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Sen. Ron Wyden

Senate Committee Passes PROTECT IP Act But Wyden Issues Quick Halt

in Congress/Copyright/Intellectual Property/Senate by

WASHINGTON May 27, 2011 – The Senate Judiciary Committee unanimously approved the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, or PROTECT IP Act on Thursday, but Sen. Ron Wyden (D-OR) put a hold on the bill preventing it from going to the full Senate.

“Increased online theft of intellectual property has become a rampant problem,” said Sen. Chuck Grassley (R-IA). “The impact of copyright piracy and sale of counterfeit goods imposes a huge cost on the American economy – lost jobs, lost sales, and lost income. This bill will help to protect against harmful counterfeit and pirated products that cause damage to both the economy and the health and safety of the consumer.”

The PROTECT IP Act bears a striking similarity to the Combating Online Infringement and Counterfeits Act (COICA), which Sen. Patrick Leahy (D-VT) introduced last year. COICO would have allowed the Attorney General to bring legal action and create a blacklist of rogue websites.

The PROTECT IP Act includes a provision that would provide a narrow definition of what infringing activities that the Justice Department would use to identify rogue sites. It would also give the Attorney General authority to bring action – including seeking financial restitution – against those sites. Rights holders would be eligible to sue rogue websites for copyright infringements.

The act would also protect domain registrars, payment processors, and advertising networks from prosecution for providing services to the rogue websites until a cease and desist order was issued by the courts.

A broad coalition of 170 trade groups and businesses such as Nike, Ford, Estee Lauder, the Motion Picture Association of America, and the National Basketball Association sent a letter of support to the committee.

“Many of these sites pose as legitimate businesses, luring consumers with sophisticated and well-designed websites. But, in reality, the counterfeit and pirated products these sites distribute are often of poor quality, harmful, and promote fraud. The PROTECT IP Act is a major step to make the Internet safer and protect consumers from the dangers of rogue sites in the online marketplace,” the letter read in part.

Public interest group Public Knowledge opposed the bill calling it “over reaching.”

“The bill as written can still allow actions against sites that aren’t infringing on copyright if the site is seen to ‘enable or facilitate’ infringement — a definition that is far too broad,” said Sherwin Siy, deputy legal director.

Several large corporations such as Google, Yahoo!, Ebay, American Express and Paypal have all opposed the bill. At an earlier hearing on the act, Google opposed the act saying that it will have very negative ramifications.

“Defining what is a rogue site is not a simple task. Technology advances often lead to evolving areas of copyright law, as courts sort out the application of common law doctrines to new technologies.  An overbroad definition of a rogue site could easily ensnare millions of popular U.S. websites that allow users to sell goods or upload content,” said Kent Walker, Senior Vice President and General Counsel at Google.

Hours after the bill passed the committee Wyden put a hold on the bill, just as he did on COICA last year.

“I understand and agree with the goal of the legislation, to protect intellectual property and combat commerce in counterfeit goods, but I am not willing to muzzle speech and stifle innovation and economic growth to achieve this objective,” Wyden said in a statement. “At the expense of legitimate commerce, [the PROTECT IP Act]’s prescription takes an overreaching approach to policing the Internet when a more balanced and targeted approach would be more effective. The collateral damage of this approach is speech, innovation and the very integrity of the Internet.”

Congressional Members Discuss Net Neutrality, Privacy and Spectrum at CCIA Meeting

in Congress/FCC/Net Neutrality/Patents/Privacy/Spectrum/Wireless by

WASHINGTON May 5, 2011- At the Washington Caucus meeting of the Computer and Communications Industry Association Wednesday, Congressional leaders presented their views on preserving the Open Internet, expanding patent reform, ensuring consumer privacy online and the need for spectrum reform.

“As the Internet becomes an increasing source of commerce and communication we cannot allow it to become a walled garden,” said Sen. Ron Wyden (D-OR), Chair of the Subcommittee on International Trade, Customs and Global Competitiveness. “While it is unknown how many jobs the open Internet creates, it is clear without an open Internet it will become very difficult for businesses to sell their goods and provide services.”

Wyden stated that the best way to protect consumers and ensure an open internet was through anti-trust laws, Rep. Bob Goodlatte (R-VA), Chair of the Subcommittee on Intellectual Property, Competition and the Internet, echoed this sentiment. Goodlatte expressed that he feels the Federal Communications Commission should not be regulating the issue.

Rep. Anna Eshoo (D-CA), ranking member of the Communications and Technology subcommittee, also supported the open internet and said that the FCC had the authority to act to protect consumers. She then called the debate of the joint resolution condemning the FCC on the floor of the House while the budget was not yet resolved “a royal waste of time.”

Rather than discuss the merits of the issue, the Republicans used the resolution to condemn the FCC, said Eshoo.

Wyden also implored the Obama administration to follow the lead set by Secretary of State Hillary Clinton and expand Internet freedom. While he noted the importance of consumer protection and the need to remove malicious websites, Wyden said he fears that the indiscriminant taking down of websites sends a bad message to other nations.

“Foreign nations will see our domain seizures as approval of limiting Internet communications,” Wyden said. “If we continue with this practice it won’t be long before other nations follow suit.”

