May 2010

Add House Judiciary Chairman John Conyers, D-Mich., to the list of lawmakers concerned with Google's revelations that it mistakenly collected information from private unsecured Wi-Fi networks and with Facebook's privacy policies.

Conyers wrote Google CEO Eric Schmidt Friday about the Wi-Fi controversy. Google revealed earlier this month that vehicles that collected images for Google's Street View service also mistakenly collected information from unsecured home Wi-Fi networks.

Citing the need for those federal agencies examining the issue to have access to all the relevant data, Conyers told Schmidt to retain any of the data Google has collected from the Wi-Fi networks and records related to such information. FTC Chairman Jon Leibowitz has said his agency is taking a close look at the controversy.

Noting concerns that Facebook may be sharing data with third parties, Conyers also wrote to Facebook CEO Mark Zuckerberg and asked him to provide information about whom the firm has shared Facebook user information with and whether new privacy changes announced earlier this week will restrict access to such information. Facebook has staunchly denied that it has shared user information with third parties without user consent.

"Companies such as Facebook and Google provide innovative services that enrich and expand the constantly evolving Internet," Conyers said in a news release. "I want to ensure that privacy concerns are as paramount as creativity to these and all Internet companies, and I look forward to hearing about ways they can ensure this is the case."

Conyers said his committee is considering holding hearings and crafting legislation related to communications privacy issues and online security.

The House Friday voted to pass a twice-stymied bill that would reauthorize research and education programs at key federal science agencies in an effort to boost U.S. competitiveness.

The bill, which passed 262-150, would authorize $85.6 billion in spending over five years. Seventeen Republicans joined Democrats in approving the measure, which included a GOP-pushed provision to bar funds in the bill from going to salaries of federal workers "officially disciplined" for viewing pornography on their work computers.

The vote represented the third effort this month by Democrats, led by House Science and Technology Chairman Bart Gordon, D-Tenn., to pass the bill, known as the America COMPETES Reauthorization Act.

Friday's winning floor-vote strategy by Democrats involved letting members first cast votes on nine portions of a GOP-sponsored motion to recommit that the House passed earlier this month, which prompted House leaders to pull the bill. The motion would have only authorized the bill's programs for three years instead of five and would have cut new programs proposed in the bill.

Only two of the nine provisions were adopted. They included the provision that would prohibit funds going to federal workers disciplined for viewing pornography, and another provision would bar funds in the bill from going to colleges or universities that are prevented from receiving federal grants and contracts because they deny or restrict ROTC or other military recruiting on campus.

"I am disappointed that my Democratic colleagues resorted to using a procedural tactic to defeat Republican changes that would have saved over $40 billion and restored the original COMPETES priority of basic research," Science and Technology ranking member Ralph Hall, R-Texas, said in a statement.

Gordon, however, said that he agrees "we must address the challenges presented by our deficits, but we must also invest in our country's future." He added that, "If we are to reverse the trend of the last 20 years, where our country's technology edge in the world has diminished, we must make the investments necessary today."

A second attempt to pass the bill failed last week when it was brought to a vote under the House's suspension process, which requires two-thirds support for passage, and it fell short, 261-148. Friday's vote required only a simple majority for passage.

If cloud computing is going to continue to grow and provide the cost savings and technology benefits its backers tout, Congress must move to update two key laws adopted in the 1980s governing communications law, Microsoft Vice President and General Counsel Brad Smith said this week.

Microsoft is part of a coalition that is pushing Congress to update the Electronic Communications Privacy Act, which governs government access to electronic communications. But Smith says lawmakers must also update the 1986 Computer Fraud and Abuse Act, the federal law that addresses computer-related crimes such as hacking. Smith says updating both laws will help provide greater legal certainty related to cloud computing.

The House Judiciary subcommittee held a hearing earlier this month on ECPA and Senate Judiciary Chairman Patrick Leahy, D-Vt., has also indicated that he plans to re-examine the 1986 law.

"This is only the beginning of a dialogue that must go on to include the input of, among others, law enforcement at the federal, state and local level, private industry stakeholders across the complex network of networks that is modern communications, and academic experts on technology, privacy and Fourth Amendment issues," Judiciary Constitution Subcommittee Chairman Jerrold Nadler, D-N.Y., said at the May 5th hearing.

While lawmakers, industry, public interest groups and others debate how to update ECPA, there has been little discussion of also updating the CFAA.

In an interview following his speech to the Gov 2.0 Expo this week, Smith noted one area that an update of CFAA could address is the ability of cloud service providers to sue those who may attack data stored by an indivdual in the cloud operated by a third party. He said under current law, the company that is actually storing the data, would not be able to bring a lawsuit under CFAA if an individual's e-mail account was hacked. "The law doesn't give the data center legal standing to bring a lawsuit," Smith said. "This is a clear opportunity to amend the law."

Another area that a CFAA update could address is the $5,000 damage threshold under current law. He said changes to this provision might address losses of digitial photos or other items that might be hard to put a monetary value on but still are valuable to the owner.

During a Senate Judiciary hearing late last year on legal issues related to cyber attacks, at least one witness also cited the need to update the CFAA.

"I do not believe that the Computer Fraud and Abuse Act, even as amended by the PATRIOT Act, is yet sufficient to address certain critical issues," Larry Wortzel, vice chairman of the U.S.-China Economic and Security Review Commission, said in written testimony in November. "This includes the right of private response to computer penetrations, such as cyber counterattacks, by our government or private individuals or companies in retaliation for cyber intrusions."

Smith said he thinks its unlikely Congress will take up legislation updating ECPA this year. He said, however, that he believes stakeholders will work this year on identifying problems with the law and possible solutions with the hope of moving a measure through Congress next year.

More than half of Congress now opposes FCC Chairman Julius Genachowski's plan to shift broadband from light to heavy regulation, with 171 Republican House members expressing opposition Friday in a letter to the agency chief.

"The FCC concluded on a number of occasions, under both Democrat- and Republican-led commissions, that broadband is not a [heavily regulated] telecommunications service," according to the letter, whose signatories include House Energy and Commerce ranking member Joe Barton, R-Texas, and Communications Subcommittee Chairman Cliff Stearns, R-Fla.

After a federal appeals court recently undermined the agency's jurisdiction over broadband, Genachowski said reclassifying it as a telecommunications service was necessary to restore the FCC's authority. Seventy-five Democrats, including former House Energy and Commerce Chairman John Dingell, D-Mich., disagree, along with 37 Senate Republicans, House Minority Leader John Boehner, R-Ohio, and Minority Whip Eric Cantor, R-Va., for a total of 285 out of 535 members.

The FCC announced Thursday that its June 17 public meeting would feature action on a proposal to gather additional information on the best framework for regulating broadband.

Some Web site performance consultants and civil liberties advocates are at odds over the best way to protect user privacy, should the White House decide to lift a decade-old ban on Web-tracking devices for federal sites, Nextgov.com reported.

The Office of Management and Budget is still revising a 2000 policy that forbids such devices, including cookies, on federal Web sites after soliciting public and agency comment last summer, OMB officials said this week. Cookies are applications that monitor visitors' navigation habits, such as pages they frequently visit or passwords they enter, so developers can update and enhance a Web site in accordance with their preferences.

OMB instituted the cookie prohibition to alleviate privacy concerns, but a decade later, as technology has advanced, even some privacy advocates recognize the benefits of analyzing Web site traffic and want the ban lifted, with stipulations. OMB is expected to relax the ban between now and the end of June, after conferring with agencies further.

One stipulation the Center for Democracy and Technology recommended during talks with OMB in recent weeks is that federal Web sites should be required to let individuals opt out of having information about their online activities collected. On Tuesday, the center said Google had set an example for federal agencies earlier that day by adding a privacy option to the company's traffic analysis service.

The service -- Google Analytics -- helps Web site owners aggregate and measure general trends on a Web site, such as number of visitors and average time spent on one page. Google's opt-out approach gives people the opportunity to download an application that will stop data from being collected by Google Analytics when they visit a Web site that is using the service to measure traffic. To read more, click here.

Former House Energy and Commerce Chairman John Dingell, D-Mich., became the 75th House Democrat today to oppose FCC Chairman Julius Genachowski's plan to subject broadband providers to tougher regulation.

"I have strong reservations about the course the commission is presently taking," he said in a Thursday letter to the agency chief. Dingell said he's worried that Genachowski's proposal would be struck down in court, puts at risk "significant" past and future investments and could even "paralyze" other regulatory initiatives.

On Monday, 74 Democrats, including some House Commerce members, wrote Genachowski to express opposition to the proposal, which already has drawn fierce resistance from major communications companies and Republicans.

Dingell's move drew praise from telecom providers. "When the Dean of the House and leading congressional oversight expert expresses doubt about both the wisdom and legality of an agency's course, the message is clear: It's time to change course," U.S. Telecom Association President and CEO Walter McCormick said in a statement.

Genachowski took action after a federal appeals court issued a decision that effectively gutted the agency's ability to regulate broadband. In a sign the FCC is caving to the pressure, the commission announced late today that its June 17 public meeting would feature a vote on a new inquiry designed to gather information on "possible legal frameworks" for regulating broadband.

A federal judge in Oregon has slapped a restraining order on Google, barring the Internet firm from destroying data it says its Street View cars mistakenly collected from private Wi-Fi networks.

The judge's order, filed earlier this week, requires Google to turn over two copies of the hard drive containing the data collected from home Wi-Fi networks. The order stems from a class action lawsuit filed by citizens who claim their privacy was violated by Google's collection of data from their unsecured home Wi-Fi networks.

Google has come under fire on Capitol Hill over the incident. Key lawmakers on the House Energy and Commerce leaders have called on the FTC to probe matter, while the Electronic Privacy Information Center has urged the FCC to investigate whether Google has violated the Wiretap Act or other applicable laws.

A Google spokesman said Wednesday in response to a letter sent to Google CEO Eric Schmidt from Energy and Commerce leaders seeking answers to the incident, "As we have said before, this was a mistake. Google did nothing illegal and we look forward to answering questions from these congressional leaders."

Leaders of online education gathered Thursday to discuss the role that virtual learning must play in our nation's future, saying brick-and-mortar classrooms won't become obsolete but will be complemented by blended and virtual learning models.

"We [the United States] were great at creating human capital but the rest of the world is catching up," said Paul Peterson, executive editor at Education Next during a forum at the Heritage Foundation. According to Peterson, virtual learning will allow for the personalization of education and save costs.

Across the country, virtual education is growing at 30 percent annually, said Susan Patrick, president of the International Association for K-12 Online Learning. The majority of the online learning sector is managed privately, but Florida Virtual Schools, founded in 1997, is run by the state. In the 2008-2009 school year, more than 71,000 students enrolled in Florida virtual program.

Despite its promise, the panelists said they don't' expect a rapid expansion of virtual learning in the public sector. They say this is due in large part to what they see as unfriendly state and local policies.

"What we have in education is a government monopoly," said Adam Schaeffer, a policy analyst at the libertarian think tank, the Cato Institute. Schaeffer argued that more involvement by the private sector is essential for virual education to grow.

White House Cybersecurity Coordinator Howard Schmidt is expected to name Sameer Bhalotra his deputy cybersecurity coordinator soon, Nextgov.com reported.

According to sources, Bhalotra, a professional staffer on the Senate Intelligence Committee, sent out notes last night informing people of his move to the White House. Bhalotra has gained deep respect within the ranks of cybersecurity circles as a strong cyber adviser.

"It's a shame to see Sameer leave the Hill and SSCI, but this is a real coup for Howard Schmidt," said James Lewis, a cybersecurity expert and senior fellow at the Washington-based Center for Strategic and International Studies.

Bhalotra has conducted deeply classified work and worked extensively on the Senate cyber budget. As the key cyber staffer on the Senate Intelligence Committee since 2007, he's been responsible for the entire cyber budget for the last several years. He also was a member of the Commission on the Cybersecurity for the 44th Presidency.

Perhaps more importantly, he's well trusted in Congress, and sources say Republicans and Democrats alike are big fans. Adding Bhalotra to Schmidt's team is enough reason for Congress to make the White House Network Operations Center (NOC) a permanent federal office, according to SANS' Director of Research Alan Paller.

A bill from Rep. Diane E. Watson, D-Calif., introduced in March, would do to just that, and other legislative attempts to update FISMA also are expected to propose similar measures. To read more, click here.

Wireless operators came under more pressure from some lawmakers Thursday for the fees they charge customers for breaking their wireless phone contracts.

In a letter to FCC Chairman Julius Genachowski, Sen. Ron Wyden, D-Ore., called on the commission to launch an investigation into these early termination fees (ETFs) charged by wireless carriers to determine what costs they are trying to offset with the fees.

AT&T came under fire last week from Sen. Amy Klobuchar, D-Minn., after the wireless firm announced it was raising its ETFs for some of its smart phones. The fee will nearly double on June 1 from $175 to $325 for some of the most advanced devices such as the iPhone and Blackberry Bold. Klobuchar introduced a bill late last year that would place restrictions on ETFs.

An AT&T spokesman said the fees help offset the deep discounts that his company and others offer for high-end handsets such as the iPhone. He also noted that while it did boost its ETFs for some smart phones it also lowered the fees on some less-advanced phones from $175 to $150.

But Wyden dismissed such claims and pointed to Verizon Wireless' response to questions posed by the FCC last year about ETFs. He noted that the fees do not seem to be linked directly to the cost of the devices. "Given Verizon Wireless' response to the FCC's 2009 inquiry regarding ETF structures for 'advanced devices,' it appears that the cost of these termination fees are based on much more than recouping the wholesale cost or retail value of the wireless device," Wyden wrote, adding that Verizon's response indicate that the fees also are aimed at recouping costs and risks of providing service including advertising, commissions, store costs and network costs.

He asked the FCC to examine the extent to which monthly service charges for voice and data communications are set to help pay the costs of wireless devices for all subscribers and whether any national providers have reduced their monthly fees once they have recouped the cost of a handset.

"It is hard to see how consumers and competition can drive innovation in the marketplace when consumers must choose their wireless carrier based upon the devices they offer, and must stay with a sub-optimal carrier in order to avoid exorbitant exit fees," Wyden wrote.

From this morning's Earlybird:

• "A House Homeland Security panel Wednesday struggled with how to curb the recruitment of terrorists on the Internet while still protecting freedom of speech," CongressDailyAM (subscription) reports.

One in six users say they have experienced "bill shock" from unexpectedly high mobile phone bills, according to a new FCC survey released Wednesday.

Of those who experienced bill shock, 84 percent said their cell phone providers did not contact them when they were about to exceed their allowed minutes, text messages, or data downloads. The survey found that 88 percent said their carrier did not notify them after their bill increased suddenly. More than a third reported bill hikes of $50, while 23 percent experienced jumps of $100 or more.

The survey also examined early termination fees (ETFs) imposed by cell phone service providers for breaking contracts early. It found half of those who have cell phone plans with ETFs don't know how much they would have to pay if they broke their contracts, while two-thirds of broadband users with ETFs say they don't know how much they would owe for breaking their contracts.

"One reason for the confusion is billing practices: Only 36 percent of cell phone customers who are familiar with their bills said that they include 'very clear' information on ETFs," the FCC said in a news release. Still, 43 percent of cell phone customers said ETFs were a major reason they would stay with their current service, the FCC said in a news release. The survey interviewed 3,005 U.S. adults April 19-May 2, with a subsample of 2,463 respondents who have personal cell phones. It had a margin of error of 2 percentage points.

Joel Gurin, chief of the FCC's Consumer and Governmental Affairs Bureau, said the survey findings support an effort the FCC launched earlier this month seeking public input on ways to alert consumers about potential high charges before they add up. Among the ideas the FCC is weighing to address bill shock is a technical solution similar to one mandated by the Europe Union to alert consumers so they can avoid the problem.

Sen. Amy Klobuchar, D-Minn., who sits on the Commerce Committee, said the survey underscores her call for action to protect consumers. She has introduced legislation that would restrict the use of ETFs by cell phone companies. "Like a rigged carnival game, wireless providers bury these fees in the fine print and slam consumers if they try to find better service or save a few bucks in their monthly bill," she said in a news release.

Cell phone operators say consumers benefit because they usually receive steep discounts on hand sets in exchange for signing a contract that includes an ETF and note that carriers offer a variety of plans some of which do not include ETFs.

"Unfortunately, the commission's release missed an opportunity to educate consumers. Nowhere mentioned in the documents is there any information for consumers about how they can better manage their wireless usage - information that is readily available from every carrier and that has been submitted to the commission by CTIA and carriers," Steve Largent, president of the wireless industry group CTIA, said in a statement. "Carriers go to great lengths to keep their customers satisfied and informed."

A decade ago, Google took over the World Wide Web. Now, the Internet behemoth wants to conquer something even bigger - Washington.

While President Obama already has Google CEO Eric Schmidt on speed dial, the California-based search giant is moving quickly to expand its influence in the capital in ways that are starting to bear fruit. Google increased the money it spends on lobbying in the first quarter by 57 percent over the previous year, paying $1.4 million to influence lawmakers and regulators, according to Consumer Watchdog, a nonpartisan, nonprofit public interest group that has been critical of Google's activities

Moreover, while Google's lobbying expenses for 2009 totaled $4.03 million, first-quarter spending this year jumped 23 percent, from the $1.12 million the company spent in the fourth quarter of 2009, according to the interest group. It's a far cry from the paltry $80,000 that Google spent lobbying the federal government just seven years ago, shortly after the tech bubble burst and Silicon Valley was forced to seek greater cooperation from the federal government.

The computer and Internet industry as a whole spent $38.8 million on federal lobbying in 1998. Two years later, at the height of the bubble, it spent $56 million. By contrast, in 2009, the industry spent nearly $120 million.

Along the way, Google has dramatically expanded its D.C. staff and government affairs operations. In 2009, the computer and Internet industry employed the third-most lobbyists of any industry -- only the pharmaceutical and education industries had more, according to the Center for Responsive Politics. Industry lobbyists outnumber members of Congress more than 2-to-1.

"We established a Washington presence because we felt like it was important to give our users a voice in Washington," Google spokeswoman Mistique Cano told the CRP recently. "Technology can be complicated. We absolutely believe taking the time to help people understand our business is a worthy investment. Technology is only going to become a bigger part of our lives and the economy."

Campaign finance experts said Google's activities represent the "next wave" of the computer industry's inevitable arrival as a Washington power player. "The computer industry, by virtue of its personality, has always wanted to keep Washington at arm's length," Sheila Krumholz, executive director of the Center for Responsive Politics, told me this week. "They've found they can't, so they have jumped in." To read more, click here.

An influential Democratic senator urged federal regulators today to only approve the proposed $30 billion merger of Comcast and NBC Universal if they determine that "sufficient conditions" are "unlikely to cause any substantial lessening of competition," CongressDaily reported.

At the very least, Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., said any approval should include extensive protections for competitors, consumers and independent programmers.

Kohl detailed his views in a letter to FCC Chairman Julius Genachowski and Assistant Attorney General Christine Varney. The lawmaker recommended 11 requirements, including the divestiture of NBC's stake in the online video site Hulu, a ban on Comcast shifting marquee NBC content to cable for a decade and restricting Comcast from blocking or degrading competing video services online.

Kohl weighed in after Congress held four hearings earlier this year on the merger and as lobbying over the transaction continues to intensify. The companies have said they're expecting a regulatory decision in the fourth quarter.

The senator was blunt in the six-page correspondence, warning that the proposed combination "has the potential for serious anti-competitive and anti-consumer effects." Any conditions "should be in the form of a legally binding and enforceable undertaking, either as part of an antitrust consent decree or a condition to the FCC's approval of the license transfer," he wrote.

Comcast Vice President of Government Communications Sena Fitzmaurice defended the merger as "pro-competitive, pro-consumer and in the public interest." She added, "We expect a thorough and [expeditious] regulatory review and that any conditions will not unduly burden either Comcast or NBCU's businesses." To read more, click here. (Subscription required)

Citing the recent attempt to detonate a car bomb in New York City's Times Square, Sens. Charles Schumer, D-N.Y., and John Cornyn, R-Texas, announced legislation Wednesday aimed at identifying the buyers and users of prepaid cell phones.

Their legislation would require buyers of prepaid cell phones to present identification and require phone companies to keep that information on file, similar to what they have to do with users of landline phones and subscription-based cell phones, according to Schumer and Cornyn.

"This proposal is overdue because for years, terrorists, drug kingpins and gang members have stayed one step ahead of the law by using prepaid phones that are hard to trace," Schumer said. "We caught a break in catching the Times Square terrorist, but usually a prepaid cell phone is a dead end for law enforcement. There's no reason why it should still be this easy for terror plotters to cover their tracks."

According to federal authorities, the suspect in the Times Square bombing attempt, Faisal Shahzad, used a prepaid cell phone to arrange to buy the Nissan Pathfinder that he tried to detonate. He also used the phone to make calls to Pakistan before the attempted attack, Schumer and Cornyn said.

