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Antitrust
Senators Balk At FCC Timetable On Media Rules
by David Hatch and Andrew Noyes
Senators concerned that the FCC is poised to relax its limits on media ownership threatened on Wednesday to block the agency from conducting a Dec. 18 vote on the matter.
North Dakota Democrat Byron Dorgan and Mississippi Republican Trent Lott, both senior members of the Senate Commerce Committee, may propose a "resolution of disapproval" that would enable Congress to veto any changes to the restrictions. They also are considering separate legislation to prevent action on an expedited basis.
Lott noted during a press briefing that one option is to amend a Senate bill with language reining in the FCC.
The lawmakers want the agency to complete a separate proceeding on localism -- the levels of local news and civic programming that television stations air -- before holding the vote. FCC Chairman Kevin Martin has indicated that localism might be addressed as part of the agency's broader ownership review. Dorgan complained about the apparent decision to fast-track the vote, saying "the accelerated pace is a surprise to everybody."
Lott said he came to Washington as a "deregulator" but has become increasingly worried about media consolidation. "I just don't think this is in the people's best interests," he said.
"The chairman has proposed a schedule which he is seeking consensus on," an FCC spokeswoman responded, adding that "we take concerns from members of Congress very seriously." The agency tentatively plans to hold an Oct. 31 hearing in Washington on localism and a Nov. 2 hearing in Seattle on media ownership.
An FCC official predicted that the congressional pressure would have an impact. "He will clearly have to take steps to reduce the heat he's going to face," the source said of Martin.
The agency faced a similar congressional backlash in 2003. Most of the changes approved then on a 3-2 party-line vote were later rescinded by an appeals court.
Senators are particularly incensed that the Republican-controlled FCC might loosen the federal ban on ownership of newspaper and broadcast outlets in the same market. The prohibition has been in effect since 1975, but combinations predating the ban have been grandfathered and some temporary waivers have been granted.
The FCC official said Martin also might increase the number of radio properties one company can own in a market and permit duopolies -- ownership of two TV stations by one entity -- in large cities. Duopolies are now permitted in small markets.
Dorgan and Lott have support from other powerful players, including Sen. Barack Obama of Illinois, one of the leading Democratic presidential contenders, who urged the agency in a Monday letter to allow an independent panel to develop proposals to foster diverse ownership of media outlets.
During a Wednesday hearing before the Senate Commerce Committee, Missouri Democrat Claire McCaskill said she has "heart palpitations" about large conglomerates dominating the radio and television businesses. Free Press Research Director Derek Turner accused the FCC of lacking "even the most basic understanding of what the true state of female and minority ownership is."
House Energy and Commerce Committee Chairman John Dingell, D-Mich., and Telecommunications and the Internet Subcommittee Chairman Edward Markey, D-Mass., issued statements Monday urging the FCC to provide adequate time for review.
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Security
Senators, Watchdogs Note Flaws In Terrorist List
by Chris Strohm
Senators on Wednesday questioned the Bush administration's ability to control the growth and management of the government's terrorist watch list, including whether appropriate safeguards are in place to correct mistakes and remove the names of innocent people.
Senate Homeland Security and Governmental Affairs Committee Chairman Joseph Lieberman, I-Conn., said during a hearing that the government's Terrorist Screening Center has made progress in developing an integrated watch list and has improved information-sharing with other federal, state and local law enforcers. But he said the watch list now contains about 860,000 names and soon will swell to more than 1 million.
"If many of those names are mistakenly there, the credibility of the terrorism watch list and its usefulness will be compromised," Lieberman said. "With the list likely to go over a million names in the near future, we need to know there are clear standards for putting names on it and taking names off it."
Committee ranking Republican Susan Collins of Maine said "the use of the terrorism watch list inspires both confidence and concern."
She noted that 15 of the hijackers who carried out the Sept. 11, 2001, terrorist attacks might have been stopped before they entered the United States had procedures been in place at the time to share watch-list information. She also called on the administration to ensure that innocent people can get their names removed from the watch list.