“As Americans we deeply care about our privacy and do not want it invaded by business or government,” Eshoo said. “However we also do not want to kill off any innovation which can come from new devices and services. We need to educate the public about what information is being collected and who is collecting it.”

On the tail of several recent statements from Rep. Ed Markey (D-MD) expressing concerns about how Apple tracks its customers with the iPhone, Eshoo predicted that Congressional hearings will likely be held on the issue.

Goodlatte called upon industry to change their privacy settings from the current model that requires users to opt out of the collection of data to an opt in model in which users would choose to provide their data to companies.

“We must preserve the trust of users on the Internet,” said National Telecommunications and Information Administration  Deputy Administrator Anna Gomez. “Consumer groups and industry have both asked us to explore the issue and we plan to release an update to our green paper soon.”

The green paper advocates that Congress pass legislation that would provide a base set of consumer protections that the Federal Trade Commission would be able to enforce.

Wyden also called upon Congress to protect the rights of innovators through expanding patent reform and previewed the soon-to-be-introduced Digital Trade and Promotion Act, which will include digital goods in future trade agreements.

Goodlatte informed the group that there is currently patent reform legislation, which has bipartisan support, being brought to the floor of the House.

“Patent reform is an issue which has support from both sides and is key to expanding our economy,” Goodlatte said.

All of the Congressional speakers supported the idea of providing the FCC with the authority to conduct incentive auctions to obtain additional spectrum and Gomez called spectrum a key pillar in the nation’s digital infrastructure.

To expand the availability of spectrum for future use, Gomez said that spectrum owners need an incentive to release their holdings.

She went on to say that the federal government is looking at ways it can relocate its current spectrum holdings, but relocation will take time.

“We also need to seriously work on the development of a national public safety network,” Eschoo said. “It’s been 10 years since the attacks of 9/11 and we are nowhere near having a working network.”

Legislators Introduce Bills To Restrict State Wireless Taxes

in Congress/House of Representatives/Mobile Broadband/Senate/Wireless by

WASHINGTON, March 11, 2011 – Legislators in the House and Senate introduced companion bills that would prohibit states from levying new taxes specific to wireless services in an effort to keep barriers to access for mobile internet services low.

The Wireless Tax Fairness Act would impose a five-year moratorium on new discriminatory taxes on wireless services.   The bills garnered bipartisan support in both the House and the Senate. Sen. Ron Wyden (D-OR) and Sen. Olympia Snowe (R-ME) introduced the Senate version, while Rep. Trent Franks (R-AZ) and Rep. Zoe Lofgren (D-CA) introduced the bill to the House.

In a statement Thursday, the legislators expressed concern that with the growth in wireless services, the majority of states have imposed taxes on those services that exceed local sales tax rates.  Some cash-strapped states have even imposed wireless taxes at rates that exceed those on luxury and vice goods and services.  Those higher taxes -which on average more than double those of other goods and services –  will raise the cost to consumers and create disincentives for companies to invest in wireless technologies, say the lawmakers.

“Our policies should be encouraging new innovations in these technologies not holding them back,” said Sen. Wyden through the statement. “Without action, states and local governments may tack wireless services with so many taxes that innovation and deployment of new technology and investment are simply not lucrative.”

The introduction of the bills drew the approval of the wireless industry as well.

“The Wireless Tax Fairness Act and its five-year ‘timeout’ on new, discriminatory taxes would protect customers from new financial burdens that discourage their use of the wireless technologies that are so integral to our lives,” said Peter Davidson, Verizon senior vice president of federal government relations. “In this fragile economic recovery, now is not the time to impose new taxes that will make mobile broadband connections less affordable for consumers, stifle e-commerce and hinder high-tech innovation.”

Sen. Hutchison Seeks to Block Open Internet Regulation

in FCC/Net Neutrality by

WASHINGTON, December 20, 2010 -Texas Republican Kay Bailey Hutchison has introduced an amendment to block the Federal Communications Commission from implementing any open internet regulations. The amendment would be added to the appropriations bill (H.R. 3082), which provides funding for the departments of Defense and Veterans Affairs.

The amendment prohibits the FCC from adopting or implementing any open internet rules, protocols or standards. It also prevents any “rules, protocols, or standards regulating the behavior of broadband Internet access service providers with respect to discrimination of broadband traffic, network management practices, managed services, specialized services, or paid prioritization.”

“The FCC chairman’s attempt to impose new government regulations on the internet is unnecessary government overreach that will stifle future innovation,” said Hutchison. The amendment is being co-sponsored by Republican Sens. Tom Coburn of Oklahoma, John Cornyn of Texas, Jim DeMint of South Carolina, John Ensign of Nevada, Johnny Isaakson of Georgia, John Thune of South Dakota, and Roger Wicker of MIssissippi.

Senate support for the open internet proceedings has been mixed. With Democratic Sens. John Kerry of Massachusetts, Byron Dorgan of North Dakota, and Ron Wyden of Oregon urging the chairman to act to protect the open internet. “We have supported that process and support the President’s goal of protecting and preserving an open Internet. We are also well aware that it is always easier to criticize the policy-making process than it is to make good policy – and as a result you have taken incoming fire from all sides,” the wrote to the chairman.