They said federal authorities caught a break when they discovered that the cell phone number Shahzad used matched one that he provided to U.S. Customs officials when he re-entered the United States months earlier.

"In the U.S., laws requiring registration of prepaid cell phone users have been proposed in states including Texas, Massachusetts, Pennsylvania, Missouri, Georgia and South Carolina," Schumer and Cornyn said. But in light of the increased reliance of terrorists on the devices, the senators said Wednesday it was time for a federal response.

Facebook Wednesday announced changes to its privacy controls promised earlier in the week by the social networking site's embattled CEO Mark Zuckerberg, who has been criticized in the past for minimizing the importance of privacy to users.

Facebook has been come under fire in recent months for making changes that users, privacy advocates and some lawmakers say undermine user privacy.

Zuckerberg outlined the latest changes in a blog post in which he noted that users have told the firm that its privacy controls are too complicated. " We've always offered a lot of controls, but if you find them too hard to use then you won't feel like you have control," he said. "Unless you feel in control, then you won't be comfortable sharing and our service will be less useful for you."

The changes include providing Facebook users with a single control for all their content, which will allow them to select who can see the content they post to include "everyone," "friends of friends," or "just friends." The second major change involves reducing the amount of basic information that must be visible to everyone.

In addition, Facebook users will now have a simpler way to control which applications or Web sites can access user information. Currently, Facebook's partner sites can see information that users make available to everyone, but Facebook will now allow users to prevent such third-party sites from seeing user information.

"There have been a lot of changes over the years as we've continued to innovate, and I appreciate that you have all stuck with us," Zuckerberg said. "Each time we make a change we try to learn from past lessons, and each time we make new mistakes too."

Critics of Facebook's privacy policies praised the firm for attempting to fix its mistakes but said the social networking site still has more work to do.

The leaders of the House Energy and Commerce Committee are increasing pressure on Google to provide more information about data the Internet firm says it mistakenly collected from private Wi-Fi networks.

In a letter Wednesday to Google CEO Eric Schmidt, Energy and Commerce Chairman Henry Waxman, D-Calif., ranking member Joe Barton, R-Texas, and Rep. Edward Markey, D-Mass., a senior member of the panel, voiced concern about the incident and about Google's attempts to explain it.

Earlier this month, Google revealed that vehicles that snap photos for its Street View feature also scanned for wireless networks. In collecting the name and numerical address of such networks, this scanning software also "mistakenly" collected some personal information from unsecured home or business Wi-Fi networks, Google said.

"We are concerned that Google did not disclose until long after the fact that consumers' Internet use was being recorded, analyzed and perhaps profiled," the lawmakers wrote. "In addition, we are concerned about the completeness and accuracy of Google's public explanations about this matter."

They submitted a long list of questions for Schmidt and asked for a response by June 7. The questions included: What communities did Street View vehicles target for data collection from Wi-Fi networks? Were citizens in the affected communities notified about the data collection and offered a chance to consent to the practice? What is Google doing to ensure a similar incident doesn't happen again with new products and services?

Barton and Markey wrote FTC Chairman Jon Leibowitz last week seeking answers to similar questions as well as whether Google's actions might have broken any laws. Leibowitz told a Senate Appropriations panel last week that the FTC is taking a "very, very close look" at the Google Wi-Fi collection incident.

Google has acknowledged that the data collection was a mistake, that it was going to delete the data, has stopped Street View cars from collecting Wi-Fi data, has called for a third-party review of the software at issue, and pledged to cooperate with all the relevant agencies on the matter.

"As we have said before, this was a mistake. Google did nothing illegal and we look forward to answering questions from these congressional leaders," Google said in a statement Wednesday.

From this morning's Earlybird:

• "The Justice Department is examining Apple's tactics in the market for digital music, and its staff members have talked to major music labels and Internet music companies, according to several people briefed on the conversations," the New York Times reports.

Two key GOP lawmakers on the Senate Commerce Committee say the FCC should back off its plan to reclassify some aspects of broadband as a telecommunications service now that congressional Democrats have indicated they plan to craft legislation to amend the Communications Act.

The announcement Monday from Senate Commerce Chairman John (Jay) Rockefeller, D-W.Va., Senate Commerce Communications Subcommittee Chairman John Kerry, D-Mass., House Energy and Commerce Chairman Henry Waxman, D-Calif., and House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., comes in the wake of an appeals court ruling last month that undermined the FCC's authority over broadband.

FCC Chairman Julius Genachowski said the ruling has made it difficult for the commission to implement its national broadband plan, which is why he has sought to reclassify some aspects of broadband as a telecommunications service under Title II of the Communications Act.

But Senate Commerce ranking member Kay Bailey Hutchison, R-Texas, said in a statement Tuesday that "congressional action to update the Communications Act is a clear signal to Chairman Genachowski to stand down on his recently announced plans to reclassify broadband services. ... Congress is stepping in to address this issue because without our intervention, the FCC's proposed regulations could stifle future investment in broadband services. I look forward to being an active participant as we move forward on crafting a bipartisan update to the Communications Act."

Sen. John Ensign, R-Nev., the ranking member on the Commerce Communications Subcommittee, echoed this view. "With the chairmen clearly signaling their intent to revisit the Communications Act, the FCC should abandon its misguided attempt to upend settled and successful Internet policy by reclassifying broadband service as a common carrier," he said in a news release Tuesday.

The FCC Tuesday announced it was launching a notice of inquiry to take a "fresh look" at the current media ownership rules to ensure they promote the commission's goals of promoting competition, localism and diversity.

The FCC is seeking comment on such issues as whether the current rules foster the goals of competition, localism and diversity; how to define, measure and promote these goals; how the current rules affect these goals; and how to weigh these goals if they conflict with each other.

In late 2007, the commission, which was chaired at the time by Republican Kevin Martin, relaxed media ownership rules to allow broadcast outlets to merge with newspapers in the nation's 20 largest media markets.

"The commission is committed to fostering a strong and independent broadcast media that provides Americans with multiple and diverse sources of news, public affairs, and entertainment programming," FCC Chairman Julius Genachowski said in a statement.

In a separate statement, Commissioner Michael Copps, a Democrat, noted the consolidation that has occurred in the industry since 1996, pointing to a 39 percent reduction in the number of commercial radio station owners and a 33 percent decline in television owners. "It is difficult to fully quantify the harmful effects that media consolidation has had on the news, information and entertainment we receive," he said. "Fewer and fewer voices do not an informed electorate and robust democracy make."

Republican Commissioner Robert McDowell also issued his own statement, saying "burdensome rules that have remained essentially intact for more than a decade should not be allowed to continue impeding, or potentially impeding, the ability of broadcasters and newspapers to survive and thrive in the digital era."

McDowell added that while he supports the notice of inquiry, he has concerns about some of the questions including "the suggestion that the commission might attempt to use measures of 'civic engagement,' such as voter turnout data or citizen knowledge of government officials and issues, to evaluate the degree to which broadcasters in a particular market are fulfilling the agency's localism goal."

A top Department of Homeland Security official said Tuesday that contractors that fail to live up to security requirements in federal technology contracts should be held accountable, even if the vulnerabilities originated in products or capabilities provided by suppliers, Nextgov.com reported.

In most business situations, "if we have a contractual arrangement and you fail [to meet the requirements], I have legal recourse," said Richard Marshall, director of global cybersecurity management at DHS. "Why wouldn't the same be true when the supply chain [is involved]? I'm buying a product from you, and you represent that it's a product with the following characteristics. If you fail, I have a right to sue you."

Marshall spoke at the SecureAmericas conference in Arlington, Va., an event hosted by the cybersecurity provider International Information Systems Security Certification Consortium.

He noted a number of examples where failures in the supply chain led to serious security implications, including a wave of hard drives infected with viruses that infiltrated the U.S. market from Asia in 2007 and a recent case in which thumb drives were shipped preinstalled with malicious software, eventually leading to the Defense Department imposing a temporary ban on the storage devices. "Buy from an authorized vendor and make sure that vendor has purchased from an authorized vendor," Marshall advised.

Federal technology and acquisition officials must write contracts that set specific expectations for how industry secures computer hardware and software, including assurances the products they purchase from suppliers and the development processes followed best practices. To read more, click here.

EMC Corp., a provider of information technology infrastructure systems, has agreed to pay $87.5 million to settle a federal lawsuit alleging the firm provided kickbacks and made false claims to obtain federal contracts, the Justice Department said Tuesday.

The U.S. government alleged that EMC falsely claimed in contract negotiations with the General Services Administration that it would provide price comparisons showing that the government was getting the lowest price provided to commercial customers for similar services. "EMC knew that it was not capable of conducting such a comparison, and so EMC's representations during the negotiations - as well as its subsequent representations to GSA that it was conducting the comparisons - were false or fraudulent," the department said in a news release.

The company also was accused of engaging in an illegal kickback scheme to persuade the government to purchase EMC products. The firm allegedly paid consulting fees to companies for recommending that a government agency purchase EMC's products.

"Misrepresentations during contract negotiations and the payment of kickbacks or illegal inducements undermine the integrity of the government procurement process," Tony West, assistant attorney general for the department's Civil Division, said in a statement.

EMC spokesman Patrick Cooley said his firm "has always denied and will continue to deny any liability arising from the allegations made in this case. We're pleased that the expense, distraction and uncertainty of continued litigation are behind us." He added that some of the allegations stem from events nearly a decade ago and noted that EMC continues to provide services to "numerous" federal agencies.

The governors of California, New York and Pennsylvania wrote the FCC Tuesday to voice support for the proposed merger of Comcast and NBC Universal, urging the federal regulators to move quickly to approve the deal without "extraneous conditions."

"We hope you will agree that the significant economic benefits associated with the creation of this new joint venture far outweigh any potential harms, and that you will join us in supporting timely government approval of the Comcast NBCU transaction," Govs. David Paterson, D-N.Y, Ed Rendell, D-Pa., and Arnold Schwarzenegger, R-Calif., said in their letter to the FCC's five commissioners.

Comcast is headquartered in Philadelphia, while NBCU is based out of New York and also has major operations in California.

The governors noted that the combined companies currently account for 130,000 jobs in 40 states and the District of Columbia and will allow NBCU to become a stronger company. The deal, announced in December, will combine Comcast, the nation's largest cable television company, with the programming power of NBC Universal, which controls a major broadcast network, a Hollywood studio and several cable networks. Under the deal, Comcast would own a majority stake in NBC Universal.

Noting concerns raised by public interest and consumer groups about the deal, the governors said the combined company has pledged to abide by several "public interest commitments" in an effort to ensure that consumers will see the promised benefits and to "reassure competitors that the new NBCU will play fair."

Public interest and consumer groups, however, have argued that such commitments will not solve the fundamental flaws with the proposed merger, which they say will lead to higher prices, fewer choices and less competition.

The FCC recently extended the deadline for filing final comments on the merger until Aug. 5.

Hoping to stress its importance as federal regulators continue to scrutinize its business practices, Google released a study Tuesday that estimated that the firm helped generate $54 billion in economic activities for U.S. businesses in 2009.

The firm released the report at a Capitol Hill news conference during National Small Business Week in an effort to show how Google services such as AdWords, text ads that appear along side or at the top of Google search results, and AdSense, which shares profits from ads that appear on content creators' Web sites, benefit small businesses.

The $54 billion total was derived by adding the profits companies get from Google services such as AdWords, the revenues Google paid out to Web sites that use its AdSense program and the in-kind grants Google provides to nonprofits in each state, according to Google Vice President of Global Online Sales Claire Hughes Johnson.

The report provides a state-by-state breakdown of the economic value Google estimated its services have in each state. California, where Google is headquartered, had the biggest total of $14.1 billion, while Alaska had the smallest at $15.9 million. Three entrepreneurs were at the news conference to discuss how their business have grown with the help of Google services such as AdWords and AdSense. Ross Twiddy, director of marketing for vacation home provider Twiddy & Company Realtors of Duck, N.C., said AdWords helped take the company from the "dark ages" into the "Renaissance."

"These Businesses are growing and Google is thrilled to play a role," Hughes Johnson said.

Senate Small Business Chairmwoman Mary Landrieu, D-La., said one way the federal government is helping small businesses is by promoting broadband deployment and adoption and touted the Obama administration's push to include $7 billion in last year's economic stimulus for these efforts.

From this morning's Earlybird:

• "House leaders are hoping to organize Democrats' approach to Twitter, YouTube and other new media tools through a New Media Caucus that will serve as a one-stop resource for information and advice," Roll Call reports.

• "The dust-up over Facebook Inc.'s privacy practices is becoming a political headache for the company's former privacy chief in his campaign for California attorney general," the Wall Street Journal reports.

• "NASA declared the Phoenix Mars lander program officially dead Monday after repeatedly failing to regain contact with the spacecraft," AP reports.

An internal report released Monday says the Internal Revenue Service failed to check as required by agency rules the nonprofit status of groups participating in a volunteer program that provides free tax advice and electronic filing of returns to low-income and elderly taxpayers, Nextgov.com reported.

As of August 2009, 13,797 active e-file providers claimed to be not-for-profit organizations, which are exempt from all e-file program requirements and specific checks that for-profit organizations are required to complete. The majority of these organizations participated in the IRS' Stakeholder Partnerships, Education and Communication volunteer program, which provides free federal tax return preparation and electronic filing to underserved populations, including low- to moderate-income families and the elderly and disabled.

By not verifying the status of some e-file providers, the IRS increased "the risk to both the taxpaying public and the federal government for potential losses associated with unscrupulous e-file providers," the Treasury Inspector General for Tax Administration reported. To read more, click here.

In a major development for the telecommunications sector that will likely trigger a significant lobbying battle, key House and Senate Democrats announced Monday that they are joining forces to craft legislation to update the 1934 Communications Act.

The move follows weeks of acrimony over the FCC's legal standing to implement core provisions of its sweeping national broadband plan after a federal appeals court issued a decision undermining the agency's regulatory authority.

Senate Commerce Chairman John (Jay) Rockefeller, D-W.Va., Senate Communications Subcommittee Chairman John Kerry, D-Mass., House Energy and Commerce Chairman Henry Waxman, D-Calif., and House Communications Subcommittee Chairman Rick Boucher, D-Va., said in the statement that "they will invite stakeholders to participate in a series of bipartisan, issue-focused meetings beginning in June," according to a joint news release. The lawmakers added that a list of discussion topics and other details would be "forthcoming."

Earlier this month FCC Chairman Julius Genachowski proposed his "third way" approach that calls for applying a half dozen of the 48 provisions included in Title II of the Communications Act to broadband. The move was in response to a federal appeals court ruling last month that found the FCC had overstepped its authority by enforcing its network neutrality principles against Comcast.

Public interest groups Public Knowledge and Free Press praised the lawmakers' announcement but said the FCC should move forward on reclassification while Congress works on legislation. "The world has changed considerably since 1996, and Congress should be looking at how the law should accommodate today's technology and marketplace," Public Knowledge President Gigi Sohn said in a statement.

The U.S. Telecom Association, which represents telecommunications and broadband firms such as AT&T and Verizon, also welcomed the announcement. "We applaud the congressional leadership call for proposals to update the Communications Act, and look forward to participating in this timely and critical initiative," U.S. Telecom President and CEO Walter B. McCormick Jr. said in a statement.

Meanwhile, ColorofChange.org said Monday that it is pressuring eight members of the Congressional Black Caucus to support the FCC's reclassification move. The group, which uses the Internet to engage black Americans politically, is focusing on eight CBC members who it says have signed on to a letter being circulated by Rep. Gene Green, D-Texas, opposing the FCC's reclassification proposal.

Consumers Union is calling on House Energy and Commerce Communications Subcommittee Chairman Rick Boucher to make several major changes to draft privacy legislation released earlier this month.

Boucher's draft was roundly criticized by privacy advocates who said it would codify the current notice and choice self regulatory system in place now, a point Consumers Union noted as well in a letter Monday to Boucher, D-Va.

"Although Consumers Union believes the bill to be an important step towards generating an extensive public conversation on online privacy, there are certain features of the proposal that cause us concern," Ellen Bloom, Consumers Union's director of federal policy, wrote. "First and foremost, the bill appears to exclusively rely on the notice and choice model, which has been shown to be particularly ineffective in protecting consumer privacy online."

The Boucher bill would require Web sites to tell how they collect and use personally identifiable information. Generally, consumers would have to opt out of having such information collected, though it would mandate that users opt-in before Web sites could collect sensitive information such as financial and health data or share personally-identifiable data with some third-parties.

Consumers union also criticized provisions that would allow some third-party ad networks to abide by the measure's opt-out regime if they meet "minimal requirements." Bloom said Consumers Union believes "this loophole will permit an enormous percentage of data sale transactions to escape coverage." The group also criticized the draft for barring consumers from suing firms that violate their privacy, for lacking "meaningful security standards" for data breaches, and for pre-empting stronger state laws.

Consumers Union did praise some provisions such as the inclusion of Internet protocol numbers and customer information in the draft's definition of "covered information" and the inclusion of "geolocation" among the other types of data considered to be "sensitive."

"Consumers Union hopes that as the legislation progresses, it will include other methods of privacy protection, such as principles addressing data collection minimization, data quality, purpose specification, extensive security safeguards, individual participation, and accountability," Bloom wrote.

A new report released Monday examining what news is covered by new media and traditional news outlets found that blogs, social media sites and YouTube generally differ on what issues and stories gain traction compared with the mainstream media.

The study released by the Pew Research Center's Project for Excellence in Journalism found blogs shared the same lead story with traditional media sources such as newspapers and broadcast news outlets in just 13 of the 49 weeks covered, while YouTube stories overlapped on just eight of the 49 weeks and the top stories on Twitter aligned with traditional news outlets in just four of the total weeks covered.

Despite this, the study found blogs in particular still relied on traditional news sources such as newspapers and broadcast news outlets for their information. More than 99 percent of the stories linked to on blogs came from traditional news sources, with 80 percent of such links coming from the news sites of the BBC, CNN, the New York Times and the Washington post. Twitter was less tied to traditional media, with only 50 percent of Tweets linked to "legacy" outlets.

While new media still rely on old media for information, the study found the mainstream news outlets didn't "follow new media's agenda," according to a news release from the center. The center found only one story, the controversy related to e-mails from climate change researchers, that was a major story first on the blogs before it later gained more attention from tradition media.

"As social media sites and tools continue to evolve, so too will the interplay among new and traditional outlets and citizens' relationship to the news," Amy Mitchell, the center's deputy director, said.

The study found the three types of new media also differed among themselves as far as their news focus. The study found blogs, which tended to be evenly split among conservative and liberal voices, "gravitated toward stories that elicited emotion, concerned individual or group rights or triggered ideological passion," the center said. Twitter posts tended to focus on passing on important information, while "YouTube users engage not through comments but through selection and sharing" of videos, according to the center.

The center studied the news linked to on millions of blogs and social media pages tracked by Icerocket and Technorati for about a year starting in Jan. 19, 2009 and ending on Jan. 15, 2010, and also studied YouTube's news channel videos during the same period. It examined news stories linked to in Tweets and monitored by Tweetsmeme from June 15, 2009 through Jan. 15, 2010.

Amid growing concerns about the group's privacy practices, Facebook founder and CEO Mark Zuckerberg pledged Monday to make more changes to the social networking site's privacy settings in response to public outcry.

While some users have complained that Facebook has made its privacy controls too complicated, privacy advocates, policy makers and some users also have voiced concerns about Facebook's plans to share some information, with users' consent, with third parties.

Last month, Sen. Charles Schumer, D-N.Y., urged the FTC to provide guidelines for social networking sites about the use of private information and prohibit access without user permission. And a group of European data privacy officials also raised concerns earlier this month about Facebook's privacy control changes. Meanwhile, a group of Facebook users have launched a "Quit Facebook Day" campaign, urging users to quit the social networking site on May 31 because they say it doesn't give users "fair choices" on how to manage their data and doesn't respect user privacy.

In an op-ed in The Washington Post Monday, Zuckerberg attempted to address concerns over Facebook's privacy controls and data use practices. "Many of you thought our controls were too complex," he said. "Our intention was to give you lots of granular controls; but that may not have been what many of you wanted. We just missed the mark."

Zuckerberg said Facebook would be offering users a "simpler" way to control their Facebook data. At the same time, he said the controls would allow users to "turn off all third-party services." Zuckerberg said the changes would be implemented "as soon as possible."

He also addressed concerns that Facebook is disclosing user data to third-parties without user permission. "We do not share your personal information with people or services you don't want. We do not give advertisers access to your personal information. We do not and never will sell any of your information to anyone," Zuckerberg wrote.

FTC Chairman Jon Leibowitz says his agency is taking a "very, very close look" at Google's recent admission that it had been collecting more Wi-Fi data as part of its Street View service than it previously disclosed.

During a Thursday afternoon hearing before the Senate Appropriations Financial Services and General Government Subcommittee on the FTC's budget, Leibowitz was asked about the Google Wi-Fi controversy by ranking member Susan Collins, R-Maine. Google revealed a week ago that vehicles that snap photos for Google's Street View feature and Google Maps services also scanned for wireless networks and collected the name and numerical address of such networks. Google disclosed that this software also "mistakenly" collected some personal information from unsecured home or business Wi-Fi networks.

