internet issues. He said eBay users sent 380,000 letters to 10 senators supporting network neutrality and emphasizing the need for legislation to protect equal access to broadband content.
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Antitrust
Senator Sees High Stakes In Google, DoubleClick Plan
by Andrew Noyes
Google's proposed $3.1 billion bid for the DoubleClick online advertising firm underwent its first round of congressional scrutiny Thursday afternoon when a Senate panel heard from fans and foes of the planned acquisition.
Google announced its merger plans in April, spurring complaints from Internet rivals like Microsoft and Yahoo, as well as some high-tech watchdogs. Critics argue that the deal raises serious competition and privacy concerns.
Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., said he has not reached a conclusion with respect to any of the questions in play but has "an open mind" and wants to examine the issues closely. "The stakes for our society and the increasingly Internet-based economy are very high," he said in opening remarks.
David Drummond, the Internet search giant's top lawyer, told lawmakers that the merger actually will promote competition. "Numerous independent analysts" have found the pairing to be a combination of complementary businesses, he said in written testimony.
"DoubleClick is to Google what FedEx or UPS is to Amazon.com," Drummond said. Google's main advertising business involves primarily the sale of text-based promotions, whereas DoubleClick delivers and reports on display ads, he said.
"Our acquisition of DoubleClick does not foreclose other companies from competing in the online advertising space," he said. "Rather, the transaction is just one of several that underscore the strong competition in the online advertising space."
Yahoo recently bought the online ad firm Right Media; America Online acquired the European-based player Adtech AG online and behavioral targeting firm Tacoda; and Microsoft paid $6 billion for the Web ad provider aQuantive.
Google also "deeply believes in protecting online users' privacy," which is why the company was late to the display ad game, Drummond said. On top of new privacy policies, Google is tinkering with new technologies and tactics to safeguard citizens' data.
Progress and Freedom Foundation fellow Thomas Lenard told lawmakers that while the deal does not appear to pose anti-competitive or privacy problems, the issues have been conflated, partly because the FTC has jurisdiction over both topics.
But Brad Smith, Microsoft's general counsel, argued that the merger could mean higher prices for advertisers, lower revenues for Web sites that serve ads, and poorer quality content for consumers. He said the deal also would give Google "exclusive control of the largest database of information on individual online behavior the world has ever known."
Telecommunications analyst Scott Cleland said the Google, DoubleClick pairing is "one of the most far-reaching, least understood and important mergers this subcommittee has ever reviewed." He urged the panel to oppose the merger and push the FTC to seek an injunction in federal court.
A combined company would have "little accountability to consumers, competition, regulators or third-party oversight," Cleland said in written remarks.
The FTC is planning a town-hall meeting for Nov.1-2 to examine issues surrounding online behavioral advertising, and the merger likely will be a topic of debate. The House Judiciary Committee also may investigate the deal, sources said.
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Security
Rep. Harman Slams Coordination At 'Fusion Centers'
by Andrew Noyes
The head of a House Homeland Security subcommittee slammed the FBI and Homeland Security Department on Thursday for not coordinating efforts to help state law enforcers probe suspected terrorist plots.
California Democrat Jane Harman, chairwoman of the Intelligence, Information Sharing and Terrorism Risk Assessment Subcommittee, said she was "baffled" by the agencies' failure to consolidate multiple databases so the staffers at "fusion centers" do not have to access several systems each morning to see what threats the nation faces.
She also said it is "disturbing" that the FBI and Homeland Security do not recognize each other's security clearances at more than 40 local and regional hubs around the country. "This is obviously absurd," Harman said at an oversight hearing on the centers.
There is an "absence of national strategy" for the centers, which get state and federal funding, and many of them are merely "co-location centers" that do not have the infrastructure to effectively share data, she said. They also lack sustainable resources and a common baseline, she said.
Harman stressed that the FBI and Homeland Security must partner with state intelligence officials and "not dictate who should be doing what." "I think everyone recognizes that fusion centers hold tremendous promise," she said.