"We need to also improve the system for seeking redress if individuals believe they have been wrongly targeted," Collins said.
Lieberman and Collins were responding to a Government Accountability Office report released Wednesday that found the administration is not managing the watch list as effectively as possible. GAO also found that some individuals on the list went undetected through screening processes and were not identified until after they boarded airplanes or made it into the country.
Findings from an internal Justice Department investigation released last month also concluded that the watch list has inaccuracies and that the administration faces major problems managing it.
Leonard Boyle, director of the Terrorist Screening Center, told senators that not every name on the watch list is unique. He said some names are redundant and refer to the same person. He was unable to say how many unique names are on it. But he added that 95 percent of all records in the watch list pertain to foreigners, not U.S. citizens.
Boyle defended progress his agency has made in unifying the watch list, providing records to other agencies, implementing a redress process, and starting a 24-hour call center to help state and local law enforcers identify suspects they encounter. He added that the administration has six agreements with foreign countries, including a recent agreement with Spain, to share data.
Paul Rosenzweig, the Homeland Security Department's deputy assistant secretary for policy, cited several new programs to help the department utilize watch lists. Under the Secure Flight program, for example, the department will screen airline passengers before they board planes.
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Security
Officials Admit They Misjudged Virtual Fence Work
by Chris Strohm
Homeland Security Department and industry officials told lawmakers Wednesday that integrating technology to develop a virtual border fence has proved to be more challenging than expected, leading to technical glitches and ongoing schedule delays.
The department's so-called SBInet program already has been delayed more than four months, prompting concern on Capitol Hill that the effort could fall apart like previous expensive and risky border security efforts.
The department hired the contractor Boeing Integrated Defense Systems to develop the program, which is supposed to use technology, personnel, fencing and other infrastructure to control the borders. Boeing officials acknowledged in written testimony that they should have been more upfront with lawmakers about "the inherent schedule and performance risks associated with a demonstration program of this kind."
The first phase of the program calls for securing 28 miles of desert in Arizona. Gregory Giddens, the program's executive director, told lawmakers that most of the technical issues with that phase have been resolved. He said Homeland Security's Customs and Border Protection agency has begun certification and accreditation testing, and anticipates completing testing in November.
"CBP has provided Boeing with a list of deficiencies and direction on the path forward, and Boeing has expressed its commitment to fixing the system and delivering an operational capability to CBP," Giddens said during a joint hearing of the House Homeland Security Border Subcommittee and Management Subcommittee.
Department and Boeing officials previously have touted the SBInet program as being lower in risk than previous border security programs because it uses readily available technology rather than trying to develop new technology. But Giddens and Boeing officials told lawmakers they underestimated the challenge.
"Integrating complex, off-the-shelf technology that has never before been integrated has proven to be a challenge and has resulted in technological difficulties which have delayed CBP's acceptance of the system," Giddens said. He added that the current phase "has not been accepted by the government, and will not be accepted until Boeing resolves a number of integration and software issues."
Patience is also growing thin on the Hill for results. "I am extremely dismayed, to put it mildly," said House Homeland Security Chairman Bennie Thompson, D-Miss.
"We were told that this time around, the outcome would be very different, partly because the department has learned valuable lessons from prior mistakes," he added. "I have a growing sense of deja vu." The government "cannot continue to throw good taxpayer money after bad."
The Government Accountability Office also reported Wednesday that other efforts under SBInet are likely to slip in schedule, and costs could increase, mainly because the department plans to use commercial labor.
The cost of the first phase is $20 million and is not expected to increase, Giddens said. Giddens added that the experience will benefit other efforts.
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Intellectual Property
Researchers Urge Tweaks To 'Tech Transfer' Law
by Andrew Noyes
A panel of academic researchers praised a 25-year-old federal "technology transfer" law at a Senate Judiciary Committee hearing on Wednesday but hinted that it should be tweaked for the innovation-driven, 21st-century economy.