When Collins asked if the FTC was investigating the matter, Leibowitz said while the agency does not comment on investigations until they are over, "I can certainly tell you, we're going to take a very, very close look at this."

He added that Google officials had already talked to FTC staff about the incident. "Obviously this is just one example ... of why consumers have very serious privacy concerns about data that's being collected. So we are going to take a look at it. Absolutely," Leibowitz said.

Collins responded, "Who would have guessed as those cars were going
by taking photographs for Google Maps, that in fact they were collecting all this personal data. That's just really troubling. It has this great Big Brother connotation to it that is very disturbing."

Leibowitz noted he has already received several letters from lawmakers on the issue. Among those who have raised concerns about the incident include House Energy and Commerce ranking member Joe Barton, R-Texas, and senior committee member Edward Markey, D-Mass.

The Electronic Privacy Information Center last week urged the FCC to investigate the issue to ensure the privacy of users of communications networks, saying "the capture of Wi-Fi data in this manner by Google Street View could easily" violate the Wiretap Act.

Google has acknowledged that the data collection was a mistake, that it was going to delete the data, has stopped Street View cars from collecting Wi-Fi data, has called for a third-party review of the software at issue, and pledged to cooperate with all the relevant agencies on the matter.

It's been a busy week for Sen. Amy Klobuchar, D-Minn., on the tech and telecom front. A day after criticizing Google for its Wi-Fi data collection practices, Klobuchar blasted AT&T Friday for hiking the fee it imposes for breaking some smart phone contracts.

Noting that AT&T boosted the early termination fee (ETF) for some of its smart phone contracts to $325, Klobuchar said the move provides another example of why Congress and the FCC need to intervene to protect consumers. After Verizon Wireless raised its ETFs last year, Klobuchar, a member of the Senate Commerce Committee, introduced legislation in December that would place restrictions on ETFs. The FCC has been studying ETFs and requested information from wireless operators on the practice.

"Once again wireless providers have shown that they would rather use arbitrary fees than network and service quality to keep customers," Klobuchar said in a statement. "It is time for Congress and the Federal Communications Commission to act to ensure competition and consumer protection in the cell phone marketplace."

AT&T spokesman Mark Siegel said while his company did raise the ETF for some of its smart phones, such as the iPhone and Blackberry Bold, it lowered its ETF on some of its less-advanced phones from $175 to $150. Siegel also noted that ETFs are pro-rated based on when a consumer breaks their contract. "The longer you're with us, the lower your ETF," he said.

He added that ETFs are "one of the reasons our customers can enjoy such low prices on hand sets." Siegel also said that customers can obtain mobile phone service without a contract if they want to pay full price for a handset.

Verizon won FCC approval Friday to spin off its rural wireline assets in 14 states to Frontier Communications -- but only after the agency imposed extensive conditions on the $8.6 billion transaction in an effort to safeguard consumers and smaller competitors.

"The commission concluded that the commitments that applicants have offered, coupled with monitoring and enforcement by the commission, will minimize the risks of harm and ensure that this transaction is in the public interest," the agency said.

Senate Commerce Chairman John (Jay) Rockefeller, D-W.Va., whose home state of West Virginia would be directly affected, asked the FCC late last year to closely scrutinize the deal.

Last week, Verizon and Frontier promised to abide by an additional 21 commitments, the investment firm Stifel Nicolaus said Thursday. The spin-off has been approved by the nine states that required regulatory reviews, with the Public Service Commission of West Virginia green lighting the deal May 13. The West Virginia commission imposed several conditions on Frontier, including a requirement that it make $279 million in capital investments in West Virginia through 2013.

Verizon is the nation's second largest telecommunications provider, while Frontier would emerge as the country's fifth largest local exchange carrier.

"This transaction will benefit consumers by enabling Frontier to strengthen its position as a premier broadband and communications provider focused on rural and small- to medium-sized cities," Kathleen Grillo, Verizon's senior vice president of federal regulatory affairs, said in a statement. "It also will allow Verizon to accelerate its focus on wireless, broadband and global IP networks for its customers."

There are several tech and telecom-related events next week. Here are some of the highlights:

Monday:
The Progress and Freedom Foundation will hold a Capitol Hill briefing at noon on online privacy and advertising and on draft privacy legislation released earlier this month by House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va.

Tuesday:
Google will hold a news conference at 9:30 a.m. to release a report detailing Google's economic impact in all 50 states. Senate Small Business Committee Chairwoman Mary Landrieu, D-La., will join Google and other small business representatives at the event.

The House Judiciary Crime, Terrorism, and Homeland Security Subcommittee will hold a 2:30 p.m. hearing on H.R.3040, the "Senior Financial Empowerment Act of 2009," aimed at preventing mail, telemarketing, and Internet fraud targeting seniors in the United States.

Wednesday:
The Federal Trade Commission, Justice Department and the U.S. Patent and Trademark Office will hold a joint public workshop beginning at 9 a.m. on the intersection of patent policy and competition policy and its implications for promoting innovation. Among those speaking at the event include PTO Director David Kappos, Assistant Attorney General for Antitrust Christine Varney and federal Chief Technology Officer Aneesh Chopra.

The House Judiciary Crime, Terrorism, and Homeland Security Subcommittee will hold a hearing on the Supreme Court's decision invalidating the crush video statute in United States v. Stevens. The time for this event has not been announced.

Thursday:
Wired Safety holds its 10th annual WiredKids Summit beginning at 8:30 am, which will feature presentations and panel discussions about online safety issues impacting American youth.

The House Science Subcommittee on Technology & Innovation holds a hearing at 10 a.m. on interoperability in public safety communications equipment.

Former FCC Commissioner Harold Furchtgott-Roth said Friday that the uncertainty created by a federal appeals court decision earlier this month that cast doubt over the commission's authority over broadband will be exacerbated by the FCC's recent decision to reclassify some aspects of broadband as a telecommunications service.

During a Webinar on broadband regulation sponsored by the Telecommunications Industry Association, Furchtgott-Roth, an economist who served as a GOP appointee to the commission from 1997-2001, discussed the potential impact of FCC Chairman Julius Genachowski's decision to reclassify some aspects of broadband as a telecommunications service under Title II of the Communications act.

He argued that it would inject more uncertainty into that market because the FCC's decision will likely be successfully challenged in court. As a result, Furchtgott-Roth said investors are unlikely to invest in the broadband market if they are unsure of the regulatory landscape. "I don't think investors are going to invest in companies ... if there is not clear legal certainty," he said.

Furchtgott-Roth argued that the FCC seems to be gambling that its latest effort will clear legal muster. Instead, the commission should be sticking to a narrow interpretation of the law that will help provide clear rules of the roads for telecom firms, he said. "The commission has a history of coming up with inventive rules that don't fall narrowly within law," he added.

Furchtgott-Roth, however, did say that had the FCC opted from the beginning to classify broadband as a telecommunications service in the 1990s instead of as a more lightly regulated information service under Title I the commission could more easily defend its stand in court. The fact that the FCC will now have to "go back to the courts and say, 'folks we made a mistake' this not the way to run a government."

However, not everyone agrees with Furchtgott's view that the FCC's reclassification decision will harm investment. Venture capitalist Fred Wilson of Union Square Ventures backs the FCC's move and has encouraged other "business leaders working and investing in the open Internet to stand up and say that net neutrality is pro-business. Because if you don't, the FCC could lose this fight, and we'll be in a much worse place," he wrote in a commentary earlier this month.

The FTC Friday announced it has approved Google's $750 million acquisition of mobile ad provider AdMob, despite acknowledging antitrust issues related to the deal.

The commission voted 5-0 to close its investigation of the deal, saying in a statement that it has concluded "that it is unlikely to harm competition in the emerging market for mobile advertising networks."

The commission did acknowledge that the merger of the two leading mobile ad providers did raise "serious antitrust issues," but added that those concerns were overshadowed by Apple's entry into the market with its purchase of Quattro Wireless, which it has used to launch its own iAd mobile ad service.

"In addition, Apple can leverage its close relationships with application developers and users, its access to a large amount of proprietary user data, and its ownership of iPhone software development tools and control over the iPhone developers' license agreement," the FTC statement said.

"Though we have determined not to take action today, the commission will continue to monitor the mobile marketplace to ensure a competitive environment and to protect the interests of consumers," the commission added.

In a blog post Friday, Google Vice President of Product Management Susan Wojcicki praised the FTC's move as "great news for the mobile advertising ecosystem as a whole. This was reflected in the widespread industry support for our acquisition." She said Google would be working in the "coming weeks" to close the deal.

Critics, however, have argued that together the two firms will control 70 percent of the growing mobile ad market and that combining the leading player, AdMob, with the number two player, Google, a dominant force in computer-based online advertising, will make it difficult for new players to enter the market.

Noting reports that FTC staff had recommended blocking the deal, Scott Cleland, chairman of the coalition NETCompetition.org, which is made up of major telecom and wireless firms such as AT&T, Sprint and Verizon, said the FTC's reliance on Apple to provide competition in this market is flawed given that it will likely only serve the high-end market.

"The FTC just ceded most of the mobile ad market to Google," Cleland argued, adding that "It's a bad day for competition and consumers."

A bipartisan group of House Energy and Commerce Committee members have raised concerns about the deal. ""The need for thorough review is particularly pressing given Google's dominant position in search advertising including mobile search advertising and its growing influence over other forms of online advertising," they wrote last month in a letter to Energy and Commerce Chairman Henry Waxman, D-Calif., urging him to ask the FTC to brief the committee on the Google-AdMob deal.

The nation's top technology chief said Thursday that standards for security, interoperability and data portability are needed to drive forward the massive transition to cloud computing under way across government, Nextgov.com reported.

"We want to be pragmatic, but aggressive," said federal Chief Information Officer Vivek Kundra. He added the consolidation of federal data centers that the White House announced in February was the first of numerous "game-changing approaches" that will drive the move to cloud computing that the Office of Management and Budget announced in September 2009.

For cloud computing to become widespread, the federal government must develop standards so agencies don't duplicate inefficiencies in data centers, Kundra said during the keynote speech at the Cloud Computing Forum and Workshop the National Institute of Standards and Technology hosted in Washington.

"What's important today is the [development of standards] in the area of security, interoperability and data portability" to ensure information is protected, clouds and the computer applications they support can work together, and content can be moved within and among different clouds without jeopardizing access to or integrity of the data, Kundra said. To read more, click here.

From this morning's Earlybird:

• "With bipartisan backing, the House Oversight and Government Reform Committee approved a bill Thursday to expand and update programs to ensure the security of federal computer systems," CongressDailyAM (subscription) reports.

• "Facebook, MySpace and several other social-networking sites have been sending data to advertising companies that could be used to find consumers' names and other personal details, despite promises they don't share such information without consent," the Wall Street Journal also reports.

Sen. Amy Klobuchar, D-Minn., wrote Google CEO Eric Schmidt Thursday seeking answers to her questions about the firm's revelation last week that it had "mistakenly" collected private data from unsecured Wi-Fi networks.

In her letter to Schmidt, Klobuchar, a member of the Senate Commerce Committee, noted Google's revelation that vehicles that snap photos for Google's Street View feature and Google Maps services also scanned for wireless networks that collected the name and numerical address of such networks. When it came across an unsecure home or business network, the Google scanning software also collected "snippets" of data from them that may have included Web sites, e-mail messages, passwords and other personal information, she noted.

"This data-gathering raises serious privacy concerns," she wrote. "While your company publicly apologized and explained that the data collection was a result of an unintentional coding error, many questions remain."

They include what types of data were collected, how was it stored and who had access to it. Klobuchar also asked to know if any Google software engineers or other employees had noticed the additional information in the three years the database was used and what Google is doing to ensure it does not happen again.

In a letter to the FTC earlier this week, House Energy and Commerce ranking member Joe Barton, R-Texas, and Rep. Edward Markey, D-Mass., a senior member of the panel, raised similar questions about the Google Wi-Fi incident and also asked whether the firm may have broken any laws.

Google has acknowledged it made a mistake and said in a blog post Friday that it was going to delete the data, has stopped Street View cars from collecting Wi-Fi data and has called for a third-party review of the software at issue. A Google spokeswoman said Wednesday that Google "is working with the relevant authorities to answer their questions and concerns."

The U.S. Patent and Trademark Office announced Thursday that it has signed a memorandum of understanding establishing bilateral cooperation on patents with its Chinese counterpart.

The Commerce Department agency said in a statement that the agreement provides a framework for increasing cooperation between the PTO and China's State Intellectual Property Office (SIPO). They said they hope the effort will improve the administration and effectiveness of the two countries' intellectual property systems through the exchange of information and development of best practices. The agreement also calls for developing work-sharing programs and a bilateral "patent prosecution highway" aimed at reducing patent application backlogs at the USPTO and Chinese SIPO.

"This memorandum reconfirms and further strengthens our commitment to the growing cooperative relationship between our two offices," PTO Director David Kappos said.

The FCC reversed itself Thursday in a new report assessing mobile wireless competition by dropping any mention of the cellular market being "effectively competitive." It was the first such omission in the congressionally mandated report since 2003, CongressDaily reported.

The latest iteration also finds that the wireless sector is facing "continued" concentration. Those conclusions drew criticism from the FCC's two Republicans, Robert McDowell and Meredith Atwell Baker.

"I see nothing in this report that should lead us to question the overall competitiveness and vitality of the mobile wireless industry in the U.S.," Baker said during the commission's monthly meeting. McDowell warned that the document appears designed to pave the way for increased regulation.

"We are going to need an extra dose of vigilance going forward and use whatever policy levers we have available to ensure good outcomes for American consumers," countered Democratic regulator Michael Copps.

"This report does not seek to reach an overall yes-or-no conclusion" about the state of competitiveness, FCC Chairman Julius Genachowski said, adding that it highlights both hopeful and troubling trends and would help the FCC decide whether more regulation is needed.

Despite the acrimony, the report was unanimously approved by the five commissioners, though the GOP regulators said they concurred, meaning they are not in full agreement with their Democratic counterparts.

In a statement, Steve Largent, president of the wireless industry group CTIA, said his industry is "disappointed and confused" by the FCC's action. "We believe, based on the facts submitted, that a determination of 'effective competition' in the wireless marketplace is not only inescapable, but is actually quite simple - ask any American," he said. "...The U.S. wireless market is the envy of the world. That is why the lack of a finding is so troubling."

Free Press Policy Counsel M. Chris Riley was critical of the commission for not doing more to ensure better wireless competition, saying the FCC should initiate a rulemaking to take steps to promote competition. "Although we are glad the commission is no longer blind to a broken market, we are disappointed that it apparently lacks the political courage to acknowledge these problems by concluding that the market does not demonstrate effective competition, an apparent side-stepping of the congressional requirement to conduct such an analysis," he said.

Sen. Mark Warner, D-Va., Thursday questioned the role technology may have played in the May 6th "flash crash" in U.S. financial markets.

During a hearing on the incident before a Senate Banking subcommittee, Warner noted that some new technologies allow traders to execute orders in nano or milliseconds. "Have we seen on May 6th what may be the first kind of warning shot of what may be the next potential systemic crisis because of technology run amuck," he asked federal regulators.

Securities and Exchange Commission Chairwoman Mary Schapiro noted the agency solicited comments in January on the impact that "high-frequency" trading has on retail investors, the health of the markets and "the ability of public companies to raise capital, the whole reason our markets exist at the end of the day."

As far as what may have caused the flash crash, an initial study from the SEC and Commodity Futures Trading Commission "suggests the occurrence of a very severe temporary liquidity failure than the effect of any economic factor," Schapiro said.

Warner responded in directing the same question to CFTC Chairman Gary Gensler, "how do we get to that level of confidence when it seems like certain institutions are using not greater investigatory knowledge, but really just technology in a sense to game the market?"

Gensler noted Warner's reference to practices known as "sniping and sniffing" when a computer puts in a very small order, maybe just one futures contract, to see "whether it is addressed or hit and lifted. And then it will put in more and so forth. We don't know yet whether that was a piece of what was happening May 6th," but added the commission is examining the issue. He also said that "we can't stop technology. But I think that we have to update our regulations to stay abreast of this."

Schapiro added that "we've got to get that balance right between when the technology, which provides benefits, is allowed to run and when it's not allowed to run because it's run amuck. And ... we can put the human factor back into it".

Former eBay CEO Meg Whitman has blown a huge lead she held in March over Insurance Commissioner Steve Poizner in the race to be the Republican nominee for California governor, a new poll released Wednesday found.

The latest poll released by the Public Policy Institute of California shows Whitman's lead over Poizner has dropped from nearly 50 points in the organization's March poll. She now leads Poizner 38 percent to 29 percent.

"Whitman's support has dropped at least 17 points across all demographic groups, with the sharpest declines among those who are not college graduates (29 points) and those whose annual household incomes are at least $80,000 (28 points)," according to a news release from the institute. The winner of the race will face Democratic Attorney General Jerry Brown, who leads both Whitman and Poizner in general election matchups measured by the poll.

Meanwhile, the same poll also found that former Hewlett-Packard CEO Carly Fiorina has a slight edge over former Rep. Tom Campbell in the race for the GOP Senate nomination, 25 percent to 23 percent, similar to the institute's March poll. Support for the third candidate in the GOP Senate race, Assemblyman Chuck DeVore, has doubled since the institute's March poll to 16 percent.

The winner of the June primary will face Democratic Sen. Barbara Boxer in the fall. The poll shows Boxer now leads each of the potential Republican senate nominees in hypothetical matchups after trailing Fiorina and Campbell in the institute's March poll.

The institute interviewed a total of 2,003 people May 9-16 and has a sampling error of plus or minus 2 percent, while the subsample of 411 GOP primary likely voters had an error rate of plus or minus 5 percent.

From this morning's Earlybird:

• "Energy and Commerce ranking member Joe Barton," R-Texas, "and Rep. Edward Markey, D-Mass., a senior member of the Energy and Commerce panel... urged the FTC to examine recent revelations that Google has collected information from private but unsecure Wi-Fi networks," CongressDailyAM (subscription) reports.

• "Adding an anti-porn amendment to a science authorization bill failed to assuage House Republicans, who blocked passage of the bill for the second straight week Wednesday," Roll Call reports.

• "Comcast's bid for NBC Universal received a boost this week after two House lawmakers urged the Federal Communications Commission to keep to its timeline for reviewing the deal," The Hill reports.

House Speaker Nancy Pelosi, D-Calif., criticized Republicans Wednesday for blocking passage of legislation that would reauthorize research and development programs, boost science, math and technology education, and other programs aimed at boosting U.S. competitiveness.

For the second time, Democratic efforts to gain passage of a bill reauthorizing the America COMPETES Act failed after they were unable to muster the two-thirds vote needed to pass the bill on the House floor under the suspension of the rules. Last week, House Democratic leaders pulled the bill from the House floor after lawmakers passed a GOP-sponsored motion to recommit the bill.

"The COMPETES Act will spur innovation, invest in cutting-edge research, modernize manufacturing and create jobs," Pelosi said in a statement. She added that, "These all-American goals deserve bipartisan support and have received overwhelming votes in the past. Yet today, as they did last week, Republicans chose cheap political tricks over progress."

In a statement, House Science and Technology ranking member Ralph Hall, R-Texas, said again that he remains "committed to the underlying goals of the America COMPETES Act and to working with Democrats in a true bipartisan fashion to address Republican concerns," but added that the bill still costs too much and authorizes new programs that he said stray from the original America COMPETE's law.

An internal agency watchdog said the Veterans Affairs Department runs unsecure Web application servers, uses weak or default passwords to protect its hardware and software, and does not comprehensively monitor connections between its systems and the Internet, Nextgov.com reported.

These conditions leave department systems vulnerable to penetration or attack, said VA Assistant Inspector General Belinda Finn in testimony before the House Veterans Affairs Committee Wednesday.

The 2002 Federal Information Security Management Act requires federal agencies to develop, document and adhere to detailed information security programs. But Finn said VA continues to have significant information security deficiencies. She said the IG office found several VA database systems used outdated software that could allow unauthorized users to access mission-critical data and alter databases.

Most of VA's 153 hospitals do not segment access to their medical networks, according to Finn. As a result, IG investigators were able to penetrate the networks -- including those hosting medical diagnostic and imaging systems -- from remote locations.

VA had not identified, managed or monitored a significant number of system connections with external sources, meaning "an attacker could penetrate VA's internal network and systems over an extended period of time without being detected," she said.

The department has made progress improving its IT security during the past several years, Finn told committee members, but still needs to complete the majority of 11,000 action plans to mitigate and eliminate security risks.

Roger Baker, VA's chief information officer, testified that the department monitors its core enterprise network 24 hours a day, has deployed 160 intrusion detection systems nationally, and blocks delivery of 16.4 million e-mails a day viewed as spam or containing malware. To read more, click here.