Subcommittee ranking Republican Dave Reichert of Washington noted that "what makes the centers work is the fusion of the personalities" involved. The same characteristic also raises difficulties for the programs' effectiveness, he said.
"We know it's going to be a long process; we know there are going to be some hiccups in the process," said Reichert, a former sheriff.
Congressional Research Service analysts Todd Masse and John Rollins, and Eileen Larence of the Government Accountability Office offered recommendations for how to improve the centers. Both agencies recently studied the programs.
They said Congress could ask the executive branch to draft a national fusion center strategy because no uniform model exists. They added that lawmakers could provide more detailed guidance on the centers' federal funding mechanisms.
Jack Tomarchio, Homeland Security's principal deputy assistant secretary of information analysis; FBI Deputy Assistant Director Michael Mines; and Norman Beasley, counter-terrorism coordinator at the Maricopa County, Ariz., sheriff's department, also testified.
Privacy watchdogs have expressed concerns with the fusion centers. Homeland Security's Data Privacy and Integrity Advisory Committee met last week to discuss those and other center issues.
The American Civil Liberties Union said it is worried about the involvement of non-law-enforcement agencies and private-sector entities in some fusion centers. The mass collaboration "gives rise to even more significant concerns about the roles these parties play in the collection and analysis of the private information concerning Americans," the group said in a press release.
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Security
Senators Decry Security Gaps On Northern Border
by Chris Strohm
Senators on Thursday demanded to know how much more personnel and technology the Homeland Security Department needs to secure the nation's northern border.
The demand came after government investigators who were simulating the smuggling of radiological materials managed to sneak into the United States undetected multiple times. In response to that recent Government Accountability Office probe, members of the Senate Finance Committee expressed outrage at a hearing.
"We need to get border security right; lives depend on it," said committee Chairman Max Baucus, D-Mont. "GAO's testimony today is, in a word, alarming."
Sen. Olympia Snowe, R-Maine, called GAO's findings "deeply disturbing news."
Greg Kutz, a GAO managing director, asked: "Is there sufficient human capital and technology for [Homeland Security officials] to achieve their mission at this point? I think that's a serious question for the U.S. Congress and the Senate to address."
Border Patrol Deputy Chief Ronald Colburn told the committee the department uses a mix of technology, personnel and infrastructure to monitor the borders. "You don't always see us when we always see you," he said.
In response to questions, however, Colburn disclosed that at any given time, only 250 Border Patrol officers are on duty along the northern border, which stretches about 5,000 miles. "We agree that the border is not as secure as it should be," he conceded.
Baucus shot back, "It sounds like we need more people."
Senators repeatedly asked Colburn how much more personnel is needed along the northern border. "That's the multibillion-dollar question," Colburn replied.
Senators said they did not feel Colburn was being candid with them. After about an hour of testimony, Baucus scolded Colburn, saying he was being vague and evasive in answering questions from the panel.
"Here we are in the Congress trying to get specific answers ... and you're trying to protect yourself," Baucus said. "I don't get the sense you really care about this."
Colburn defended himself. "I take this very seriously," he said. "I think I've been very candid with all of you." He said more progress is being made in securing both the northern and southern borders than ever, especially with the help of technology and unmanned aerial vehicles.
Colburn said the majority of resources are placed along the southern border because 99 percent of all illegal activity occurs there.
But Sen. Ken Salazar, D-Colo., said the Border Patrol might not be aware of how much illegal activity is occurring along the northern border because it is not monitored as much. Salazar said there is "a huge chasm" in terms of resources allocated for the two borders.
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Campaigns
MySpace, MTV Audiences Judge Candidate Answers
by Heather Greenfield
Technology is helping voters ask presidential candidates questions via video and e-mail, and a format unveiled Thursday by MySpace and MTV let online viewers vote in real time on whether the candidates had good ideas or dodged questions.