The statute known as the Bayh-Dole Act -- named after its sponsors, former Sens. Bob Dole, R-Kan., and Birch Bayh, D-Ind. -- offers government aid for university-based research with the aim of moving new technologies into the private sector for commercial use. The committee's interest in the topic dovetailed with its ongoing attempt to overhaul the U.S. patent system.
While Bayh-Dole does not need a "'major overhaul," Duke University law professor Arti Rai said, the current licensing model may not be appropriate for all technologies. "There are some situations when one size does not fit all," she said.
One such example is Iowa State University, which runs the Energy Department's Ames Laboratory. In 2006, the facility stood alone in the nation by exceeding the 5 percent royalty mark set under the law and, as a result, repaid taxpayers $1 million.
At the end of the 109th Congress, some lawmakers tried to raise the threshold to 15 percent so the school would not have had to make the payout. Chairman Patrick Leahy, D-Vt., resisted altering the law at the eleventh hour and said it required further study.
Iowa State Provost Elizabeth Hoffman reiterated the 15 percent pitch at the hearing, saying she would be "immensely grateful" for the update to Bayh-Dole. She said the university expects to repay the same amount to the government this year.
"The authors of Bayh-Dole and subsequent modifying legislation did not intend to incorporate a provision that would have a disparate and deleterious impact on small, successful nonprofit [government-owned, contractor-operated] labs," she said.
Robert Weissman, who runs an advocacy group that focuses on pharmaceutical access, testified on another perceived downfall of Bayh-Dole. He said he is not happy with how the law has been implemented by drug manufacturers.
He claimed in his written testimony that the federal government has "abrogated its duty" to ensure that drugs incorporating federally funded inventions are reasonably priced. "The result is a public policy outrage and a public health tragedy," he said.
The Pharmaceutical Research and Manufacturers of America said in a statement that Bayh-Dole's authors intentionally "did not intend to have the government set prices on resulting products."
Weissman recommended several changes to the system, including reforms to the National Institutes of Health's construal of a mandatory licensing provision that is meant to prevent the underutilization of federally funded inventions.
Charles Louis, vice chancellor for research at the University of California at Riverside, spoke broadly about the success of Bayh-Dole, noting that before 1980, few federally funded patents were licensed for development.
The law created a "uniform policy" that let tech transfer "skyrocket," and now more than 230 universities have offices dedicated to that practice. Louis, whose school system has been awarded the highest number of patents by any U.S. university for the last 12 years, urged lawmakers to "continue to nurture" Bayh-Dole.
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Intellectual Property
Royalty Hike May Ruin Webcasters, Executive Says
by Andrew Noyes
The founder of one of the largest Internet music services told the Senate Commerce Committee on Wednesday that a recent Web radio rate-setting decision would set "absurdly high" fees and could put many song-streamers out of business.
Pandora Chief Strategy Officer Tim Westergren, whose service boasts about 8.5 million registered listeners, said his sector has the smallest of all radio revenue streams but faces a hefty hike imposed by the Copyright Royalty Board.
Broadcast radio pays the recording industry nothing; satellite services fork over less than 3 percent of revenue; and cable pays roughly 7 percent. Under the new fee structure, Pandora would pay 50 percent of revenue in 2007 alone, Westergren said, and the seven-year-old firm is already "losing [money] hand over fist."
Westergren said he hopes the problem will be remedied through congressional or judicial action. A pair of bills, S. 1353 and H.R. 2060, would reverse the board's March decision, and private negotiations between Internet interests and the digital royalty collector SoundExchange are ongoing.
"As a musician, I'm heartbroken at the thought of silencing Internet radio," and as a webcaster, "I would be dismayed" to tell listeners that Web radio is dead, he said. "Everyone wants artists to be paid fairly, but we also want webcasters to survive."