Senate Commerce Chairman John (Jay) Rockefeller, D-W.Va., introduced legislation Wednesday that would bar companies from automatically passing a consumer's credit or debit card information to an online partner in an effort to crack down on a practice known as data-pass marketing.

Rockefeller also released a second report on the data-pass marketing tactics used by some firms to misleadingly get consumers to sign up for discount membership clubs and other services as part of other online transactions with respected online retail sites. Rockefeller has investigated firms that obtain consumer credit and debit card information as part of the checkout process at some popular Web retail sites. The committee found that consumers are deceptively lured to sign up for services offered by these third-party firms with an offer for a discount or reward during the checkout process for an unrelated product or service.

The committee has been investigating these tactics for the past year and issued its first report on the issue last year that focused on three firms, Affinion, Vertrue, and Webloyalty, that had partnered with numerous well-known Web retail firms to enroll millions of consumers, many without their knowledge, in discount club memberships using data-pass tactics that netted more than $1 billion in revenues for these firms and their partners.

The committee's second report detailed the difficulty consumers have had obtaining refunds from Affinion, Vertrue, and Webloyalty. The report found that the firms had created scripts and policies intended to minimize the amount of money they would have to return to consumers who had inadvertently enrolled in the clubs. It also found that even though the three firms violated credit company rules and had generated a high volume of consumer complaints, they continued to have access to the payment systems operated by American Express, MasterCard and Visa until Rockefeller notified the credit card companies in December 2009 of his concerns.

"The bill I'm introducing today will ban these deceptive online sales practices once and for all," Rockefeller said in a statement.

In addition to banning commercial Web sites from transferring a consumer's credit and debit card numbers to "post-transaction" third-party sellers, the measure also would prohibit firms like Affinion, Vertrue, and Webloyalty from using misleading post-transactions tactics and would require them to obtain a consumer's credit or debit card numbers directly from consumers.

Webloyalty issued a statement in response to the committee's latest report and Rockefeller's bill, noting that it has changed its practices in response to the committee's investigation. "The Committee's most recent input will be an important consideration as we continue to refine our practices," the firm said. "We believe that our current enrollment and post-enrollment policies and procedures meet virtually all of the requirements of the proposed legislation."

A key supporter of a law banning Internet gambling Wednesday found himself trying to defend the measure against those who questioned why the federal government shouldn't benefit by taxing an activity that many Americans are engaging in despite the prohibition, CongressDaily reported.

During a House Ways and Means Committee hearing on the issue, Rep. Bob Goodlatte, R-Va., who helped author the 2006 law set to go in effect in June, defended the measure that bans Internet gambling and requires credit card firms to block payments to offshore gambling operators.

House Financial Services Chairman Barney Frank, D-Mass., has introduced legislation that would establish a regulatory and enforcement regime for online gambling and a companion measure, offered by Ways and Means Income Security and Family Support Subcommittee Chairman Jim McDermott, D-Wash., would establish a tax regime. Frank said he will mark up his bill in July.

Supporters of the bills say despite the 2006 law, Americans are still gambling online. This year, $12 billion has been deposited in offshore online gambling accounts, while offshore gambling operators have received about $5 billion a year in gross revenues, according to McDermott.

Frank and McDermott argued that bringing online gambling out of the shadows would help protect consumers while generating tax revenues and U.S. jobs.

"Prohibition hasn't prevented the millions of American who want to gamble from doing it," McDermott argued. "It has forced Internet gambling operators to work offshore; it has put consumers at risk, and it sends billions in dollars in revenue to other nations." To read more, click here. (Subscription required)

Two key House Energy and Commerce members Wednesday urged the FTC to examine recent revelations that Google has collected information from private but unsecure Wi-FI networks.

Energy and Commerce ranking member Joe Barton, R-Texas, and Rep. Edward Markey, D-Mass., a senior member of the Energy and Commerce panel, wrote FTC Chairman Jon Leibowitz about whether the FTC is investigating the matter.

Google acknowledged on Friday that if had been "mistakenly collecting samples of payload data" from private open, or unsecured, Wi-Fi networks. It disclosed the information after being asked by a German data protection official to audit the Wi-Fi data its "Street View' cars collect for use in location-based services such as Google Maps.

"Thus far, Google has acknowledged it collected private e-mail and Internet surfing data, but it has not yet clarified the extent or nature of the data collected," wrote Barton and Markey, the co-chairmen of the House Privacy Caucus.

Among the issues they asked Leibowitz to respond to is the type and nature of data Google collected, how it was stored and who had access to it. In addition they questioned whether Google's data collection practices violate "the public's reasonable expectation of privacy," whether the Internet firm's actions constitute an "unfair or deceptive act or practice" that harms consumers, issues under the FTC's purview, and whether Google broke the law.

The lawmakers also asked whether the commission has the authority it needs to "take necessary action" against such practices. If not, they urged Leibowitz to provide "legislative language you would recommend to enable the commission to act appropriately."

Google has acknowledged it made a mistake said in its blog post Friday that it was going to delete the data, has stopped Street View cars from collecting Wi-Fi data and has called for a third-party review of the software at issue.

European regulators have expressed outrage at the incident. The German privacy official who originally requested the audit of the Street View software has given Google until May 26 to hand over the hard drives containing data collected by Google's Street View cars or it could face legal action. "We are working with the relevant authorities to answer their questions and concerns," a Google spokeswoman said Wednesday.

Democrats Wednesday failed for the second time to gain House passage of legislation that would reauthorize research and development programs at federal science agencies in an effort to boost U.S. competitiveness.

House Science and Technology Chairman Bart Gordon, D-Tenn., reintroduced the America COMPETES Act Tuesday after it was pulled from the floor last week when lawmakers passed a GOP-sponsored motion to recommit the measure. House leaders brought a revised version of the bill up Wednesday under suspension of the rules, which does not allow a bill to be amended, but failed to garner the two-thirds vote required to pass bills under that procedure. It failed on a 261 to 148 vote. The measure garnered the support of all the Democrats who voted but only 15 Republicans.

The measure mirrored the version the House took up last week except it would authorize the bill's programs for three years instead of five and included language from last week's motion to recommit, offered by Science and Technology ranking member Ralph Hall, R-Texas, that would ban authorized funds in the bill from being used to pay the salaries of federal employees disciplined for looking at pornography at work.

"I'm disappointed, but not deterred," Gordon said in a statement after the latest setback. "As I've said before, this bill is too important to let fall by the wayside. More than half of our economic growth since World War II can be directly attributed to development and adoption of new technologies. The path is simple: research leads to innovation; innovation leads to economic development and good paying jobs.

Hall and other Republicans said while they support the bill's goals, it was too costly and strayed too far from the scope of the original 2007 America COMPETES law, which expires this year.

After the bill failed last week, Gordon urged the many business and high-tech groups that back the measure to pressure House Republicans to support the measure. Information Technology Industry Council President and CEO Dean Garfield Wednesday wrote House Speaker Nancy Pelosi, D-Calif., and House Minority Leader John Boehner, R-Ohio, urging support for the measure and indicating that the group would include the vote on its annual high-tech scorecard given the "significance" of the measure to the IT and communications industry.

"Through strategic investments in education, science, and research, this legislation has played a critical role in fostering high-tech job growth as well advancing a host of new technologies ranging from energy efficiency to communications and health information technology," Garfield wrote.

From this morning's Earlybird:

• "House Democrats" today "will take a second stab at a science and technology research funding bill that was scuttled last week because of a debate over Internet porn," The Hill reports.

• "One of modern life's most durable features -- fixed-price electricity -- is slowly being pushed to the sidelines, a creeping change that will influence such things as what time millions of Americans cook dinner and what appliances they buy," the Wall Street Journal reports.

After the measure was pulled from the floor last week, the House will try again Wednesday to pass legislation that would reauthorize research and development programs at federal science agencies in an effort to boost U.S. competitiveness.

House Science and Technology Chairman Bart Gordon, D-Tenn., was expected Tuesday to reintroduce the America COMPETES Act, which was pulled from the floor last week after lawmakers passed a GOP-sponsored motion to recommit the measure, Gordon said in a news release.

The measure will mirror the version the House took up last week except it will authorize the bill's programs for three years instead of five and will include language included in the motion to recommit, offered by Science and Technology ranking member Ralph Hall, R-Texas, that would ban authorized funds in the bill from being used to pay the salaries of federal employees disciplined for looking at pornography at work. After the GOP motion scuttled the bill last week, Gordon blasted the porn provision included in the motion as a "cynical" attempt to provide material for campaign attack ads against Democrats this fall.

The revised America COMPETES bill will be considered Wednesday under a suspension of the rules, a procedure that requires the support of two-thirds of those present to pass, cannot be amended and is usually reserved for noncontroversial bills.

"While I certainly would have preferred the stability a five-year authorization would have given our science agencies, I am willing to compromise with the minority, in the interest of getting a good bill through the House and to our colleagues in the Senate," Gordon said in the statement. "This legislation is too important to our nation's scientific and economic leadership to let it fall victim to political gridlock."

Hall argued last week that the bill was too costly and strayed too far from the intent and scope of the original America COMPETES law.

Senate Homeland Security and Governmental Affairs Chairman Joseph Lieberman, I-Conn., plans to unveil a bill soon that aims to beef up cybersecurity inside and outside government by using agencies' mammoth collective purchasing power to demand safeguards in information technology products, a Senate Democratic aide said on Monday.

The House and Senate are working on legislation that would update the 2002 Federal Information Security Information Management Act, a law widely criticized for requiring agencies to fill out reports showing they have complied with security policies rather than asking them to take specific actions to secure networks, Nextgov.com reported.

The House Oversight and Government Reform Committee is expected to vote on a FISMA reform bill possibly this week. Lieberman is expected to fold a companion Senate bill sponsored by Sen. Thomas Carper, D-Del., who sits on Lieberman's panel, into a comprehensive cybersecurity package.

Lieberman's proposal would reform government procurement by "creating a system that requires acquisition officers in the federal government to have the knowledge that they need about the vulnerabilities in products," but would stop short of blacklisting certain technologies, said Deborah Parkinson, a Democratic staffer on the Senate committee. She explained officials would be better informed about product security features and security deficiencies, which would have a ripple effect on shaping the security posture of the IT market.

Some IT industry players have raised concerns about a procurement provision in the House bill that would require the government to develop a list of technologies, in order of priority, that agencies should use to automate security functions. Vendors say the list would prematurely pick winners and losers in a market that is constantly changing and the provision could unintentionally hamper innovation. To read more, click here.

House Judiciary Chairman John Conyers, D-Mich., and Judiciary ranking member Lamar Smith, R-Texas, announced Tuesday they are introducing a revised bill that would give the Patent and Trademark Office authority to set its own fees while including language barring the diversion of agency funds for other government programs, CongressDaily reported.

A narrower measure that would only give the PTO fee-setting authority was expected to be considered by the House Tuesday under the suspension calendar. It was pulled after several industry groups opposed it on grounds it did not include a provision that would bar such a diversion of funds.

In addition to giving the PTO overall fee-setting authority, the new bill would give the agency authority to impose a 15 percent temporary surcharge for all of its fees and prevent PTO funds from being diverted from the agency for unrelated government programs.

Several groups, including the Pharmaceutical Research and Manufacturers of America, American Intellectual Property Law Association and the Coalition for 21st Century Patent Reform, which includes such companies as General Electric, Texas Instruments and 3M, voiced opposition to the original bill because it did not include the ban on fee diversion.

All three groups back a broader compromise Senate overhaul bill, which includes the PTO fee-setting language. To read more, click here. (Subscription required).

Google is coming under increased scrutiny by European regulators after revealing last week that it had mistakenly collected more data from WiFi users than previously disclosed.

Johannes Caspar, a German data protection official in Hamburg, has given Google until May 26 to hand over the hard drives containing data collected by Google's Street View cars for use in location-based services such as Google Maps or it could face legal action, according to several media reports.

Google acknowledged in a blog post Friday that it had been "mistakenly collecting samples of payload data" from private, unsecured WiFi networks. Google said it plans to delete the data as soon as possible, has stopped Street View cars from collecting WiFi data and has called for a third-party review of the software at issue. It revealed the problem after Caspar asked Google to conduct an audit of the service.

Google also came under fire Tuesday from European Union Justice Commissioner Viviane Reding. "It is not acceptable that a company operating in the EU does not respect EU rules," she told reporters. A Reding spokeswoman noted that Google's Street View service falls under the EU's data privacy law and is subject to action by data privacy commissioners in each EU member state.

Here in the United States, the public interest group Consumer Watchdog wrote FTC Chairman Jon Leibowitz Monday urging the commission to investigate the Google WiFi controversy. The group has been critical of Google on a range of issues.

"Given its recent record of privacy abuses, there is absolutely no reason
to trust anything the Internet giant claims about its data collection policies," Consumer Watchdog's John Simpson said in the letter. He asked the FTC to "document what data Google has been gathering, for how long and what the company has done with it."

A new report from the Internal Revenue Service's inspector general said the agency failed to implement adequate security measures to protect sensitive data that tax professionals entered into a Web portal, Nextgov.com reported Monday.

A fiscal 2009 audit by the Treasury IG for Tax Administration showed tax professionals were able to transfer authorization to access the Registered User Portal to individuals who did not go through the standard checks for tax compliance, past violations of e-file requirements and criminal records. The IRS performs suitability checks when principals or officials of a tax firm apply for entry, but then allows them to delegate their access rights to others by filing for power of attorney, auditors found.

"Taxpayers expect the IRS to protect their personal data, and we believe the power of attorney document does not provide the same assurance as the suitability check," the IG stated. "Any individual can become a delegated user. Many of the delegated users may have questionable backgrounds."

The audit found there were 9,988 delegated users permitted to file income tax returns electronically through the portal. About 6,500 of them also had access to electronic services that enabled them to retrieve and manipulate taxpayer data.

In addition, the IRS allows authorized users to assign a special principal consent privilege to a delegated user, which lets that user to extend his or her privileges to others.

"A delegated user could steal taxpayer data for identity theft purposes and grant access to other unscrupulous individuals," the IG said. To read more, click here.

A new report released Tuesday claims alcohol beverage companies are using new technologies such as social media, mobile phone applications and online videos to target youth.

The report, conducted by the Center for Digital Democracy and the Berkeley Media Studies Group, highlights several examples to try to prove its case that firms are targeting youth by using the communication tools they use most. For example, the report begins by examining beer maker Heineken's efforts to boost its brand among Puerto Rican youth. It created a virtual online luxury development where "the price to acquire a piece of this property wasn't cash--it was attention, time, and engagement with the brand." Users could receive real-world welcome kits where the "keys" to their virtual world also served as bottle openers. The campaign also offered a free e-mail service with a Heineken-related Internet address known as "heicity.com."

Another example highlighted in the report was a free iPhone app offered by Malibu rum that allows users to bowl in a rum shack or on the beach using virtual Malibu bottles as pins.

While the report provides several examples of the beer and alcohol industry's online media marketing efforts, it does not provide any examples of how these campaigns specifically target underage users. Center for Digital Democracy Executive Director Jeff Chester, who helped author the report, acknowledged this point but added that the report is aimed at providing a "wake-up call" for the FTC, health professionals and the industry "to tread carefully in how they use this arsenal of powerful online marketing tools."

The report notes that beer and alcohol companies adhere to a self-regulatory regime that bars marketing to those under the drinking age. "Age verification is one of the principal methods for shielding under-age youth from alcohol advertising in the online media," according to the report. "But in the new digital environment, such mechanisms are not only inadequate but increasingly irrelevant."

The Beer Institute, an industry trade group, said in a statement that beer companies "are adamantly opposed to illegal underage drinking and alcohol abuse. Our members direct their advertising to adults of legal drinking age in accordance with the Beer Institute's Advertising and Marketing Code," which requires that ads be placed in outlets where at least 70 percent of the audience is expected to be 21 and older. It also noted that it has spent nearly three-quarters of a billion dollars "promoting responsibility and fighting underage drinking."

"Independent sources, such as the Roper Youth Report, have consistently shown over the past decade that parents, not advertising, are the greatest influence on children's decisions about drinking," added the institute.

Distilled Spirits Council Vice President Lisa Hawkins said in a statement that "distilled spirits companies adhere to a rigorous set of content and placement guidelines for advertising and marketing materials in all media including online and digital communications channels. The spirits industry's longstanding commitment to responsible advertising regardless of the medium has been commended by the FTC and industry watchdogs."

A coalition of big tech firms that oppose the latest version of a Senate patent overhaul bill said Monday they back a stand-alone measure that would allow the Patent and Trademark Office to set its own fees.

The House Tuesday is set to take up the bill, drafted by House Judiciary Chairman John Conyers, D-Mich., that would give the PTO fee-setting authority.

In a letter Monday to House Speaker Nancy Pelosi, D-Calif., and House Minority Leader John Boehner, R-Ohio, the Coalition for Patent Fairness noted the huge backlog - more than 750,000 - of patent applications awaiting examination and said allowing the agency to set its own fees, using an appropriate rulemaking process, will give the agency the resources it needs to reduce the time it currently takes innovators to obtain a patent.

The coalition's support comes on the same day that two other groups that back the broader compromise patent overhaul measure offered by the Senate Judiciary Committee's leaders came out against the stand-alone fee setting bill because it does not include language barring the diversion of PTO fees for other government activities. The Coalition for Patent Fairness agrees this is an important concern but said the PTO's need for additional funding outweighs the issue. In the letter, the coalition said the PTO's need for additional funding should not be held back by those who favor a broader patent overhaul bill.

"Some oppose this simple, common sense legislation on the ground that it is limited to
providing needed funds to the PTO and does not include other proposed reforms of the patent system that supposedly have received 'widespread support,'" the coalition said. "...Relief for the PTO--and for the thousands of companies and individuals unable to bring their inventions to market because of the agency's backlog--should not be held hostage to these other issues."

The coalition, which includes firms such as Apple, Google, Intel and Oracle, supported the patent overhaul bill approved by the Senate Judiciary Committee last year, but pulled that support after Senate Judiciary Chairman Patrick Leahy, D-Vt., and ranking member Jeff Sessions, R-Ala., unveiled a compromise package in April that made several changes aimed at bringing some lawmakers and groups on board.

Conyers, House Judiciary ranking member Lamar Smith, R-Texas, and other House Judiciary members have been negotiating with their Senate counterparts in an effort to address many of the same issues raised by the coalition, but so far the talks have yet to yield a deal. Conyers noted this lack of progress during a hearing earlier this month at which he said he was considering drafting a stand-alone PTO fee-setting bill.

The administration of then-President George W. Bush failed to archive 83 percent of e-mails for 21 days during a two-year period, according to watchdog groups that retrieved the information in lawsuit settlements.

Nextgov.com reported that Citizens for Responsibility and Ethics in Washington and the National Security Archive filed a lawsuit against the Bush White House in 2007 after discovering the administration could not account for millions of e-mails. In 2009, the Obama White House settled the case, agreeing to audit archived messages and those restored from backup tapes for 21 separate days between 2003 and 2005. Those days were identified as having a suspiciously low amount of e-mail traffic.

The comparison revealed that 83 percent of the e-mails on the backup tapes were not included in the archived collection and would have been lost if not for the lawsuits, the groups said Monday.

CREW, a government accountability group, and the National Security Archive, which releases declassified documents through the Freedom of Information Act, said they are concerned that more e-mails could be missing because the White House used flawed methodology to identify those days that had low volumes of e-mails.

The organizations sent letters on Monday to the U.S. Archivist, the White House counsel, the federal chief information officer, and the administrator of the Office of Information and Regulatory Affairs, asking them to resolve a governmentwide problem of poor e-mail management. To read more, click here.

At least two groups that favor overall patent overhaul legislation said Monday that they oppose a stand-alone bill that would allow the U.S. Patent and Trademark Office to set its own fees to pay for its operations, arguing the measure would not bar Congress from diverting some of those funds for other purposes.

The House is expected to take up the bill on Tuesday that would give the PTO fee-setting authority. The provision is in a broader compromise patent overhaul bill backed by the American Intellectual Property Law Association and the Coalition for 21st Century Patent Reform, which is made up of such companies as DuPont, General Electric, Motorola, Texas Instruments, and 3M. The broader patent reform bill is awaiting action by the full Senate.

Both AIPLA and the coalition said in separate statements Monday that while they back the idea of allowing the PTO to set fees to adequately fund its operations and improve the time it takes to review patents, they opposes the House bill because it does not include a provision that would prohibit PTO fees from being diverted for other government programs.

"We need legislation that guarantees that the fees paid by the users of the patent system are adequate to hire and train needed examiners and to provide them with the modern information technology necessary to conduct thorough examinations and grant valid patents. Unfortunately, the [PTO measure] is not that bill. Although it authorizes the USPTO to set fees to recover its estimated costs, it contains no safeguards to prevent those fees from being diverted to support other totally unrelated government programs," the coalition said in a statement.