Sen. Al Franken (D-Minn.) supports an open internet but opposes the current proposal since he says it does not go far enough to protect consumers. “If this order is adopted as drafted, it would be the first time in the commission’s history that it effectively legitimated blatantly discriminatory conduct on the Internet — against lawful applications, content, and devices,” Franken said.

Meanwhile, Federal Trade Commission Chairman Jon Leibowitz said in an interview with the Huffington Post that he supports the proposal which FCC Chairman Julius Genachowski has laid out. “There’s a little disconnect between the reality of net neutrality and the big fight of net neutrality,” said Leibowitz.

A History of Network Neutrality

in Broadband's Impact/FCC/Net Neutrality by

WASHINGTON, October 11, 2010 – The issue of network neutrality is one that has become an increasing problem around the globe. In the United States, the problem became more of an issue with the rise of cable and DSL service.

With the decreasing level of competition among internet service providers and the increasing number of violations of network neutrality, the issue has garnered increasing importance. While Congress has attempted to protect consumers, it has failed. Private industry firms has already begun to adopt rules that they claim will protect consumers but avoid critical issues. The Federal Communications Commission has supported the issue but has yet to formally codify any protections.

In order to understand the importance of network neutrality one must first understand its principles. While there are many variants of the definition, they all agree on some basic points: users should be able to connect to any device they wish. They should be able to run any legal application they want to. They should not have their service degraded based upon usage.

Columbia University Professor Tim Wu, who wrote about the subject in 2003, has said, “Network neutrality is best defined as a network design principle. The idea is that a maximally useful public information network aspires to treat all content, sites, and platforms equally.” For consumers, this means that they are able to use their internet connection for any purpose they see fit.

There have been two major violations of these principles. In 2004, Madison River Communications blocked the voice-over-IP (voice over internet protocol, or VoIP) service Vonage over its DSL connections. In 2007, Comcast was accused of slowing down the cable connections of customers who used BitTorrent, a file-sharing application.

The Madison River violation was resolved when the FCC intervened, and Madison River agreed to pay a fine and stop blocking access. The FCC consent decree states :“On February 11, 2005, the bureau issued a Letter of Inquiry (LOI) to Madison River, initiating an investigation. Specifically, the bureau inquired about allegations that Madison River was blocking ports used for VoIP applications, thereby affecting customers’ ability to use VoIP through one or more VoIP service providers.” In order to avoid future costs associated with litigation Madison River settled and paid the fine.

The Comcast case went to the courts when the ISP claimed that the FCC did not have the authority to stop them from blocking BitTorrent. In April 2010, the Comcast case went before the D.C. Circuit Court which held that the FCC exceeded its authority in pursuing Comcast.

Shortly after this ruling, the FCC issued a notice of inquiry in May that proposed changing the classification of broadband from a Title I service to a more heavily-regulated Title II service, but it also included a new proposal which the FCC chairman called the Third Way. This Third Way was a hybrid of Title I and Title II regulations. The Third Way gained a support from a wide range of stakeholders including some ISPs and consumer protection advocates. Democratic Sens. John Kerry of Massachusetts, Maria Cantwell of Washington, Ron Wyden of Oregon and Tom Udall of New Mexico all sent letters in support.

In June, a group of ISPs and technology companies announced the creation of the Broadband Internet Technical Advisory Group (BITAG or TAG) which would help advise and mitigate the problems of network neutrality. The organization had a wide membership including AT&T, Cisco Systems, Comcast, DISH Network, EchoStar, Google, Intel, Level 3 Communications, Microsoft, Time Warner Cable and Verizon. While many saw this as a positive step, the organization has yet to propose any solutions.

While the notice of inquiry was receiving responses, news that the FCC began to hold closed-door meetings with major stakeholders on the issue of network neutrality created an uproar. Many consumer protection advocates opposed these secret meetings, and they were stopped.

In August, Google and Verizon announced a joint policy statement in which they outlined their own network neutrality principles. Their statement said in part: “Users should choose what content, applications, or devices they use, since openness has been central to the explosive innovation that has made the internet a transformative medium.” They however specifically left out wireless since they said it was too new of a market to require consumer protection. Their omission sparked an outcry from consumers groups and others who said consumers’ increasing use of wireless devices showed that wireless is the wave of the future and should be watched closely to better benefit consumers.

During this period, many called upon Congress to act, claiming that the FCC did not have the necessary authority to reclassify broadband even if it wanted to. The commissioner supported this and stated numerous times that he was willing to work with Congress to find a suitable solution. Rep. Henry Waxman, the chair of the House Energy and Commerce Committee, proposed legislation that would codify many of the FCC’s principles and also included language which would require ISPs to disclose accurate speed and pricing information. The Waxman bill also included wireless along with wireline which was further than the FCC’s original plans. Waxman was unable to get the bill passed through his committee due to Republican opposition.

The future of network neutrality remains unclear. However, whatever direction it takes in the policy, business or consumer arenas will affect the growth of the internet for years to come.

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