SoundExchange Executive Director John Simson told Technology Daily after the hearing that "it is not in our interest to see [Internet radio] go away," but legislative action is not the right approach. "Businesses should get together" to arrive at a fair rate, he said.
Russell Withers, who owns 30 local radio stations and six television stations in seven states, said he and the National Association of Broadcasters support the legislation. The rate-setting is a "barrier to entry for many stations that want to be a part of the Internet revolution," he said.
Withers also touched on the music industry's recent push for performance royalties for AM and FM radio. Artists have not earned fees for over-the-air radio because of the long-held idea that analog transmissions do not constitute duplications.
Radio stations and recording labels have "always enjoyed a mutually beneficial relationship -- free music for free promotion," he said. But "slowing sales and a flawed business model for the digital age" are no excuse for using local radio as "a bailout fund," Withers added.
In many instances, music drives revenue for over-the-air broadcasting and it is "only fair that the artists who bring the music to life, and who attract listeners, are compensated when a radio station uses their music," the musicFirst alliance said in a news release.
Merge Records co-founder Mac McCaughan; National Federation of Community Broadcasters President Carol Pierson; National Public Radio Senior Vice President Dana Davis Rehm; and Free Press Research Director Derek Turner also testified.
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Health
E-Health Woes In The Military Frustrate Lawmakers
by Aliya Sternstein
At the third hearing on the topic this year, lawmakers on Wednesday struggled to understand why the departments of Defense and Veterans Affairs continue to have problems electronically sharing information necessary to treat service members and veterans.
"I hope and I expect that DOD and VA will tell us today that, by no more than a year from now, clinicians in DOD and VA will have full electronic access to the medical information they need to treat their patients, whether that information resides in computers owned by DOD or by VA," Arizona Democrat Harry Mitchell, chairman of the House Veterans Affairs Oversight and Investigations Subcommittee, said at a hearing.
According to findings released at the hearing by the Government Accountability Office, the departments have ad hoc processes in place if there is an immediate need to provide data on severely wounded service members to VA centers that specialize in treating such patients. The manual workarounds, like scanning paper records, are generally feasible only because the number of such patients is small.
Also, GAO said the departments have made some progress on a test project that allows for live, two-way views of certain outpatient data from existing systems at all VA and DOD sites.
In general, GAO found that the departments have made progress in their long-term ambition to modernize their health systems and in piecemeal initiatives, like the test, but much work remains to achieve electronic medical records that can be transmitted seamlessly. There is no overall plan that incorporates all of the ongoing activities.
Rep. Tim Walz, D-Minn., a retired member of the Army National Guard, asked GAO official Valerie Melvin for her assessment of the departments' timeline for implementing a comprehensive, two-way system.
"I am not able to say when the departments will be at the point of having a longitudinal bidirectional health system," she said. "Both agencies have told GAO they do not have a date."
Subcommittee ranking Republican Ginny Brown-Waite of Florida questioned whether the GAO had sensed reluctance on DOD's end to share information because of security concerns about the VA's computer system. Melvin said she is not aware of that problem.
But when Brown-Waite asked Brig. Gen. Douglas Robb, who served as the command surgeon for the U.S. Central Command until June, if the use of a proven life-saving information tool is being discouraged at some sites, Robb said, "There were some locations that did not support it as much as others."
That tracking application was used by surgeons in Landstuhl, Germany, to view the X-rays of an Army soldier impaled by a still-live grenade in Afghanistan before the patient arrived at the hospital. The man was at the hospital less than 24 hours after being injured.
Without the application, "you can imagine that the paperwork might not keep up with the patient," Robb said.
Veterans Health Administration official Gerald Cross said in written testimony that VA and DOD are working to expand two-way exchanges of radiology images, a capacity now being tested in El Paso, and "are on target to document a plan to share digital images enterprise-wide by March 2008."