AIPLA President Alan J. Kasper also said that the stand-alone bill "would essentially raise the fees paid by users to the USPTO while significant monies will be diverted unless something is done." He added that his group "supports a comprehensive approach to patent reform now working its way through the Congress, and not the piecemeal approach represented by this bill."

That broader effort, however, appears to be stalled. Key House Judiciary members including Chairman John Conyers, D-Mich., and ranking member Lamar Smith, R-Texas, unhappy with provisions included in a compromise Senate patent bill have been negotiating with the measure's authors, Senate Judiciary Chairman Patrick Leahy, D-Vt., and ranking member Jeff Sessions, R-Ala., but have yet to announce a deal.

A new report released Monday on Europe's digital economy found that information and communications technologies have driven half of the growth in productivity among the European Union's member states in the last 15 years.

The report released by the European Commission, the EU's regulatory arm, found 60 percent of Europeans use the Internet "regularly," with 48 percent reporting daily use. Europe still lags slightly behind the United States where 56 percent said they use the Internet every day. Still, one third of Europeans have never been online, a figure similar to the 32 percent of Americans who have never used the Internet, the report found.

Like in the United States, senior citizens, less educated and those with lower incomes were among those most likely to have not used the Internet. Fewer older Americans, 46 percent, have never been online compared with their counterparts in Europe, where 59 percent of those 55 and over have never used the Internet.

Nearly a quarter of Europeans reported having a "fixed" broadband subscription, the report found. The EU has set a 10-year goal for all its citizens to have access to high-speed Internet service of 30 Mbps or above. The report, however, showed the EU has a long way to go toward achieving this goal given that only 18 percent of broadband subscribers have service that is above 10 Mbps.

"Europe's digital economy is crucial to economic growth and prosperity. ICTs and high-speed Internet are as revolutionary in our lives today as the development of electricity and transport networks were over a century ago," EU Digital Agenda Commissioner Neelie Kroes said in a statement. "But we need support for further Internet development so that all citizens can benefit from the digital economy."

The U.S. Supreme Court Monday denied Cablevision's request for review of an appeals court decision requiring cable providers to carry local broadcast stations on their systems.

Without comment, the court denied a request to hear the case, allowing a decision by a New York federal appeals court to stand. Cablevision Systems Corp. sued the FCC after it said the cable provider must carry the signal of a home-shopping station on its Long Island service. Cable providers argue that the must-carry rules force them to drop more desirable programming to accommodate all broadcast stations in a market.

C-SPAN, which filed a brief in February in the case supporting Cablevision, said 12 million cables homes lost access to some or all of its programming in the 1990s because of the must-carry rule. In the Cablevision case, "the compelled carriage of WRNN sets up C-SPAN and other non-broadcast programmers to face the same fate again: risk being moved off of or dropped entirely from carriage on the most widely distributed tier of cable service," according to the brief.

But National Association of Broadcasters spokesman Dennis Wharton said in a statement, said in a statement, that the Supreme Court's move validates "NAB's longstanding assertion that must-carry rules protect the public's access to niche broadcast programming, including foreign language, religious and independent TV stations,"

A consumer advocacy group says Google's recent admission that it is collecting more data from WiFi networks than it previously disclosed highlights the need for federal regulators to more closely examine what data the Internet firm is collecting.

Consumer Watchdog once again raised its concerns about Google's data privacy practices after the firm acknowledged Friday in a blog post that it discovered the discrepancy during an audit of the WiFi data its "Street View" cars collect for use in location-based services such as Google Maps. The audit was requested by a German data protection official.

Despite a claim made in a blog post last month, the firm has been "mistakenly collecting samples of payload data" from open, or unsecured, WiFi networks, Google Senior Vice President of Engineering and Research Alan Eustace said in Friday's post. He added, however, that none of the data was used in a Google product.

"So how did this happen? Quite simply, it was a mistake," Eustace said. "In 2006, an engineer working on an experimental WiFi project wrote a piece of code that sampled all categories of publicly broadcast WiFi data."

He said Google plans to delete the data as soon as possible and is consulting with data privacy officials in the countries affected on how best to dispose of the data. In addition, it has stopped Street View cars from collecting WiFi data and has called for a third-party review of the software at issue.

"Once again Google has demonstrated a lack of concern for privacy," Consumer Watchdog Consumer Advocate John M. Simpson said in a statement. "Its computer engineers run amok, push the envelope and gather whatever data they can until their fingers are caught in the cookie jar. Then a Google executive apologizes, mouthing bafflegab about how privacy matters to the company."

He said the incident underscores the need for federal regulators to examine not just Google but all online firms' data collection practices. He also specifically urged the Justice Department and FCC to examine the Google WiFi incident.

From this morning's Earlybird:

• The Federal Communications Commission "will tackle five regulatory items at its monthly meeting on Thursday, but the elephant in the room -- Chairman Julius Genachowski's proposal to shift broadband from light to heavier regulation -- is not scheduled to be among them," CongressDailyAM (subscription) reports.

Sen. Amy Klobuchar, D-Minn., wrote the FCC Friday urging more attention to what she described as confusing cell phone bills and "poorly" outlined terms of service in mobile phone contracts.

She praised the FCC for its recent call for public comment on ways to alert customers before they run up high cell phone charges. "This so-called 'bill shock' concern is just one aspect of the broader problem of confusing billing practices and poorly outlined terms in cell phone contracts," Klobuchar said in a letter to FCC Chairman Julius Genachowski.

She also voiced concern again about mobile phone providers charging "outrageous early termination fees" to customers who cancel their contracts early. Klobuchar, who sits on the Senate Commerce Committee, has introduced legislation that would put limits on such fees. The FCC has requested information from wireless providers on the fees.

"I remain concerned that ETFs, at any price, are designed to prevent choice, limit competition and unfairly tie consumers to unsatisfactory contracts, and I urge you to carefully examine the contracts for each company," she said.

AT&T Friday applauded Rep. Rick Boucher's call for firms to bring their ideas to Congress for how to address their concerns with FCC Chairman Julius Genachowski's proposal to reclassify broadband service.

During a hearing before the Energy and Commerce Communications Subcommittee Thursday, Boucher, D-Va., chairman of the subcommittee, invited broadband providers critical of Genachowski's move to reclassify some aspects of broadband as a telecommunications service under Title II of the Communications Act to work with Congress on the "creation of a targeted set of principles to assure network openness."

"While we've said that we don't feel that the Communications Act of 1934 is the right vehicle to regulate dynamic 21st century technologies like the Internet, we do feel there are other more effective alternatives to fill the perceived void left by the court decision," AT&T Executive Vice President-Federal Relations Tim McKone said in a statement. "That's why we would be supportive of the narrowly-tailored legislative approach outlined by Chairman Boucher" and subcommittee ranking member Cliff Stearns, R-Fla.

In citing support for broadband providers' position on the issue, McKone noted that the Michigan legislature approved a resolution Thursday opposing the FCC's move to reclassify broadband. The resolution expressed concern that the FCC's move "will slow
investment in Michigan's Internet broadband infrastructure and jeopardize future job growth."

There are several tech and telecom-related events next week. Here are some of the highlights:

Tuesday:
FCC Chairman Julius Genachowski and Secretary of Energy Steven Chu will host a clean technology showcase at 2 p.m. at the FCC.

Wednesday:
The Commodity Futures Trading Commission will hold a 9:30 a.m. public hearing to consider the trading of contracts based on motion picture box office receipts and the re-establishment of the CFTC's Technology Advisory Committee.

The Internet Security Alliance (ISA) holds a discussion and feature film depictions on "Cyber Attacks: Movie Fiction or Real Life Fact?" starting at 5 p.m.

Thursday:
The House Oversight and Government Reform Committee will hold a hearing at 9 a.m. on the transition to the Networx contract for providing telecommunications, network, and information services to the federal government.

The FCC holds an open meeting at 10:30 a.m. to consider a proposed rulemaking on changes to the E-Rate program to make broadband more accessible to schools and libraries and a proposed rulemaking that would implement a provision from the FCC's national broadband plan that aims to "foster competition and broadband deployment by ensuring nondiscriminatory, just, and reasonable access to utility poles."

The Progress & Freedom Foundation will hold a briefing at 9 a.m. entitled, "Can Government Help Save the Press?" to examine the government's proper role in assisting struggling media outlets.

Friday:
The President's Council of Advisors on Science and Technology will hold a meeting beginning at 8:30 a.m. to discuss such issues as advanced manufacturing, health information technology, and science, technology, engineering, and mathematics education.

The Cato Institute holds a congressional briefing at noon on efforts to update the Electronic Communications Privacy Act.

House Small Business ranking member Sam Graves, R-Mo., isn't shy about sounding alarm bells over the dearth of high-speed Internet connectivity in rural areas -- especially in an election year, CongressDaily reported.

"There is a severe lack of appropriate infrastructure that limits many American communities, businesses, and families from gaining full access to these services," Graves said Wednesday during a committee hearing.

"Rural areas in many states are particularly likely to lack the infrastructure needed to allow them to benefit from this vital technology," he added while calling for a federal commitment to infrastructure investment that ensures broadband service reaches small businesses and rural communities.

But what he didn't mention is that he voted against last year's economic stimulus package, which created a $7.2 billion program of loans and grants designed to help bring broadband to rural America.

"I am appalled that Congress has passed along billions of dollars of debt to our children in legislation that will have little to no effect on our economy," Graves said on the day the House voted on the stimulus package. "Small businesses are the greatest engine of creating new jobs in our economy. Yet, this bill not only does not help small businesses, it hurts them by crowding out private investment."

Asked if his positions are inconsistent, a spokeswoman for committee Republicans emphasized that the stimulus package contained many other provisions that Graves opposed. To read more, click here. (Subscription required)

The Obama administration will open next week a Web-based forum to discuss a cybersecurity research and development agenda, according to a notice published in the Federal Register on Thursday.

Nextgov.com reported that the White House Office of Science and Technology Policy and the National Coordination Office for Networking and Information Technology Research and Development asked the public to submit comments for a "game change" initiative to boost the safety and security of the Internet, telecommunications and computer systems, according to the notice.

The administration wants to focus on three areas: to increase the cost of a cyber attack to the attacker; enable systems to operate in spite of threats; and to develop appropriate metrics and economic policies to encourage good security practices. Officials asked the public to consider submitting comments on how the three themes could be refined or enhanced, what are the challenges in achieving the goals, and how would outside groups support the three areas.

The forum opens May 19 and will receive feedback on potential private sector partnerships, possible research challenges and activities currently underway that support the effort's themes. Comments must be received by June 18.

The head of the U.S. Business and Industry Council and leaders of 16 conservative groups blasted the Senate Judiciary Committee's patent reform bill Thursday and urged Republican senators to block the measure from the Senate floor, CongressDaily reported.

"We urge you to place a hold on this bill until the provisions undermining basic property rights, economic freedom, the interests of small inventors, universities, and research consortia, and job creation are corrected," according to a recent letter sent to Senate Republicans and signed by U.S. Business and Industry Council President Kevin L. Kearns as well as officials with such groups as the Eagle Forum and the Traditional Values Coalition.

The groups argued that the Senate patent bill would "weaken the U.S. patent protections" and that if it cannot be fixed "so that it can be a consensus bill fully supported by small businesses, tech start-ups, venture capitalists, and universities, then preserving current law would be better than enacting" the bill.

Senate Judiciary Chairman Patrick Leahy, D-Vt., has been pushing for floor time for an amended version of the patent bill that passed his committee last year. Leahy and Judiciary ranking member Jeff Sessions, R-Ala., unveiled a compromise measure in March and argue that it should be able to pass the Senate with bipartisan support.

The nonprofit corporation that manages the Internet's address system has hired a pioneer in the development of modern cryptography to help head up its security efforts.

Whitfield "Whit" Diffie will serve as the Internet Corporation for Assigned Names and Numbers' vice president of information security and cryptography. He will be responsible for the design, development and implementation of security methods for ICANN-managed networks, the group said in a news release.

Diffie played a key role, along with Stanford University electrical engineering professor Martin Hellman, in the development of public-key cryptography, which helps users send sensitive information securely over insecure networks through the exchange of secret keys used to unlock encrypted files.

He most recently served as vice president, fellow, and chief security officer for Sun Microsystems, where he worked from 1991-2009. Sun was acquired earlier this year by Oracle. Before joining Sun, Diffie was manager of secure systems research for Northern Telecom and helped develop the group that would later become security solution provider Entrust.

"Whit Diffie brings an extraordinary intellect and immense professional achievements to ICANN, and his appointment reflects my strong commitment to improving ICANN's technical security," ICANN CEO Rod Beckstrom said in a statement.

From this morning's Earlybird:

• Federal Communications Commission chair Julius Genachowski "fired back Thursday at critics of his controversial proposal to subject broadband to additional regulation with a spirited defense of the agency's actions," CongressDailyAM (subscription) reports.

• "House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va.," on Thursday "invited broadband providers and other stakeholders unhappy with the FCC's proposal to reclassify some aspects of broadband as a telecommunications service to work with Congress to seek a legislative fix," CongressDailyPM (subscription) reports.

• "A House panel will hold a hearing next week to assess the" Veterans Affairs Department's "information security practices," The Hill reports. The department "has been the victim of two major data breaches in the last month that may put the personal data of hundreds of veterans at risk, according to a letter released Thursday."

The White House announced Thursday that the Web site that tracks the multibillion-dollar economic stimulus program is moving to a cloud platform, Nextgov.com reported.

The Recovery Accountability and Transparency Board said it will place Recovery.gov into an environment in which hardware and services are shared, and not owned by the government. Recovery.gov is the first governmentwide system to move to the cloud, the White House said.

Convincing federal agencies to move their networks to cloud computing has been one of the primary initiatives that the Office of Management and Budget has been pursuing. OMB officials say the practice can save the government billions of dollars. By transferring Recovery.gov to cloud services, OMB says the government will save $750,000 this budget cycle "and significantly more savings in the long-term."

A laptop belonging to a contractor working for the Veterans Affairs Department was stolen earlier this year and the personal data on hundreds of veterans stored on the computer was not encrypted, a violation of a VA information technology policy, said the top-ranking Republican on the House Veterans Affairs Committee.

Nextgov.com reported the VA reported the theft of the laptop from an unidentified contractor to the committee on April 28 and informed members the computer contained personally identifiable information on 644 veterans, including data from some VA medical centers' records, according to a letter Rep. Steve Buyer, R-Ind., sent to VA Secretary Eric Shenseki.

The data was not encrypted, which would have prevented a thief from accessing the information, a requirement Congress and VA issued to all department contractors in 2006 after a laptop containing health data on more than 26 million veterans and their spouses was stolen from a VA employee's home. That laptop later was recovered.

After learning about the unencrypted laptop, Buyer investigated how many VA contractors might not be complying with the encryption requirement and learned that 578 vendors had refused to sign new contract clauses that required them to encrypt veteran data on their computers, an apparent violation of rules.

Buyer told Shinseki that his staff also had uncovered another recent theft of an unencrypted laptop from a separate contractor that he did not identify. This vendor had 69 contracts in more than half of the department's 21 regional medical networks operated by the Veterans Health Administration, and 25 of those contracts, more than a third, did not have a clause that required data be encrypted. To read more, click here.

The group that manages the Internet's address system announced Thursday more progress in its effort to implement internationalized Internet addresses with the implementation of changes that will allow users to type domain names using Cyrillic letters.

Internet Corporation for Assigned Names and Numbers President Rod Beckstrom announced Thursday that Internet addresses, also called domain names, using the Russian Federation's country-code domain name, .rf, can now be written using Cyrillic letters. Prior to this change, users were required to write the actual domain - the letters to the right of the dot - using Latin script. So now instead of having to type .rf when writing a Cyrillic address name in their Web browsers, Russians will be able to use the Cyrillic character "рф."

Up until now, technical constraints have forced users in other countries to type in Latin characters for the last part of a domain even if the actual name of a Web site was written in Cyrillic or some other non-Latin characters. Last week, the first non-Latin character domain names went live allowing those who speak Arabic to write some Internet addresses in their native language characters.

"Internationalized domain names will open the door to those whose primary language is expressed in a non-Latin script, such as Russian speakers who use Cyrillic," Beckstrom said during a speech in Moscow Thursday to the Russian Internet Governance Forum.

House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., Thursday invited broadband providers and other stakeholders unhappy with the FCC's proposal to reclassify some aspects of broadband as a telecommunications service to work with Congress to seek a legislative fix, CongressDaily reported.

FCC Chairman Julius Genachowski announced last week he was launching a proceeding to apply a limited number of provisions under Title II of the Communications Act to broadband, which is currently treated as a lightly regulated information service under Title I. Genachowski's move follows a federal appeals court decision last month that put the FCC's authority over broadband into doubt.

"The commission has adopted a limited approach to assuring network openness," Boucher said during a subcommittee hearing on broadband adoption. "If broadband providers differ with the approach of the FCC in applying six of 48 sections of Title II to broadband, our door is open. We would be pleased to discuss with broadband providers and the proponents of network neutrality the creation of a targeted set of principles to assure network openness."

After the hearing, Boucher said he believed such a consensus was possible despite the heated rhetoric surrounding the debate over reclassification.

While blasting Genachowski's move to reclassify broadband, House Energy and Commerce Communications Subcommittee ranking member Cliff Stearns, R-Fla., backed Boucher's call to invite feedback from critics, saying Congress needs to retain its jurisdiction over the Internet. To read more, click here. (Subscription required)

Some Republicans on the House Energy and Commerce voiced skepticism Thursday about the need to promote broadband adoption and access, saying current levels of adoption show that government intervention is unnecessary.

During a Communications Subcommittee hearing on the FCC's national broadband plan and ways to expand high-speed Internet access and adoption, Energy and Commerce ranking member Joe Barton, R-Texas, was especially blunt: "With all do respect, I don't think we need a government program to get more broadband."

Describing the broadband plan as a "solution looking for a problem," Barton argued that we already have a "broadband deployment plan, it's called free enterprise." Citing figures that show 95 percent of Americans have access to broadband, he added that the other 5 percent who lack access most likely live in rural areas and probably wouldn't want broadband even if it was offered to them.

Subcommittee ranking member Cliff Stearns, R-Fla., also questioned the call for action to address broadband adoption and access. He also noted the U.S. 95 percent access rate and the 65 percent adoption rate and saying "we don't have a deployment or adoption problem. The internet seems to be working pretty good."

Rep. Marsha Blackburn, R-Tenn., echoed this point, saying "Any rational observer could see we do not have a significant deployment or adoption problem," she said. She added, however, that "we're always looking for ways to improve on this."

Democrats and some of the hearing's witnesses disputed such claims, noting that many Americans who may have access do not subscribe because it is too expensive or they don't understand how it could benefit their lives. Supporters of the FCC broadband plan also note that most Americans do not have much of a choice of providers, with only one or two firms serving most parts of the country that currently enjoy broadband access.

"In today's economy, the Internet has become a necessity not a luxury," said Rep. Doris Matsui, D-Calif. She has sponsored a bill that would extend two FCC programs that subsidize telephone service to include broadband, a recommendation also included in the FCC's broadband plan. Subcommittee Chairman Rick Boucher, D-Va., said he would likely include the proposal in a universal service reform bill he is drafting and hopes to mark up "soon."

Howie Hodges with One Economy, which has worked to improve broadband access and adoption in underserved areas, said his group's experience shows that once low-income residents learn about its benefits and begin using broadband, they will opt to pay for it if it is offered at a reduced rate.

House Science and Technology Committee Chairman Bart Gordon, D-Tenn., Thursday blasted what he described as a "cynical" motion to recommit offered by Republicans and passed on a 292-126 vote to legislation that would reauthorize a law aimed at doubling basic research funding at key science agencies with the hope of boosting U.S. competitiveness.

Gordon said the motion offered during House debate on the measure would "gut" the bill, known as the America COMPETES Act, by reducing authorized funding levels to 2010 levels and reauthorizing the measure for three years instead of five while cutting some provisions such as the Energy Department's ARPA-E program aimed at funding high-risk, high-reward energy research. It also included langauge banning federal employees who have been disciplined for downloading, viewing, or exchanging pornographic material from receiving a taxpayer salary.

"It's absurd, specious and it's disgusting," Rep. Brian Baird, D-Wash., chairman of the Science and Technology Energy and Environment Subcommittee said of the porn language in the motion, offered by Science and Technology ranking member Ralph Hall, D-Texas. Gordon and Baird claimed at a news conference that the porn language was added to provide fodder for election year television ads against Democratic incumbents. Gordon said after it appeared the motion would pass, he urged Democrats to vote for it so the measure couldn't be used against them this fall.

The committee approved the bill last month on a bipartisan vote, Gordon noted and it is widely backed by business, technology and other groups. Baird said that the measure would provide the "seed corn" for tomorrow's innovations and jobs and that Republicans didn't just "eat the seed corn, they smashed it up."

Gordon said he will push to bring the bill back to the floor and urged those groups that have endorsed the measure such as the U.S. Chamber of Commerce, National Association of Manufacturers and Business Roundtable to push Republicans to back the bill when it comes back to the floor.