First up was Democrat John Edwards, who stood on a small platform that resembled a target with red-and-white stripes bursting from a screaming mouth, taking questions coming in all directions from New Hampshire college students. The interview with Edwards began slightly late but was broadcast live on the MySpace social network and will be broadcast again on MTV Thursday night.
Gideon Yago invited online viewers to use the polling widget on the MySpace Web site to "let the candidate know if you're feeling spun or inspired by his answers."
A student originally from New Orleans asked Edwards what he would have done differently as president after Hurricane Katrina. "Everything," said Edwards, who announced his candidacy in an online video from New Orleans' ninth ward and said parts of the city look the same now as they did three weeks after the hurricane hit.
"We don't need a surge in Baghdad. We need a surge in New Orleans," Edwards said, before outlining specifics. Chris Cillizza, a political blogger for The Washington Post, announced that Edwards' answer was a hit online, with most viewers giving a favorable response and 63 percent saying he had good ideas.
Edwards also drew big majorities for his answers to questions on health care, genocide and terrorism. After praising Democratic rivals Hillary Clinton and Barack Obama for having healthcare plans, Edwards said his is similar to Clinton's plan but Obama's would not mandate coverage, so it would not be universal.
Edwards also complained that President Bush has used terrorism as an excuse for various policies. "If you speak out on the president spying on Americans, then you don't understand terrorism," Edwards said. "I understand the threat of terrorism. What I don't understand is George Bush."
On another topic, Edwards said the United States should put diplomatic and economic pressure on China to use its leverage as Sudan's top oil customer to stop the genocide in Darfur.
Cillizza announced that during the first half of the event, 6 percent of viewers overall either thought Edwards was out of touch or had wrong ideas. But Edwards did not get accused of dodging questions -- even from those who disagreed with him.
"Since not everyone can be in the room, we wanted to find a way that could engage [people] online," said Jeff Berman, MySpace's senior vice president of public affairs.
Internet technology makes more two-way communication possible, but debate formats have remained largely the same, without much in the way of interaction or follow-up questions, he said. "Rather than having candidates speaking, we wanted to create more of a two-way conversation consistent with MySpace," Berman said.
He said Edwards was the first candidate interviewed because he was the first to agree to the format, but interviews with most of the other Democratic and Republican presidential candidates have been scheduled.
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Courts
Group Sues To Block Use Of E-Voting Machines
by Michael Martinez
A New York-based organization that wants computerized equipment out of federal elections has taken its case to federal court.
The nonprofit We The People Foundation is spearheading a lawsuit against 10 states over their use of e-voting machines. The complaint, filed in a U.S. district court in New York late last week, challenges the constitutionality of the voting systems used in California, Florida, Illinois, Iowa, New Hampshire, New York, Ohio, Oregon, South Carolina and Texas.
The foundation wants to prohibit those states from conducting primary and general elections next year on electronic systems that it says prevent votes from being counted in a transparent and verifiable manner.
"The voting processes to be used by defendants will not be open, verifiable or transparent, and will rely on machines and computers for vote-counting, all of which means the possibility for error and human fraud will be unnecessarily and unreasonably heightened," according to the complaint.
The plaintiffs in the case are from various states. One of them also was a plaintiff in a lawsuit that tried to block the use of electronic machines in a Republican straw poll in Iowa last month. That suit failed, and machine glitches complicated the contest. Ultimately, GOP officials counted roughly 1,500 ballots by hand to determine the winner.
In a telephone interview, We The People Founder Robert Schulz said there have been discussions about amending the complaint to target the systems in every state. But he doubts the complaint will be expanded because primary elections are only a few months away in some states.
Legislation to improve the accuracy and transparency of federal elections has been introduced in both chambers of Congress. Bills by Senate Rules and Administration Committee Chairwoman Dianne Feinstein, D-Calif., and Rep. Rush Holt, D-N.J., would require e-voting machines to be backed up by verifiable paper trails.