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Lobbying
E-Gambling Fans Won't Fold Hand Congress Dealt
by Michael Martinez
Poker enthusiasts who trekked to Capitol Hill on Wednesday made it clear that they are not ready to fold in their fight over the legality of online gambling.
At a policy forum hosted by the Poker Players Alliance, a panel including a professional poker player and legal and policy experts took shots at the federal government's recent attempts to target the Internet gambling industry.
Several lawmakers already have floated proposals to fix perceived problems created by a new law that prohibits the financial industry from processing payments to online gambling sites. The alliance is among those lobbying aggressively to repeal the law -- or amend it to allow poker and other games of skill to be played online.
John Pappas, executive director of the alliance, charged that the proposed rules for enforcing the e-gambling ban would unfairly deputize the U.S. financial firms responsible for implementing the rules. The proposed rules, which were released earlier this fall by the Treasury Department and the Federal Reserve Board, would make people at financial firms with direct customer relationships responsible for ensuring that unlawful transactions do not occur.
Professional poker player Howard Lederer said it is particularly problematic that payment processors would bear that responsibility when the federal government has not yet adequately defined unlawful activity. The result, he said, will be that banks will "over-block" transactions to avoid potential violations.
Kenneth Adams, a partner in the Washington office of Dickstein Shapiro, predicted that the over-blocking issue would spark litigation.
The Interactive Media Entertainment and Gaming Association already has sued to keep regulators from enforcing the new law. Oral arguments in the case were heard earlier this fall. Adams said that court efforts to overturn the act are unlikely to succeed and that there are more useful ways for the law's critics to attack right now.
"The odds are worse than drawing an inside straight," he said.
House Financial Services Committee Chairman Barney Frank, D-Mass, has introduced a bill to permit and regulate online gambling rather than ban it. Rep. Robert Wexler, D-Fla., also has authored a measure to classify poker, the Chinese game mahjong, bridge, chess and other pastimes as "games of skill" that could be played online.
The panel has acknowledged, however, that generating the political will for Congress to rethink the issue will be difficult. The House passed the anti-gambling measure last year by a strong margin, and the Senate attached language to an unrelated port security bill that became law.
Harvard University law professor Charles Nesson, founder of the school's Berkman Center for Internet and Society, said he heard from an industry official who visited this week with Rep. Jane Harman, D-Calif., one of his former students. Nesson said she reportedly is unwilling to fight the e-gambling ban because so many of her constituents morally oppose gambling.
Pappas said part of the challenge will involve convincing people that it is a "pro-good-government" issue, not a "pro-gambling issue." He said the alliance is planning to conduct a voter-registration drive next year so poker enthusiasts and other supporters of online gambling can better flex their collective political muscle.
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Cyber Security
U.S. Is Unprepared For A Cyber Attack, GAO Says
by Winter Casey
The United States is not prepared to recover from a major Internet disruption, according to a new Government Accountability Office report, but the Department of Homeland Security has made some improvements.
The report, released Tuesday at a House Oversight and Government Reform subcommittee hearing, updated progress since GAO's 2006 recommendations on steps the department should take to develop a public-private plan for Internet recovery.
Greg Wilshusen, director of information security issues at GAO, said Homeland Security has been hobbled by a lack of consensus on its role, legal issues that could make it a challenge to provide assistance to restore Internet service, and the reluctance of the private sector to share information on Internet disruptions.
"The private sector doesn't trust government and views DHS as an entity lacking effective leadership," Wilshusen said.
Wilshusen said the fact that the department now has a cyber-security coordinator with the hiring of Assistant Secretary Greg Garcia is progress, but it is "still hampered by the inability to retain people." Wilshusen noted that the director of the national cyber-security division has left.
Garcia reassured the committee that Homeland Security is trying to fill various vacancies.
Wilshusen said the department has revised coordination plans with stakeholders. But he said there still is not a finalized recovery plan that details the interdependencies among its various initiatives and working groups.