Hall and other Republicans have complained that while they support the bill's goals, the reauthorization was too expensive. Hall also raised concerns about the bill's shift in priorities and what he said was the inappropriate use of federal funding in some of the bill's programs.

"I remain committed to the underlying goals of the America COMPETES Act and believe that we should continue to prioritize investments in basic research and science, technology, engineering, and mathematics education," Hall said in a statement. "However, this bill spends too much money and goes far beyond the original intent and scope of the COMPETES legislation."

A federal judge has handed the recording industry a major victory with a ruling Tuesday that found peer-to-peer file-sharing service LimeWire liable of inducing copyright infringement.

In her decision granting summary judgment, U.S. District Court Judge Kimba Wood of New York found LimeWire was liable for copyright infringement that occurred through the use of its services. "The evidence establishes that LimeWire users have infringed plaintiffs' copyrights," Wood wrote. "Second, the evidence demonstrates that LimeWire users employed LimeWire to share and download the recordings without authorization."

Recording Industry Association of America Chairman and CEO Mitch Bainwol hailed the decision Wednesday as "an important milestone in the creative community's fight to reclaim the Internet as a platform for legitimate commerce. By finding LimeWire's CEO personally liable, in addition to his company, the court has sent a clear signal to those who think they can devise and profit from a piracy scheme that will escape accountability."

Public Knowledge Deputy Legal Director Sherwin Siy said while the court's decision is "on the whole not unreasonable," the group is "troubled when this court, or any court, tries to determine whether infringement has taken place based on the technical capabilities of a product or service. Our goal, as we and others expressed in an amicus brief, is that technological innovation should be protected."

House Minority Leader John Boehner, R-Ohio, and Minority Whip Eric Cantor, R-Va., wrote President Obama Wednesday urging him to block the FCC from proceeding with an effort to reclassify some aspects of broadband as a telecommunications service, saying the move will hinder the nation's economic recovery.

The letter was sent in response to FCC Chairman Julius Genachowski's decision last week to launch a proceeding that would reclassify the transmission component of broadband service as a telecommunications service under the Title II provisions of the Communications Act. Genachowski has described the effort as a "third way" approach between those who favor applying most of Title II to broadband and broadband providers who favor the status quo. An appeals court ruling last month put the FCC's authority over broadband in doubt.

Supporters of the FCC's move say it will ensure the commission can implement its national broadband plan and pursue network neutrality rules that would bar broadband providers from discriminating against content. Broadband providers argue the FCC is taking a radical step that will hamper broadband investment and innovation. Free-market groups like Americans for Prosperity have branded the FCC effort as a "government takeover of the Internet."

"We are writing to respectfully urge immediate reconsideration of your administration's plan for federal regulation of the Internet, and to warn that implementation of such a plan will needlessly inhibit the creation of American private sector jobs, limit economic freedom and innovation, and open the door to Internet taxation," Boehner and Cantor wrote.

Like other GOP lawmakers, Boehner and Cantor argue that if, as the FCC has asserted, the appeals court ruling has hampered the commission's ability to implement its national broadband plan, Genachowski should seek additional authority from Congress. "Instead, the chairman has chosen a politically-motivated end-run around both the courts and the Congress to implement his network neutrality regulations," they wrote.

While the commission is considered an independent government body, the FCC chairman and the FCC's four other members are picked by the president. In addition, Obama has said he supports network neutrality rules.

The House cleared legislation Wednesday that would renew the law governing the retransmission of broadcast television content by satellite companies such as DIRECTV and the DISH Network.

The legislation, which the House passed by voice vote, now heads to President Obama's desk. It would renew for five years the statutory licenses, set to expire at the end of the month, that allow satellite TV companies to retransmit broadcast stations to their customers. The measure also aims to modernize and simplify the licenses and encourage satellite providers to make more local content available, according to a statement from Senate Judiciary Chairman Patrick Leahy, D-Vt.,

"This is a good bill that will preserve and improve the service that customers across the country are accustomed to receiving, and I am pleased that it will finally be signed into law," said Leahy, who authored the bill.

The DISH Network said in a news release that the bill clears the way for the company to be the first satellite TV provider "to make local broadcast stations available in every television market in the United States."

A rhetorical war appears to be breaking out between the free-market group Americans for Prosperity and the public interest group Free Press over FCC Chairman Julius Genachowski's decision to reclassify some aspects of broadband as a telecommunications service.

Genachowski announced last week that he was launching a proceeding to subject the transmission component of broadband service to Title II provisions under the Communications Act.

AFP said Tuesday that it was launching a $1.4 million ad campaign to oppose the effort, claiming the FCC is attempting a government takeover of the Internet. The campaign's first television ad aims to link the FCC proceeding to federal government bailouts of the banks, insurance giant AIG and the auto industry and urges viewers to oppose the FCC's plan. "First it was the banks, then insurance, then the car companies, then health care. Now Washington wants to spend billions to take over the Internet," the ad says.

Free Press shot back Wednesday claiming AFP is an "AT&T front group" aimed at blocking efforts to protect consumers and implement network neutrality rules that would bar broadband providers from discriminating against Internet content. Groups like Free Press urged the FCC to reclassify broadband as a telecommunications service after a federal appeals court ruling last month cast doubt over the FCC's authority over broadband.

"Net Neutrality is the opposite of a government takeover of the Internet. But the truth is irrelevant to front groups like AFP, which think that if you lie often and loudly enough, you can brand any issue as its opposite," Free Press Research Director S. Derek Turner said in a news release.

Previously, AFP has claimed that Free Press has a radical left-wing agenda and was founded by someone who opposes capitalism. At its policy summit Tuesday, Free Press President and CEO Josh Silver described such claims as "McCarthyesque accusations" aimed at diverting attention from the debate over policy issues.

The Commodity Futures Trading Commission announced Wednesday that it will hold a hearing next week to examine concerns over proposals to create futures exchanges based on movie box office receipts.

In a news release, the CFTC said it would hold a public meeting on May 19 to "consider issues related to the trading of futures and binary options based on motion picture box office receipts." Officials from the movie industry as well as from the two firms, Media Derivatives and Cantor Futures Exchange, seeking to offer such exchanges are expected to testify at the hearing.

The CFTC has already backed applications from Media Derivatives and Cantor Futures Exchange to be contract markets, the first step in their bid to create movie futures exchanges. The CFTC, however, has yet to approve futures contracts that would be traded on such exchanges.

Supporters argue that such exchanges will assist the industry by expanding the depth and number of financing sources available to the industry and offers an opportunity to hedge against the high risk of making movies.

The movie industry staunchly opposes such exchanges and has found sympathetic ears on Capitol Hill where several lawmakers have expressed concern with the exchanges. A ban on movies futures exchanges is included in Senate financial regulatory legislation.

In its latest filing with the CFTC, filed Tuesday, a coalition of movie industry groups including the Motion Picture Association of America argued that movie futures are not a "commodity," that they cannot be accurately priced, that the movie industry does not plan to use the futures contracts for hedging purposes, that movie futures are susceptible to manipulation and insider trading, and will harm the industry by possibly depressing box office receipts because of the perception of a movie's quality based on the price of a future.

A new report released Tuesday by a nonprofit coalition of public and private research universities highlights 100 companies that got their start as a result of federal investments in basic science research.

Among the companies flagged by the report as having gotten their start as a result of federal research dollars was Google, which was started in part with support from grants from the National Research Foundation. Google, which was originally named BackRub, began as a research project by Google co-founder Larry Page and was soon joined by Sergey Brin while they were both doctorate students at Stanford University, according to the report from the Science Coalition.

Other companies that sprang from federally supported basic research include Genentech and Sun Microsystems, which was acquired by Oracle in January. Sun was started by Bill Joy, a doctoral student at the University of California at Berkeley, Andreas Bechtolsheim, a doctoral student at Stanford University, and two graduates of the Stanford business school, Vinod Khosla and Scott McNealy. Sun was based on the Stanford University Network (SUN) workstation engineered by Bechtolsheim and funded by the Defense Department's Defense Advanced Research Projects Agency, which helped fund the development of the Internet.

"Were it not for the federally supported research, these companies - their products and services, and the jobs and economic growth that have resulted - likely would not exist," the coalition said on its Web site.

The coalition released the report to highlight the importance of federal research. The House is expected to take up a bill to reauthorize the America COMPETES Act on Wednesday or Thursday. It would reauthorize the act for five years and authorize about $82 billion for the bill's programs with the aim of doubling funding by 2017 for research and development activities at the National Science Foundation, National Institute of Standards and Technology, and the Energy Department's Office of Science.

The report is a "timely reminder, as the House prepares to consider the America COMPETES Reauthorization Act this week," House Science and Technology Chairman Bart Gordon, D-Tenn., said in a statement on the report. The bill "will keep our basic research programs on a path to doubling, spur innovation, and help ensure that all students have a strong grounding in math and science. We need these investments to help ensure that the next Google is created here in the U.S."

House Energy and Commerce Communications Subcommittee ranking member Cliff Stearns, R-Fla., introduced legislation Tuesday that would require the FCC to conduct an analysis that proves there is a need before it could impose regulations on Internet access services.

"Net regulation will discourage investment and innovation precisely when we need it most, especially in light of our push to increase broadband deployment," Stearns said in a news release. "The FCC should not stand in the way of Internet innovation and expansion."

Stearns said he acted in response to FCC Chairman Julius Genachowski's decision last week to launch a proceeding that would reclassify the transmission component of broadband service as a telecommunications service under the Title II provisions of the Communications Act. Genachowski has described the effort as a "third way" approach between those who favor applying most of Title II to broadband and broadband providers who favor the status quo. An appeals court ruling last month put the FCC's authority over broadband in doubt. Genachowski said his approach will ensure the FCC can preserve an open Internet and implement the commission's national broadband plan aimed at enhancing broadband access and adoption.

Before it could impose regulations on Internet access services, the FCC would be required under Stearns' bill (H.R. 5357) to conduct an analysis that found there is a "market failure" that is "causing specific, identified harm to consumers by preventing a substantial number of consumers nationwide from accessing a substantial amount of lawful Internet content, applications and services of their choice on a continuing basis" and that regulations would address these problems.

Broadband providers and groups that represent them were quick to praise Stearns' bill. "We applaud Rep. Stearns for drafting a bill designed to address the dynamism of the Internet while protecting consumers from harm," AT&T Executive Vice President of Federal Relations Tim McKone said in a statement. "As the FCC proceeds down the path of regulating the Internet by applying 75 year-old laws developed for the black rotary telephone, we are hopeful that the Congress will take a more prudent path."

The wireless industry group CTIA, the National Cable and Telecommunications Association and the U.S. Telecom Association also applauded the legislation in separate statements. "This legislation recognizes that unprecedented government regulation of the Internet must be a measure of last resort and that our nation's broadband future depends on continuing policies that promote private investment," NCTA President and CEO Kyle McSlarrow said.

Sen. Byron Dorgan, D-N.D., Tuesday pushed back against groups claiming that FCC Chairman Julius Genachowski's recent call to reclassify some aspects of broadband as a telecommunications service is a "government takeover of the Internet."

During a speech at a policy summit sponsored by Free Press, Dorgan blasted a new coalition of groups led by Americans for Prosperity, which announced Tuesday it was launching a $1.4 million television advertising campaign aimed at blocking what it claims is the FCC's attempt to regulate the Internet.

The pushback comes after Genachowski announced Thursday that he was launching a proceeding to reclassify some aspects of broadband as a telecommunication service under Title II of the Communications Act. Broadband currently is treated as an information service under Title I. The move comes in the wake of an appeals court ruling last month that put the FCC's authority over broadband into doubt. Public interest groups and others urged Genachowski to reclassify broadband under Title II to ensure the FCC can proceed with its network neutrality rules that bar providers from discriminating against content and implement its national broadband plan.

Dorgan, a member of the Senate Commerce Committee, noted that the federal government created the Internet and that the Internet flourished under nondiscrimination rules, which he said vanished under former FCC Chairman Michael Powell during the administration of George W. Bush.

Genachowski's "determination to recreate nondiscrimination rules is not an attempt to take over the Internet," Dorgan argued. The idea that it's a government takeover is "part of the big lie that so permeates our debate now," adding that similar false messages were put out about health care reform.

The FCC Tuesday said it is launching an initiative aimed at finding ways to help consumers avoid running up charges on their wireless phone bills.

The FCC issued a public notice seeking input on ways to alert consumers about potential high charges before they add up. Among the ideas the FCC is weighing to address "bill shock" is a technical solution similar to one mandated by the Europe Union to alert consumers so they can avoid the problem.

"There can be many causes of bill shock, including unclear or misunderstood advertising, unanticipated roaming or data charges, and other problems," Joel Gurin, chief of the FCC's Consumer and Governmental Affairs Bureau, said in a news release. "All can lead to charges that people don't expect to get." He noted that EU carriers are required to send text messages to their customers when they are running up roaming charges or nearing their data limits.

The FCC public notice is seeking comment on such issues as whether there are technologies or other problems in the United States that would prevent wireless providers from sending alerts similar to the ones deployed by European providers; the extent to which consumers are currently able to monitor their wireless usage; whether U.S. wireless providers currently use alerts and how much such systems cost; and the extent to which usage alerts are accessible to users who are blind, have low vision or another disability.

Despite reporting progress in combating the theft of business software, the overall rate of piracy increased two percentage points to 43 percent in 2009, according to the Business Software Alliance's annual global piracy study released Tuesday.

"Installations of unlicensed software on PCs dropped in 54 of the 111 individual economies studied, and rose in only 19," according to the study, which was conducted for BSA by the IT research firm International Data Corporation. "It is clear that anti-piracy education and enforcement campaigns spearheaded in recent years by the software industry, national and local governments, and law enforcement agencies continue to have a positive impact in driving legal purchases and use of PC software."

The study found that much of the increase in piracy is due to the rise of personal computer users in developing countries such as Brazil, China and India. So while the overall rate of piracy dropped in China from 80 percent to 79 percent in 2009, the total value of pirated software increased because of the boost in computer users, according to BSA President and CEO Robert Holleyman. The commercial value of pirated software increased in China by $900 million to $7.6 billion, the biggest increase of any other country measured, according to the study.

Holleyman said that piracy not only results in lost profits for software makers but also is a free trade issue. If firms in China are using pirated software, they are enjoying a trade advantage over U.S. businesses that pay for the software they need, he argued. "Any U.S. business competing with a competitor in China with a high-piracy rate is at an unfair competitive advantage," Holleyman said.

The United States has the lowest software piracy rate in the world at 20 percent. Despite this, given that the United States still has the highest number of computer users, the commercial value of pirated software was $8.6 billion in 2009, the study found. But Holleyman noted that China is expected to surpass the United States next year in the number of computer users, which may further drive up piracy rates there.

The study found that the industry made the greatest progress in combating piracy in Canada, Chile and India, where each country saw a 3 percentage point decline in their piracy rates in 2009. "Most of the piracy of business software occurs in otherwise legitimate businesses," Holleyman said, adding that the theft occurs when businesses copy a few legitimate copies for all the computers in their firm.

The 2009 study is the seventh piracy report that BSA has conducted. Studies such as this have come under fire by some fair-use advocates who say the levels and economic losses of piracy are overstated. A GAO study released in April found that "the illicit nature of counterfeiting and piracy makes estimating the economic impact of IP infringements extremely difficult, so assumptions must be used to offset the lack of data."

Holleyman said BSA and IDC added an additional factor to this year's study - the software load by country and how many software applications they believe are being used on each computer - in addition to the other data they use. The study examines how much PC software was deployed in 2009 and how much of that was legally bought. BSA also released a video outlining how it conducted the study.

From this morning's Earlybird:

• "Republican anger over" Federal Communications Commission "Chairman Julius Genachowski's proposal last week to subject broadband service to increased regulation has boiled over into legislative efforts to stall or block him," CongressDailyAM (subscription) reports.

• "The technology sector, a little-publicized but key player in the coalition that is pushing for an overhaul of immigration laws, is giving mixed reviews to the proposal that Senate Democrats recently unveiled," the Washington Post reports.

The State Department will lead a multiagency U.S. delegation to Moscow beginning Tuesday for talks with Russian communications officials on information and communication technology issues.

Philip Verveer, the State Department's coordinator for international communications and information policy, will be joined by FCC Commissioner Michael Copps and National Telecommunications and Information Administration chief Lawrence Strickling and other officials from those agencies for the roundtable discussion on ICT issues, the first such discussion since 2004, the State Department said in a statement.

"The delegation's mission complements and supports the U.S.-Russia Bilateral Presidential Commission with the goal of beginning a dialogue on a range of topics including broadband, Internet governance, cybersecurity, spectrum management, the analog to digital TV transition and coordination of positions for upcoming meetings at the International Telecommunication Union," the statement said. The talks are set to end Friday.

The leader of the House Oversight and Government Reform Committee says contractors responsible for recycling government computers and other electronic equipment are not held accountable to certification standards and environmental regulations, NextGov.com reported.

In letters last week to Environmental Protection Agency Administrator Lisa Jackson and General Services Administration chief Martha Johnson, House Oversight and Government Reform Committee Chairman Edolphus Towns, D-N.Y., expressed concern that the two agencies aren't doing enough to ensure the safe disposal of old computers and other equipment used by the government.

"I am concerned that the [GSA Federal Supply Schedule] does not adequately direct agencies toward companies with the highest e-waste recycling standards," Towns wrote. "I am also concerned that there may be a lack of direct oversight of e-waste recycling to ensure proper waste handling."

According to the Office of the Federal Environmental Executive, computer hardware has an average lifespan of seven years, but federal equipment typically is recycled after just three years. The government disposes of an estimated 500,000 computers annually. A 2008 Government Accountability Office audit found, despite EPA regulations, the companies responsible for e-waste often export electronics to developing countries, which dispose of them in unsafe conditions.

EPA has developed a responsible recycling, or R2, certification process for the safe disposal of e-waste. But only two of the 60 waste recycling contractors on GSA's Schedule 899-5 meet the R2 criteria, according to Towns. To read more, click here.

A group of U.S. and foreign trade associations filed comments with the Chinese government Monday once again voicing concerns with its "indigenous innovation" policy that they say favor Chinese companies over foreign operators.

In their comments with China's Ministry of Science and Technology, the U.S. and foreign associations argued that the proposed rule would in the long term lead to less innovation in China.

"These related policies, broadly linked to indigenous innovation, limit the types of products that are developed and used in China and exclude some of the most innovative suppliers, the associated R&D, and resulting innovation benefits to the Chinese market," according to the letter signed by such groups as the American Chamber of Commerce in China, Business Roundtable, Business Software Alliance, Consumer Electronics Association, the European Services Forum, the Information Technology Industry Council, TechAmerica and the U.S. Chamber of Commerce.

The groups called for some specific changes to the proposed rule such as outlining what policies firms must abide by to be certified by the Chinese government. But overall, the groups urged Chinese officials to rescind the proposed policy. "Given broad concerns about the absence of clarity around so many provisions in the draft notice, we respectfully urge [Chinese officials] not to publish the indigenous innovation product list and not carry forward this program," they wrote.

They also voiced concern with other Chinese policies that they say encourage or mandate procurement from Chinese suppliers; extend monetary or other benefits only to Chinese suppliers; and "provide preferences to products including 'Chinese' IP, or compel the transfer of or otherwise fail to adequately protect IP in non-Chinese products."

The groups also questioned whether such policies are in compliance with China's international trade obligations and pledges not to discriminate against foreign firms in its procurement policies.

In an interview Monday, BSA President and CEO Robert Holleyman argued that the proposed Chinese policy "is the most extreme example by any country to favor local innovative industries at the expense of multinational companies."

A coalition that includes firms that compete with Google says a proposed settlement aimed at allowing Google to create an online digital library violates U.S. treaty obligations aimed at protecting intellectual property.

The Open Book Alliance, which includes Google rivals Amazon.com, Microsoft and Yahoo as well as some smaller publishers and writers groups, Monday released an analysis of the proposed settlement between Google and the Authors Guild and the Association of American Publishers that claims the deal violates the Berne Convention's Protection of Literary and Artistic Works as well as the nondiscrimination provision of the World Trade Organization's agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The settlement, which was revised last fall, is aimed at resolving a class action lawsuit filed by the Authors Guild and APA against Google's efforts to digitize millions of books. It was revised last fall after the Justice Department raised concerns with the settlement.

"It would do so by imposing many of its most burdensome provisions on foreign rights holders who are not nationals of the United Kingdom, Canada or Australia - three countries whose nationals are unfairly given special treatment under the settlement," according to a memo prepared for the OBA by Cynthia S. Arato, a partner in the Macht, Shapiro, Arato and Isseries law firm.

The memo argues that approval of the settlement, which is pending before a U.S. district court judge in New York, may lead some countries to file a complaint against the United States with the WTO. It noted that both France and Germany filed amicus briefs in the case, alleging that it would "violate bedrock provisions of international copyright treaties."