The House measure, H.R. 811, has been sponsored by more than 200 lawmakers. But before bringing the measure to the floor, Democratic leaders have insisted on addressing concerns about how much the plan would cost and how it would affect disabled voters.
The legislation appeared to be headed for the floor earlier this month and was discussed by the House Rules Committee. A Holt spokesman said negotiations with leaders are ongoing, but there are no immediate plans for floor action.
Schulz said the bill, which would allow touch-screen machines so long as they produce paper receipts of votes, would not satisfy his concerns about e-voting. He advocates returning to a paper-based system where ballots are counted before the public by hand.
"It doesn't solve the fundamental problem," Schulz said of the bill. "It doesn't go far enough."
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Today's Feature:
State Roundup
An organized labor group in Maine this week launched an aggressive campaign to keep utility regulators from authorizing the sale of telephone lines that belong to Verizon Communications.
Every Thursday, read the State Roundup by Michael Martinez.
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E-briefs
On The Hill: The Senate Judiciary Committee approved a bill Thursday that would crack down on fraudulent Internet pharmacies. Without debate, the senators agreed to the measure and technical amendments offered by bill sponsor Dianne Feinstein, D-Calif. Feinstein's language included a suggestion by Committee Chairman Patrick Leahy, D-Vt., that the DEA report to Congress on recommendations for thwarting the sale of controlled substances from foreign countries via the Internet. The bill would prohibit controlled substances to be sold over the Internet without a valid prescription from a doctor who examined the patient. "Online drug traffickers have used evolving tactics to evade detection by law enforcement and circumvent the proper constraints of doctors and pharmacists," Leahy said. As a result, dangerous drugs "are too often only a click away." At a May hearing, the committee heard testimony from Francine Haight, a mother whose teenage son died from an overdose of painkillers he purchased online.
E-Government: House Clerk Lorraine Miller on Thursday told the House select committee charged with examining a disputed roll-call vote before the August congressional recess that a written tally was never completed for the vote they are investigating. CongressDaily reported that the controversy involves a Republican procedural motion on an appropriations bill that Republicans say they won but that was stolen by Democrats when the presiding officer called the final outcome before voting was finished. The written tally -- a combination of electronic votes and those cast by hand on cards by lawmakers -- is traditionally written and handed to the member presiding over the vote from the Speaker's chair before the vote is officially called. "[The written tally] is always the same as we have in the computer," Miller said. When asked by Rep. Artur Davis, D-Ala., about what the absence of a tally sheet actually means, Miller said that without it, a vote is still open.
Telecom: Verizon Wireless reversed course Thursday and said it will let an abortion-rights group use Verizon's mobile network for a text-messaging program, AP reports. The announcement came a day after the company said it had denied a request for the program by NARAL Pro-Choice America. "The decision to not allow text-messaging on an important, though sensitive, public policy issue was incorrect, and we have fixed the process that led to this isolated incident," Verizon Wireless spokesman Jeffrey Nelson said in a statement. Senior executives "reviewed the decision and determined it was an incorrect interpretation of a dusty internal policy," Nelson said. That policy "was designed to ward against communications such as anonymous hate-messaging and adult materials sent to children." The NARAL program lets people sign up to receive text messages. Other leading wireless carriers had accepted NARAL's program.
Nanotechnology: Purdue University's Network for Computational Nanotechnology last week announced that it has received a five-year, $18.2 million grant from the National Science Foundation. The network will use the funds to support the National Nanotechnology Initiative, a federal research and development program established to coordinate multi-agency efforts in the field of nanotechnology. Purdue's network will focus on providing expanded capabilities and services for computer simulations. "This additional funding will help us expand these sophisticated computational tools to researchers, educators and even industry," the network's director, Mark Lundstrom, said. Others participating in the project include: the University of California at Berkeley, the University of Illinois at Urbana-Champaign, the Molecular Foundry at Lawrence Berkeley National Laboratory, Norfolk State University, Northwestern University and the University of Texas at El Paso. Nanotechnology involves the manipulation of matter at the molecular and atomic levels.
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