The department "has not developed a public-private plan for Internet recovery, nor has it set a date to do that," Wilshusen told the committee.
Garcia, meanwhile, tried to diffuse some of the past criticism, saying both the government and private sector are now working together and "taking proactive responses" to prepare for an Internet disruption that is either intentional or because of a disaster.
He said the growing number of incident reports and the amount of investment in security are signs of progress, but he added that adversaries are growing more sophisticated. "It's an ongoing technical chess match, if you will," Garcia said.
Garcia said Homeland Security has scheduled another "Cyberstorm" exercise in March to test the department's plans. He said the department also aims to improve communication by locating the U.S. Computer Emergency Response Team, or US-CERT, within the National Coordinating Center for Telecommunications. He said both operational response centers provide detection and warning services for Internet disruptions around the world.
Garcia said that when Estonia faced a national cyber attack in July, US-CERT provided information on remote "botnets" originating from 21 NATO countries and contacted U.S.-based Internet service providers to share information on addresses launching the attacks.
Garcia also noted the department's "Einstein" program. It has reduced the time it takes to gather and share critical data on cyber threats and attacks facing federal networks, he said, adding that it now takes hours rather than days. He acknowledged in his written statement criticism from GAO that Einstein has not been implemented across the government.
Garcia said it is deployed in 13 federal agencies. The Office of Cybersecurity and Communications is trying to get agreements with other agencies to participate.
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Today's Feature:
International Roundup
President Bush on Monday said he would like the United States to fund a new security cooperation initiative with Central American countries aimed at using technologies to combat the threats of drug-trafficking, transnational crime and terrorism in the Western Hemisphere.
Every Wednesday, read the International Roundup by Winter Casey.
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E-briefs
E-Government: Health information technology got a lift from Congress on Wednesday, when the House Science and Technology Committee moved a bill authorizing the National Institute of Standards and Technology to boost activities supporting the coordination of e-record exchanges. There is "general consensus" that the benefit of such exchanges would be "lower cost and improved patient care," said panel Chairman Bart Gordon, D-Tenn. But in a world of electronic information, acceptance "can only be resolved through the development of technical standards" that do not currently exist. "To me, NIST is the obvious federal agency to promote the development of these standards," Barton said in explaining the bill, H.R. 2406. Separately, in response to the recent Utah mine disaster, the committee approved legislation, H.R. 3877, that would require NIST to promote research, development and demonstrations of tracking and communications systems for miners.
Budget: The American Association of Law Libraries, which is concerned that digitization efforts at the Library of Congress will not be funded adequately, recommended Wednesday that Congress provide the Law Library of Congress with its own funding. The association is "very supportive of the Law Library's efforts to work with Google to digitize the entire collection of congressional hearings and make them available to the public free of charge," association President Ann Fessenden said at a House hearing. But the association is "very concerned that, historically, the Law Library's services, collections, facilities and digital projects have not been sustained with adequate budgets or staffing." Law libraries worldwide and the Supreme Court rely on the law collections, both print and digital, on a daily basis, she added. A separate line item in the budget would place the Law Library on par with the Congressional Research Service and the U.S. Copyright Office, both of which belong to the Library of Congress.
Antitrust: Microsoft on Wednesday withdrew its two remaining legal challenges to a European Union antitrust order and now says it will obey the order. AP reports that the world's largest software maker yielded to EU regulators Monday when Microsoft promised to obey key parts of a 2004 ruling upheld by an appeals court last month. The company then told the EU appeals court that it is withdrawing an appeal against the $357 million fine that regulators imposed in July 2006 for Microsoft not making its Windows computer-operating system easily compatible with products from IBM, Novell, Oracle and Sun Microsystems. Microsoft said it paid the fine in October 2006. It also dropped a second appeal of an order that Microsoft license its intellectual property to "open source" systems such as Linux. The company said that issue is moot following a deal announced Monday for open-source developers.
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