The memo claims that the settlement violates the Berne Convention's provision granting copyright holders "exclusive rights" over their works by requiring them to opt out of the settlement and imposes a registration requirement that was repealed by Congress in order to comply with the treaty.

Google did not have an immediate response to the memo but has defended the settlement in the past saying the revised settlement will open "access to millions of books while providing rights holders with ways to sell and control their work online."

The Center for Digital Democracy is raising concerns about proposals at the Food and Drug Administration to allow pharmaceutical companies to market drugs on social media and other Web sites.

"We believe that the FDA must proceed very carefully as it works to develop
rules regarding digital media marketing of pharmaceutical products," CDD Executive Director Jeff Chester said in a letter Monday to FDA Commissioner Margaret Hamburg and Principal Deputy Commissioner Josh Sharfstein. "As my organization and other consumer groups stated in their comments, social media and digital marketing raise critical consumer protection concerns."

These concerns include whether there are adequate safeguards in place to protect consumers if firms use personal information to target drug-related online ads at consumers and about whether firms in marketing their products should be able to target consumers with e-mail, text messages, blast email or email list‐servs, chat rooms, or social networking bulletin boards that are operated by third parties. Chester also said the FDA needs to examine the relationship between some online medical information sites and their advertisers and also whether social media sites use "marketing applications that stealthily eavesdrop and analyze conversations by and among health consumers."

Noting that the FTC is currently working on a report related to online privacy, CDD also asked that the FDA work closely with the commission on the issue.

The FDA held a public hearing in February on whether to allow drug companies and other firms to use social media and other Internet tools to advertise for certain drugs and medical devices. The FDA has authority to regulate the labeling and advertising of prescription drugs and medical devices.

An FDA spokeswoman said the agency is in the process of evaluating comments and when it is done, it will "plan to issue one or potentially multiple draft guidances related to Internet/social media promotion of FDA-regulated medical products."

Google responded to concerns raised by privacy ministers from 10 countries, saying the Internet firm has tried to be transparent and give users control over how their information is used.

Last month, privacy commissioners from Canada, France, Germany, Israel, Italy, Ireland, the Netherlands, New Zealand, Spain and the United Kingdom wrote Google Chairman and CEO Eric Schmidt voicing concern that Google has failed to adequately ensure privacy in the rollout of its new products. They cited Google's launch of its social networking service Buzz as the most prominent example but also voiced concerns with Google Street View, which gives a panoramic, street-level view of various locations around the world.

In a letter Friday to the privacy commissioners, Jane Horvath and Peter Fleischer, both of whom serve as Google privacy counsel, argued that Google abides by five privacy principles: use information to provide valuable products to consumers; develop products that reflect strong privacy standards and practices; be transparent in how data is collected; give users choices about their privacy; and protect user data.

They also pointed to tools Google offers users such as its privacy center and Google Dashboard, which allows users to control data stored in their Google accounts.

"Google is committed to ensuring that privacy is designed into our products at every stage of the development cycle," Horvath and Fleischer wrote. "Respecting privacy is a part of every Googler's job."

In responding to the concerns about Google Buzz, they again acknowledged that Google "did not get everything 100 percent right." They added that Google worked fast to respond to user feedback, a point they said many of the privacy commissioners have acknowledged.

From this morning's Earlybird:

• "President Obama cited the influx of new technology as 'putting new pressures on our country and on our democracy' in a commencement address to graduates at Virginia's Hampton University on Sunday," The Hill reports.

• "The communications policy universe shifts to Los Angeles this week, where the annual Cable Show will feature a Thursday keynote by" Federal Communications Commission Chairman Julius Genachowski, CongressDailyAM (subscription) reports.

A letter that Rep. Jay Inslee, D-Wash., is circulating on Capitol Hill expressing gushing support for FCC Chairman Julius Genachowski's controversial proposal to subject broadband to tougher regulation wasn't written by the congressman.

How do we know? Digital fingerprints left by the author, Ben Scott, policy director of Free Press, a media watchdog.

It's common knowledge that advocacy groups and corporations routinely craft letters and even legislation for lawmakers. But it's not every day they leave behind a trail of evidence confirming the link. Such is the case with Scott, who forgot to scrub the so-called "metadata" -- yeah, I'd never heard of this either -- listing him as the author of the correspondence making the rounds on the Hill.

Such information can be found by going to "file" and then "properties" on an electronic document. Inslee wants to gather the signatures of supportive members by COB Wednesday before sending the letter to Genachowski.

"As legislators committed to expanding access to open, affordable, world-class broadband networks," reads the document, authored by someone who's never held elected office, "we have a very strong interest in promoting policies that can support these goals."

The FCC sided with anti-piracy groups on Friday in an order that will allow satellite and cable providers to encode content sent to set-top boxes with a signal preventing it from being distributed online. The FCC order granted a waiver to its rule against "selectable output control," which enables video programming to disable certain audio and video outputs on set-top boxes.

The Motion Picture Association of America hailed the order for making it possible to distribute movie programming that is still in theaters without as much of a risk of piracy. "This action is an important victory for consumers who will now have far greater access to see recent high definition movies in their homes," said Bob Pisano, MPAA president. "We deeply appreciate the recognition by the FCC that recently released movies need special protection against content theft when they are distributed to home televisions."

Consumer advocates had a different view, arguing that leaks from set-top boxes to the Internet have not been a problem and that the order grants providers too much power over the television experience. The decision will "allow the big firms for the first time to take control of a consumer's TV set or set-top box, blocking viewing of a TV program or motion picture," according to Public Knowledge president Gigi Sohn.

The Consumer Electronics Association also reacted negatively to the decision, arguing that it allows "any video copyright owner to unilaterally shut off video outputs on consumers' televisions." It raised the question of whether the FCC has ever allowed private entities "the right to disable consumers' products in their home," arguing that the order will allow motion picture studios take apart functioning products in service to a new business model.

The standoff over how to define "the Internet" got a little snarkier Friday when Free Press and AT&T exchanged shots in the ongoing rhetorical battle over whether regulating broadband access providers constitutes "regulating the Internet." It started when Free Press research director Derek Turner called AT&T out for what he saw as the company's inaccurate claim that the said that the FCC is on the brink of doing just that.

"AT&T is wrong on the facts," he said. "Contrary to what AT&T says, the FCC is not proposing to regulate the Internet and in fact has specifically disavowed the possibility. The 'Internet' is not the wires that deliver the content and applications, but the content itself. The FCC is not proposing to regulate CNN.com or hulu.com; it is merely placing light-touch rules of the road on the few powerful incumbents that control the duopoly broadband access market."

AT&T's Vice President of Federal Regulatory Affairs Hank Hultquist returned fire today on the company's blog, announcing "the Derek Turner contest for excellence in nonsensical abstractions." Hultquist holds that Turner's analogy is akin to saying "a swimming pool is not the floor and walls of the structure, but simply the water in it" or "a cannoli is not the pastry tube, but simply the cream inside." Hultquist promised the contest winner an iPad, "which may or may not include WiFi capability. After all, according to Mr. Turner, connectivity is just not part of the Internet."

Turner, for his part, doubted the draw of the prize. "Is it an iPad that operates on AT&T's network?" he asked. "If that's it, I don't want it."

In Thursday's election in the United Kingdom, the real winner may be Facebook, according to a company spokesman.

Some statistics offered by the company:

• 2 million people out of 26 million Facebook users in the U.K. used the "I Voted" counter on Facebook on Thursday. In 2008, about 5.5 million U.S. users clicked "I Voted."
• More than 200,000 people "liked" the Democracy UK page as Election Day neared.
• There were 180,000 votes in the Facebook/YouTube joint Digital Debates, with 5,300 questions put to party leaders.
• 68,622 added the vote badge app to their Facebook profile.
• 14,000 Electoral Commission forms were downloaded via Facebook.
• There were 480,000 votes in a Facebook Prime Minister poll.

In a new public relations effort launched Friday, FCC Chairman Julius Genachowski aims to quash the perception that he will "regulate the Internet" when his agency moves to change how it oversees broadband access providers in order to shore up its legal authority over net neutrality and National Broadband Plan policies.

In a YouTube video, Genachowski said his approach "does not involve regulating the Internet. It would preserve the freedom and openness of the Internet. It flows from a deep recognition that one of the Internet's greatest strengths--its unprecedented power to foster innovation and free speech--stems from the absence of any central controlling authority, either public or private. The approach should not and does not involve regulating the Internet."

The FCC Web site's new FAQ section, which discusses its so-called "third way" approach for policing phone and cable companies, also tackles the frequent criticism that the agency's oversight aspirations amount to regulating the Internet. The Web site says that the "core principle of the proposal is that the government must not regulate the Internet," making a distinction between the Internet and its "on-ramps," which it describes as "the transport component of broadband services such as DSL or cable modem services that consumers subscribe to from their phone and cable companies in order to access the Internet."

This description is hardly an uncontested one. In statements on the FCC's "third way" plan, critics ranging from House Minority Leader Boehner to AT&T's top lobbyist Jim Cicconi disputed Genachowski's notion that regulating network owners does regulate more than that. "Make no mistake--when it regulates the networks that comprise the Internet, the FCC is in fact, and for the first time, regulating the Internet itself," Cicconi said.

The rhetorical battle has substantive policy implications, as Genachowski's proposal places only the transmission component of broadband service under the "Title II" provisions of the Communications Act--without attempting to increase regulation over Internet companies who offer the services that run over the networks. But a large chorus of critics say this is a false distinction.

Barbara Esbin, a senior fellow at the Progress & Freedom Foundation, argued in a PFF forum Friday morning that because companies such as EarthLink and CompuServe sell integrated Internet service offerings, it would be a "high wire act" to distinguish between the transmission component of broadband service and other aspects of broadband service.

House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., is giving interested parties until June 4 to provide him with written comments on his draft privacy bill.

Before and after that time, he said he would be meeting with stakeholders from both industry and consumer organizations as he moves to finish a final draft. Boucher, who drafted the bill with subcommittee ranking member Cliff Stearns, R-Fla., said Thursday that he would make revisions to the draft based on stakeholder feedback "in order to build a broad consensus."

The draft, released on Tuesday, would require Web sites to inform users how they collect and use personally identifiable information. Generally, consumers would have to opt out of having such information collected, though it would mandate that users opt-in before Web sites could collect sensitive information such as financial and health data or share personally-identifiable data with some third-parties. Third-party ad networks, however, would be exempt from this opt-in requirement as long as they adhere to certain requirements.

Privacy groups were very critical of the draft bill, saying it doesn't do much to improve on the current self-regulatory system. They also oppose provisions that would pre-empt state laws and bar consumers from filing privacy-based lawsuits against firms.

Online firms such as Google and Yahoo praised the process. In a statement Wednesday, Yahoo said, "While there certainly remain some fundamental issues to be worked out to make sure that this legislation protects the extraordinary breadth of free services for consumers made possible by online advertising, Yahoo commends the hard work that Reps. Boucher and Stearns have done thus far and we are grateful that they have stated they are not looking to disrupt this business model with their legislation."

From this morning's Earlybird:

• "Legislation that would give federal workers the option to work from home ran into a significant roadblock Thursday, failing to get the two-thirds majority in the House that would have expanded telework options across the government," the Washington Post reports.

• Federal Communications Commission Chairman Julius Genachowski "on Thursday outlined a proposal for regulating the Internet that he described as a 'third way,' or middle ground between 'heavy-handed' regulation and a do-nothing approach that could hurt competition and leave consumers unprotected," the Wall Street Journal reports.

• House Minority Leader John A. Boehner, R-Ohio, "is using language from the just-completed healthcare debate to blast the FCC's attempt to rein in broadband providers," The Hill reports.

Not surprisingly the reaction from the other four members of the FCC to Chairman Julius Genachowski's decision Thursday that he plans to pursue a proceeding that would reclassify broadband as telecommunications service has fallen along partisan lines.

Genachowski announced that he would apply a limited number of provisions of Title II of the Communications Act to broadband to ensure the FCC has authority to implement its national broadband plan and protect consumers after its authority over such matters was cast in doubt as a result of an appeals court ruling last month.

Genachowski has described the approach as a "third-way" between the tougher approach favored by some public interest groups who wanted most of Title II's provisions to apply to broadband and the call from broadband providers to maintain the status quo.

The FCC's two Republican members, Robert McDowell and Meredith Baker, disputed the chairman's view that he has opted for a more moderate approach. They said such a change should be made by Congress and not the FCC, and as a result will likely lead to another defeat for the commission in the courts.

"This proposal is disappointing and deeply concerns us. It is neither a light-touch approach nor a third way," McDowell and Baker said in a joint statement. "Instead, it is a stark departure from the long-established bipartisan framework for addressing broadband regulation that has led to billions in investment and untold consumer opportunities."

Meanwhile, Democrats Michael Copps and Mignon Clyburn said they welcomed the move. Copps, however, said he would have preferred "plain and simple Title II reclassification through a declaratory ruling and limited, targeted forbearance--wiping the slate clean of all question marks. ... But we should welcome this step toward bringing broadband back under the Title II framework where it belongs."

Clyburn said she backs Genachowski's more limited approach. "If we truly support universal access to broadband ... then Title II authority is essential," she said in a news release. "The fact that the chairman has been able to find a way to accomplish this without unnecessary and burdensome regulations on industry means a victory for all parties."

The nonprofit group that manages the Internet's address system announced Thursday that the first non-Latin character domain names went live allowing those who speak Arabic to write some Internet addresses in their native language characters.

The Internet Corporation for Assigned Names and Numbers said the new Internet addresses, also called domain names, will apply to the country-code Internet addresses belonging to Egypt, Saudi Arabia and the United Arab Emirates. So if you are a business or organization in Egypt with an Internet address that ends with that country's top-level domain name, .eg or .مصر in Arabic letters, you can choose to have your entire Internet address written using Arabic letters. This means that users who want to access sites using those domain names will no longer have to switch to Latin characters when writing the actual .eg country code.

Up until now, technical constraints have forced users in other countries to type in Latin characters for the last part of a domain even if the actual name of a Web site was written in Arabic or some other non-Latin characters.

"This is the beginning of a transition that will make the Internet more accessible and user friendly to millions around the globe, regardless of where they live or what language they speak," ICANN CEO Rod Beckstrom said in a statement.

ICANN is currently weighing applications from 21 other countries or territories for internationalized domain names representing 11 different languages.

A group of Internet companies including Amazon, eBay, Google, Skype and Sling Media wrote FCC Chairman Julius Genachowski Thursday to voice their support for his decision to designate some aspects of broadband Internet access as a telecommunications service.

The move comes after last month's U.S. appeals court decision that found the FCC had overstepped its authority when it tried to enforce its open Internet principles against broadband provider Comcast for cutting off access to a file-sharing service. Those who favor network neutrality rules that would bar such practices said the only way the FCC could protect consumers and fully implement its national broadband plan aimed at expanding access and adoption of high-speed Internet services would be to reclassify broadband as a telecommunications service under Title II of the Communications Act. Internet services are currently classified as an information service.

FCC General Counsel Austin Schlick said Thursday that the commission would launch a proceeding that would seek to apply a limited number of the Title II provisions to broadband.

In their letter to Genachowski, about a dozen firms that also are members of the Open Internet Coalition said they applauded the "middle-ground approach" he has chosen to pursue. "We share your belief that this course will create a legally sound, light-touch regulatory framework that benefits consumers, technology companies, and broadband Internet access providers," the letter said. "This framework will ensure that consumers have access to an open Internet, one that would preserve a level playing field for all participants."

Broadband providers and some congressional Republicans including House Minority Leader John Boehner, R-Ohio, House Energy and Commerce ranking member Joe Barton, R-Texas, and others blasted Genachowski's move.

FCC Chairman Julius Genachowski said Thursday he will launch a proceeding to regulate broadband access providers under a more stringent regime now used for telephone services under Title II of the Communications Act, CongressDaily reported.

The agency will simultaneously seek to limit how Title II applies to these providers by stripping away rules unnecessary to its policy agenda, which aspires to enforce net neutrality rules and expand broadband access.

The agency will not impose "the vast majority of Title II's 48 provisions to broadband access services," FCC General Counsel Austin Schlick said in a statement. These are likely to include price controls, considered among the most onerous regulations under Title II.

"I am pleased the general counsel and staff have identified a 'third-way' approach -- a legal anchor that gives the commission only the modest authority it needs ... while definitively avoiding the negative consequences of a full reclassification and broad application of Title II," Genachowski said.

Broadband access providers reacted negatively to the plan after weeks of lobbying the agency against any change in regulatory classification. They argued that the FCC can carry out many of its goals under existing statutory authority.

Verizon's top lobbyist, Tom Tauke, said the FCC's approach "is legally unsupported," adding that "the regulatory and judicial proceedings that will ensue can only bring confusion and delay to the important work of continuing to build the nation's broadband future." To read more, click here. (Subscription required)

The European Commission Thursday adopted harmonized technical rules for its member states aimed at avoiding interference as part of its efforts to boost the deployment of high-speed wireless Internet services.

Like in the United States, European spectrum is being freed up as part of many EU member states' conversion from analog to digital television. Those countries that choose to use this newly available spectrum for wireless broadband must apply the "harmonized technical rules" adopted by the commission for the 800 megahertz frequencies, the commission, the European Union's regulatory arm, said in a statement.

While the commission is not requiring that member states use the spectrum freed up by the digital conversion for wireless broadband, it said it is considering such a move. The commission estimates that "coordinated management of this spectrum" could provide an economic boost worth up to 44 billion Euros ($55.8 billion) and help the EU achieve its goal of ensuring all its citizens have access to broadband Internet service by the end of 2013.

Telecommunications industry experts say the infrastructure needed to provide mobile broadband in the 800 megahertz frequencies is about 70 percent cheaper than the systems needed to provide third-generation mobile technology using other frequencies, the commission added.

"This decision paves the way for implementation of innovative broadband technologies and for the fast growing demand for wireless services to be met," EU Digital Agenda Commissioner Neelie Kroes said in a statement. "I encourage member states to take the necessary steps to implement the decision, so that European businesses and citizens can take full advantage of the benefits of the switchover to digital TV."

The FCC has extended the deadlines for filing comments on whether the commission should approve Comcast's proposed merger with NBC Universal.

In a notice Wednesday, the FCC said stakeholders would now have until June 21 to file comments, while response and opposition petitions are due July 21. Final comments are due Aug. 5. The original deadline called for stakeholders to file initial comments by May 3 and final comments were due June 17.

Last month, the FCC's Media Bureau suspended these filing deadlines to allow stakeholders additional time to comment on two economic reports that the commission had asked Comcast and NBC Universal to file providing economic analysis of the benefits of the merger and one addressing the potential impacts of the deal on the online video distribution market. The two firms filed the two reports this week.

"To ensure that interested parties would have adequate time to review and comment on these supplemental materials, the bureau concluded that the filing deadlines should be suspended until the applicants had submitted the additional reports," the FCC notice said.

Both the FCC and the Justice Department are reviewing combining Comcast, the nation's largest cable television company, with the programming power of NBC Universal, which controls a major broadcast network, a Hollywood studio and several cable networks. Under the deal, Comcast would own a majority stake in NBC Universal.

From this morning's Earlybird:

• Federal Communications Commission Chairman Julius Genachowski "will announce a potential breakthrough today that could resolve a heated dispute over how the agency should regulate broadband after a federal appeals court ruling that gutted its authority to govern the technology," CongressDailyAM (subscription) reports.

• Facebook "temporarily shut down its instant-messaging function while it investigated" a glitch allowing users access to their friends' private instant messages, the Wall Street Journal (subscription) reports.

Network Neutrality supporters praised reports Wednesday that FCC Chairman Julius Genachowski has decided to reclassify some aspects of broadband service as a telecommunication service, a move expected to give the commission more authority over broadband.

The move comes after the commission's authority over broadband providers was put in doubt in the wake of a Court of Appeals' ruling last month that found the FCC overstepped its authority in enforcing network neutrality principles against Comcast. Many observers and even the FCC said the decision would make it difficult for the FCC to implement some aspects of the national broadband plan.

In a statement, Senate Commerce Communications Subcommittee Chairman John Kerry, D-Mass., said he had talked with Genachowski Wednesday about his decision and praised the FCC chief for taking a "measured middle path" to address the issues left in the wake of the Comcast ruling. While saying he supports Genachowski's move, Kerry said he is open to working with the FCC, lawmakers and other stakeholders on legislation related to the FCC's authority.

"This change of classification is a moderate, pragmatic step necessary to ensure that the FCC can keep faith with its core mission," Kerry said. "The commission still must build a factual record showing that its reclassification is well-reasoned, and I look forward to that process and to hearing from all stakeholders."

Senate Commerce Chairman John (Jay) Rockefeller D-W.Va., and House Energy and Commerce Chairman Henry Waxman, D-Calif., wrote Genachowski Wednesday urging him to consider classifying broadband as a telecommunications service under title II of the telecommunications act. Internet access is currently classified as a more lightly regulated information service.

Public interest groups and others who favor rules that would require broadband providers to treat all content the same applauded the move, but added that they want to ensure the proposal goes far enough to protect consumers.

"This is a welcome announcement," Public Knowledge President Gigi Sohn said in a statement. "We look forward to participating in this very crucial debate to ensure that even a 'weak' Title II will still be strong enough to protect consumers." Free Press President and CEO Josh Silver added that, "This is extremely welcome news. We reserve judgment, however, on whether the FCC has gone far enough to protect consumers with this new proposal."

A House Oversight and Government Reform panel Wednesday approved legislation mandating the creation of a permanent national office for cyberspace within the White House to oversee federal agency efforts to protect their computer systems cyber attacks and other threats.

Under the bill (H.R. 4900), approved by the Government Management Subcommittee by voice vote, the office would have a Senate-confirmed director and include a panel of government information technology experts tasked with guiding agency programs to tighten their computer security systems. The legislation would effectively institutionalize the White House office of cyber-security coordinator created by President Obama by executive order last year and now headed by Howard Schmidt, a veteran computer industry official who served as an adviser to former President George W. Bush.

Under an amendment offered by Rep. Gerald Connolly, D-Va., and approved on voice vote, the bill would also make permanent the post of chief technology officer within the White House Office of Management and Budget, a job now held by Vivek Kundra. Connelly said he believed it was important to codify the position into law "so that it isn't simply handing out there on an executive order."

The legislation also would direct agencies to develop automatic systems for continuously monitoring their computer networks for deficiencies and risks instead of filing annual reports showing compliance with the Federal Information Security Management Act as they are currently required to do.

House Oversight and Government Reform Government Management Subcommittee Chairwoman Diane Watson, D-Calf., the sponsor of the bill, said she believed that centralizing cyber-security operations in the White House was needed to streamline and coordinate agency efforts to protect government computer systems. She said that currently there were only layers of make-shift security.

A similar bill pending in the Senate would replace paper FISMA compliance with real-time monitoring of government IT systems, but would centralize government cyber-security authority in the Department of Homeland Security.

TechAmerica praised the subcommittee's efforts to update FISMA but voiced concern with a couple provisions in the House bill, including one that would create a prioritized list of technologies. "Such a list can become quickly outdated, thereby risking the continued use of technologies that are obsolete, and it can have the unintentional consequence of hampering innovation," TechAmerica President and CEO Phil Bond said in a Wednesday letter to Watson.

House Judiciary Chairman John Conyers, D-Mich., said Wednesday that talks on addressing concerns he and other House Judiciary members have raised about a Senate compromise patent overhaul bill appear to be "stalled."

The patent bill "seems to be stalled somewhere between the House and Senate," Conyers said during a hearing on the Patent and Trademark Office. He said after the hearing that he and ranking member Lamar Smith, R-Texas, and Judiciary members are considering offering a standalone bill on one of the less controversial provisions in the Senate compromise to allow the PTO to set its own fees and to bar Congress from diverting fee revenues to other government programs.

Conyers added that House Judiciary members "normally" can resolve their differences with their Senate counterparts but on the patent overhaul issues that "seems not to be happening."

Smith was more optimistic about the talks with the Senate on the compromise patent bill unveiled last month by Senate Judiciary Chairman Patrick Leahy and ranking member Jeff Sessions, R-Ala. He said House and Senate staffers have been meeting to narrow differences over such issues as the post-grant review process and willfulness language. The Leahy-Sessions compromise is expected to be offered as a manager's amendment when the bill hits the floor.

"I'm still hopeful," Smith said. "But changes are needed on the Senate bill before we'll sign off." Smith has said previously that if they reach a deal, the House would likely take up the Senate-passed patent measure.

Regardless of how the talks turn out, Smith said Congress needs to help the PTO address the backlog of patent applications and efforts to improve patent quality, which is why he and Conyers are considering the standalone fee-setting bill.

The leaders of the House and Senate Commerce committees wrote FCC Chairman Julius Genachowski Wednesday urging him to consider reclassifying broadband as a telecommunications service if its necessary to ensure the commission has authority to implement its national broadband plan.

The commission's authority over broadband providers was put in doubt after a Court of Appeals ruling last month found the FCC overstepped its authority in enforcing network neutrality principles against Comcast.

Senate Commerce Chairman John (Jay) Rockefeller, D-W.Va., and House Energy and Commerce Chairman Henry Waxman, D-Calif., noted that the decision has left in doubt the ability of the FCC to implement its proposals to promote broadband adoption and access, safeguard consumer privacy, protect an open Internet, and take other key actions.

"We believe that it is essential for the commission to have oversight over these aspects of broadband policy, because they are vitally important to consumers and our growing digital economy," Rockefeller and Waxman wrote. They added, "To accomplish these objectives, the commission should consider all viable options. This includes a change in classification, provided that doing so entails a light regulatory touch, with appropriate use of forbearance authority."

They added that they are willing to work with the FCC in the "long term" on legislation to make changes to existing law to give the FCC the authority it needs to address the issues raised by the decision.

In the wake of the Comcast decision, public interest groups and others have been urging the FCC to reclassify broadband as a telecommunication service under Title II of the telecommunications act. Major broadband providers staunchly oppose such a move and have argued that it would be a radical departure from past FCC policies.

A recent story in The Washington Post suggested that Genachowski might be leaning against reclassifying broadband as a telecommunications service. "The chairmen's support for the FCC to use its full authority to protect consumers further demonstrates that changing the classification of broadband has widespread support," Free Press President and CEO Josh Silver said in a statement. "It is anything but the 'radical move' that the carriers have deceitfully painted it to be."

Security analysts said Tuesday that the federal government needs a better system for assessing and reporting cybersecurity threats, but real progress is impossible without more money for new programs, Nextgov.com reported.

During a conference in Washington hosted by software solutions company SAS, security analysts agreed the 2002 Federal Information Security Management Act, which requires agencies to submit comprehensive security reports on a semi-regular basis, no longer provides the guidance necessary to effectively monitor cyber threats. Critics have called the current process burdensome and a distraction from security.

White House Cybersecurity Coordinator Howard Schmidt and federal Chief Information Officer Vivek Kundra recently outlined a new monitoring approach that will require agencies to regularly feed information about their systems, software, security training and user access into a central Web-based portal called CyberScope. Agencies can begin using the tool in June, and monthly reporting will be required starting in 2011, according to the Office of Management and Budget memorandum issued last month.

FISMA made sense at the time it was written because some agencies paid no attention to cyber threats, said former Rep. Tom Davis, R-Va., who is now director of federal government affairs at Deloitte and Touche. "No one understood that there were no safeguards and hackers were five or six steps ahead of us," said Davis, a former chairman of the House Oversight and Government Reform Committee. "The procedures brought some awareness to government."

But analysts agree the guidelines are outdated, and government needs to move from a reactive approach to a preemptive one. "FISMA got us to a certain bar, but the reality is that we're more compromised today than we've ever been," said Travis Reese, executive vice president and chief operating officer of Mandiant Corp., which offers intelligence security solutions.

Government and industry should move away from the mindset in which they could pass FISMA audits but still be vulnerable to security threats, said Bud Horton, executive director of Accenture Technology Consulting-Security, adding too many organizations get hung up on checklists without focusing on actual security outcomes.

"It's nice to check all the boxes and have procedures, but does it really work?" Davis said. To read more, click here.

From this morning's Earlybird:

• "Google Inc. plans to begin selling digital books in late June or July, a company official said Tuesday, throwing the search giant into a battle that already involves Amazon.com Inc., Apple Inc. and Barnes & Noble Inc.," the Wall Street Journal reports.

Google Tuesday defended its proposed acquisition of mobile advertising provider AdMob by pointing to comments from other players in the mobile market to bolster its claim that the deal will not harm competition.

The FTC is currently weighing whether to approve Google's $750 million purchase of AdMob. In a post on Google's public policy blog, Google Group Product Manager Paul Feng noted that, "We've told the FTC about how new and highly competitive the mobile advertising space is, and the FTC has been talking to others in the industry about their views as well."

He quoted mobile application provider Wertago as telling the FTC that the deal "will have little if any effect on the competitiveness of the mobile advertising market space." In a long blog post on its Web site, Wertago said "there is no way the FTC knows enough to support a decision to block the deal. The staff members we spoke to were not particularly knowledgeable about the mobile ad space they are considering interfering in."

A group of House Energy and Commerce Committee members raised concerns about the deal and urged Energy and Commerce Chairman Henry Waxman, D-Calif., last week to ask the FTC to brief the panel on its probe of the merger. "The need for thorough review is particularly pressing given Google's dominant position in search advertising including mobile search advertising and its growing influence over other forms of online advertising," the lawmakers wrote.

A key adviser to FCC Chairman Julius Genachowski announced Tuesday that he is leaving the commission. Senior Counselor Colin Crowell said he planned to leave the agency in June to "explore other professional opportunities."

Before joining the FCC, Crowell spent years as the top telecommunications staffer to Rep. Edward Markey, D-Mass., on the House Energy and Commerce Committee, playing a role in helping to draft key pieces of communications legislation including the 1996 telecommunications act and language added by Markey to last year's economic stimulus package requiring the FCC to develop the national broadband plan.

Genachowski said Crowell "has been indispensable to every key decision we've made and his rare combination of policy smarts, wise counsel, and communications expertise has been invaluable to me and the agency as we developed our broadband agenda for the nation."

Public Knowledge President Gigi Sohn also praised Crowell, saying "American consumers have lost a great champion and FCC Chairman Julius Genachowski has lost an invaluable adviser. Colin's knowledge of telecommunications and Congress is unrivaled in Washington."

A group of privacy advocates expressed strong disappointment with draft privacy legislation unveiled Tuesday by the leaders of the House Energy and Commerce Communications Subcommittee, with some saying it might be worse than the status quo.

While some of the groups praised Subcommittee Chairman Rick Boucher, D-Va. for at least tackling the issue of online privacy, they cited several troubling provisions including the fact that the measure would bar consumers from suing companies for privacy breaches, pre-empt state laws, does not include limits on data retention, fails to address data breaches and offers too many loopholes for online behavioral advertising and for transactional and operational data such as Web logs.

Boucher, who drafted the bill with subcommittee ranking member Cliff Stearns, R-Fla., said Tuesday that the bill was aimed at offering a balanced approach to the issue by protecting consumers while also enabling advertising to continue to grow on the Web and help support the availability of free content. The bill would require Web site to tell users what data is collected and what it will be used for. It generally allows for the collection and use of information unless consumers opt-out, while requiring consumers to provide their consent to the use of sensitive data and for the use of data by some unaffiliated third parties.

"We commend Congressman Boucher for starting a discussion about privacy with this bill," Susan Grant with the Consumer Federation of America said during a conference call with several other privacy groups. "We're very disappointed with the legislation that relies on a notice and opt-out [regime] that has proven to be so ineffective."

While the bill requires that consumers give their consent for firms to collect and use sensitive information such as financial and medical data, they say even those provisions are ineffective. Grant argued that the bill should ban the use of all types of sensitive data because it is unfair to expect consumers to understand future potential users of such data.

"It changes nothing and it codifies an abusive, invasive system," John Simpson of Consumer Watchdog said. Jeff Chester of the Center for Digital Democracy said he was concerned that the bill would hamper the ability of the FTC to offer stronger privacy principles. The bill would require the FTC to implement and enforce the bill's provisions. "I actually think this was an attempt to straight jacket the FTC," Chester said.

House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., Tuesday released draft privacy legislation that would require Web sites to provide enhanced notice about how they use consumer information and obtain a user's consent before collecting sensitive information or sharing data about a consumer with some third parties.

In an interview, Boucher said he will use the feedback from the draft to make some possible modifications to the measure. "The goal is to build the broadest base for establishment of consumer privacy protection for Internet users," he said.

Privacy advocates say more must be done to protect consumers online given the growth in the collection of information about users and their Internet surfing habits, data that is increasingly being used to target advertisements at them.

The draft would require companies that collect personally identifiable information about individuals to "conspicuously" display a clearly-written, understandable privacy policy that explains how information about individuals is collected, used and disclosed, according to a summary of the measure. Generally, consumers would have to "opt-out" of having such information collected, a standard that also would apply to services delivered by another party to carry out "a first-party transaction" such as providing ads on the Web site.

However, companies would have to get a user's consent before collecting sensitive information such as financial or health data or a user's Social Security number. This "opt-in" requirement also would apply to Web sites that want to share personally identifiable information, such as a user's name, address, telephone number or e-mail address, with an unaffiliated third party.

The draft provides an exception to this third-party opt-in requirement for a third-party ad network that might collect information to target ads at an individual as long as these firms provide a "clear, easy-to-find link" to the ad network's Web page that allows users to edit their profiles and opt-out of having such a profile or ads targeted at them.

Vice President Biden and Health and Human Services Secretary Kathleen Sebelius announced Tuesday that the Obama administration has awarded $220 million in grants to help fund pilot projects in 15 communities aimed at promoting the use of health information technology.

The communities selected will use health IT resources to meet "specific and measureable" goals, tailored to the needs and priorities of those communities, aimed at improving quality, cost-efficiency and the health of the local population. Sebelius said the 15 awards will build on health IT resources already being used in these communities and provide best practices that can be adopted in other areas.

"The Beacon Community Program will tap the best ideas across America and demonstrate the enormous benefit health IT will have to improving health and care within our communities," she said in a statement.

Some of the proposed projects, which are funded by the nearly $20 billion for health IT included in last year's economic stimulus package, are aimed at helping doctors and hospitals provide better control of blood pressure for diabetic and hypertensive patients, make improvements in care coordination and chronic disease management, reducing preventable emergency department visits and re-hospitalizations, and improving rates of immunization for children and adults, according to the statement.

For example, the Louisiana Public Health Institute in New Orleans was awarded $13.5 million for a project that aims to reduce racial health disparities, improve control over diabetes and bolster smoking cessation rates by linking technically isolated health systems, providers and hospitals and by increasing patient access to their personal health records.

"These pioneering communities are going to lead the way in bringing smarter, lower-cost health care to all Americans through use of electronic health records," Biden said in the statement.

There were more than 130 applications for the 15 Beacon Community Program awards announced Tuesday. HHS is expected to announce additional awards in the "near future."

From this morning's Earlybird:

• "U.S. antitrust enforcers are taking a keen interest in recent changes that Apple Inc. made to its licensing agreement with iPhone application developers and are likely to open a preliminary investigation into whether the company's actions stifle competition in mobile devices, according to people familiar with the situation," the Wall Street Journal reports.

• "Google Inc. has boosted the number of advertisers using display ads on its YouTube video site 10-fold in the past year, a sign the company is making headway to lift sales in businesses other than search," Bloomberg News reports.

Movie industry groups are keeping up their aggressive effort to block two firms from launching futures exchanges that would be based on speculation over motion picture box office receipts.

In a letter sent late last week to senators, five movie industry groups, including the Motion Picture Association of America, tried to dispute recent claims made by supporters of such exchanges, who are aiming to strip language from a financial regulatory bill that would ban movie futures exchanges. The Commodity Futures Trading Commission has already backed applications from Media Derivatives and Cantor Futures Exchange to be contract markets, the first step in their bid to create movie futures exchanges. The CFTC, however, has yet to approve futures contracts that would be traded on such exchanges.

Supporters argue that such exchanges will assist the industry by expanding the depth and number of financing sources available to the industry and offers an opportunity to hedge against the high risk of making movies.

But movie industry groups argued in the letter that the proposed movie futures contracts differ from other futures contracts in key ways, noting that unlike other futures markets, there is no cash market underlying the proposed movie futures contracts and they pose a greater risk of manipulation. The letter also disputes claims that the movie industry is split on the issue of the movie exchanges.

"The overwhelming consensus in the industry is that no one wants these contracts or has any intention of using them. They stand only to cause harm," according to the letter signed by the Directors Guild of America, the Independent Film and Television Alliance, the International Alliance of Theatrical Stage Employees, the MPAA, and the National Association of Theatre Owners. "This effort to create a synthetic derivative will serve the interest of no one other than the two exchanges who would reap transaction fees and those who are 'inside' with highly technical information, not the public interest. The ban in the Senate bill is both appropriate and necessary."

Ahead of the expected release Tuesday of a House privacy bill, a group of public interest and privacy groups wrote House members Monday calling on them to support the inclusion of principles aimed at giving consumers more control over their personal information.

House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., is expected to release his long awaited data privacy bill Tuesday. The legislation is expected to address concerns about consumer privacy given the growing use of online behavioral advertising, which involves using data about a consumer's Web surfing habits to target ads to them. Boucher detailed the bill's provisions Monday during a speech at the American Business Media's annual conference in Charleston, S.C. According to a news release from the group, Boucher said the bill would apply to the collection of personal information from consumers both online and offline and "initially require that all Web sites that collect information from consumers give consumers notice with respect to what information is collected, how it is used, who it is shared with, and the circumstances under which it is shared."

It added that Boucher said it would require firms to allow consumers to "opt out" of having such information collected, which means that firms would be allowed to collect and use data unless consumers specifically request that it not be collected. He said unaffiliated third-party Web sites that "gather information from consumers across multiple unaffiliated Web sites" would be required to gain specific consent from consumers before using and collecting data from them, as would those who seek to use senstive personal information such as medical or financial data.

Boucher's spokeswoman did not return a call seeking comment on the American Business Media report. Jeff Chester, executive director of the Center for Digital Democracy, said if the report is accurate it is "a blow to consumer protection."

Chester's group and 10 others wrote House lawmakers saying that privacy legislation should include the Fair Information Principles, which allow consumers to "control their personal information, help to protect human dignity, hold accountable organizations that collect personal data, promote good business practices, and limit the risk of identity theft." In addition to these, they also called on lawmakers to ensure that data used in online behavioral advertising cannot be linked to an individual's name or address and also can't be linked to them through an Internet protocol address, cookie or other identifier.

An independent audit of agencies' plans to instill transparency into their missions ranked the Office of Management and Budget, which spearheaded the Obama administration's open government initiative, near the bottom and placed NASA at the top, according to a coalition of good government groups that released the results on Monday.

The open government directive that OMB issued in December 2009 required agencies to produce a plan by April outlining how they would use technology to establish a culture of transparency, encourage public participation, and collaborate with public and private organizations.

The assessment measured the extent that each plan met criteria stipulated in the directive, Nextgov.com reported . It was coordinated by the Openthegovernment.org coalition and conducted by representatives from nonprofit organizations and academia.

Scores were based on a scale of 1 to 58 or 60, depending on whether an agency has special classification powers. OMB was given 35 of a possible 58 points, while NASA earned a 77 of 60 by scoring bonus points for performing additional actions not required by the directive such as posting documents online that are frequently requested under the Freedom of Information Act.

NASA officials said they followed a collaborative process to create the agency's plan, asking employees, citizens, advocacy groups and other agencies to contribute. "We are creating a learning community, as we transition how we do business in government," the department said in a statement.

Rounding out the top three agencies were the Housing and Urban Development Department and the Environmental Protection Agency, which scored 59 of 58 and 61 of 60, respectively. In addition to OMB, the three weakest plans were those developed by the Energy and Justice departments, scoring 31 and 29 of 60, respectively.

"I think they all did serious work, but some came from a frame of being already public-facing and did a better job," said Openthegovernment.org Director Patrice McDermott. "The others have made starts and will be urged to improve on them." To read more, click here.

A new survey finds that while more than 90 percent of private and public sector security experts say cyber attacks pose a serious threat, they differ on whether each side is doing enough to protect their networks.

The poll, released Saturday before the start of a worldwide cybersecurity summit in Dallas, found that 70 percent of government officials surveyed said private-sector networks were not secure enough, while only 39 percent of private sector security officials surveyed believed government networks were not secure enough.

The poll, conducted April 19-26 for the nonpartisan think tank the EastWest Institute, surveyed 137 security experts, 34 government officials and 103 private sector security experts from the United States as well as China, India, Russia and other countries.

"These results point to an urgent need to build trust, not only between countries but also between governments and businesses on a global level," EastWest Institute President and CEO John Edwin Mroz said in a statement.

As more Internet users migrate to the Web to conduct banking, shopping and other transactions, the survey found that many security experts are still uncomfortable doing these types of tasks online. The survey found that 43 percent of business security experts and 19 percent of government officials are uncomfortable with doing online banking. The numbers were even higher when it comes to sending sensitive personal data over the Web such as your Social Security number, with 84 percent of the private sector officials and 69 percent of government officials reporting they were uncomfortable doing this.

From this morning's Earlybird:

• "The chairman of the Federal Communications Commission has indicated he wants to keep broadband services deregulated, according to sources, even as a federal court decision has exposed weaknesses in the agency's ability to be a strong watchdog over the companies that provide access to the Web," the Washington Post reports.

• "The FCC may soon hire an outsider to oversee its review of Comcast's bid for NBC, in part to free up the commission's resources so that it may focus primarily on its new broadband agenda," The Hill reports.

• The Washington Post reports on how high-tech firms are setting up shop in the Washington area.