Topic: Telecom, Internet & Information Policy

Do Not Walk, California—Run from EDLs

As early as next week, the California State Senate could vote on S.B. 397, a hitherto little-noticed bill that approves “enhanced drivers’ licenses” in California. The bill’s ostensible purpose is to bring California’s licenses up to the standards set by the Western Hemisphere Travel Initiative (WHTI), which mandated the use of a passport or “enhanced driver’s license” for sea and land crossings in 2008 within continental North America and the Caribbean. (Air travel still requires the use of a passport.) WHTI was and still is a paragon of costly overreaction to terrorism.

What’s “enhanced” about an “enhanced driver’s license”? It contains a radio frequency identification (RFID) chip, which in turn contains a personal identification number. Think of it as your Department of Homeland Security tracking number. The RFID chip broadcasts the information to any receiver that properly interrogates it. At the Canadian and Mexican border, this in theory allows for quicker transit and passage through EDL-specific “Ready Lanes.” The receiver pulls up information held in a DHS database, including identity data, the bearer’s picture, and signature. (Unsurprisingly, the bill reserves the right for the state to include other information in the future, should it deem it to be necessary.) At the border and beyond, it allows pretty much anyone to figure out your comings and goings.

Using RFID in identity documents was identified as a no-no by DHS’s privacy advisory committee in 2006. That doesn’t seem to have stopped the agency from moving forward with it. If S.B. 397 passes, EDLs in California would become legal but optional, as they currently are in New York, Michigan, Vermont, and Washington State. Given the government’s propensity for turning optional pilot programs into permanent mandatory programs (witness the current debate over the 17-year-old E-Verify “pilot progam”), it’s not difficult to imagine a time when the EDL programs cease to be optional—and when EDLs contain information well beyond a picture, a signature, and citizenship status. The government also tends to expand programs far beyond their original purposes.

Californians should not walk—they should run away from “enhanced” driver’s licenses.

UPDATE: Rep. Justin Amash (R-Mich.) is on the case for Michiganders.

President Obama Thinks Spying Revelations Are “Noise”

In a report on the latest of President Obama’s attempts to circumvent Congress and govern by decree – this time by getting the Federal Communications Commission to raise “fees” on cellphone users by billions of dollars to expand federal subsidies for high-speed Internet access in local schools – the Washington Post also lets us know what the president thinks of revelations that the National Security Agency is scooping up all our emails and Internet traffic. We found out only later, though the president presumably knew back on June 6, that contrary to what we were told at the time, government officials also read some of the email. 

And what does the president think of these revelations that set off the “debate” he’s so supportive of? He thinks they’re “noise” getting in the way of announcements of programs that are, though of dubious constitutionality, “real and meaningful”:

On the same day of Obama’s visit [to a school to announce his ConnectEd program], news reports were dominated by details of a wide-ranging National Security Agency surveillance program that has since become one of the major controversies of the president’s second term.

As Air Force One flew toward North Carolina that day, Obama lamented to his education secretary that one of the administration’s biggest ideas was going to be overtaken by other news.

“I remember him sort of saying, ‘It’s a shame that there’s going to be a focus on the noise rather than something that’s real and meaningful,’ ” [Arne] Duncan said.

 

NSA Spying in the Courts

The National Security Agency’s collection of every American’s telephone dialing information is hotly contested in the court of public opinion and in Congress. It is now seeing its first test in the courts since its existence was revealed.

The Electronic Privacy Information Center, arguing that it has no other recourse, has filed an extraordinary appeal to the Supreme Court of the order requiring Verizon to turn over telephone calling information en masse to the government. EPIC is a Verizon customer that communicates by telephone with confidential sources, government officials, and its legal counsel.

Cato senior fellow and Georgetown University law professor Randy Barnett joined me this week on a brief to the Court urging it to accept the case so it can resolve statutory and constitutional issues that have “precipitated a juridical privacy crisis.”

The brief first argues that the Foreign Intelligence Surveillance Act does not authorize a sweeping warrant for all communications data. The law requires such a warrant to show relevance to an existing investigation, which is impossible when the data is gathered in support of future, entirely speculative investigations. Not only the text of the statute, but Congress’s intent and the structure of the statute support this interpretation.

The Data Says Open-Ended Spending Bills Are Common

Let’s start with a little civics lesson: Congress spends money through a two-step process. Spending must first be authorized. That’s called an authorization of appropriations. Then, in a second step, the money is actually appropriated. There are exceptions, but on the whole this is how spending works. Authorizing bills go to authorizing committees, and appropriations bills go to the appropriations committees. When both do their thing, money gets spent. It’s good to keep an eye on.

In our project to generate better data about what Congress is doing, we’ve “marked up” over 80 percent of the bills introduced in Congress so far this year, adding richer and more revealing computer-readable data to the text of bills. That’s over 4,000 of the 5,000-plus bills introduced in Congress since January. We’re to the point where we can learn things.

I was surprised to find just how often the bills that authorize spending leave the amounts open-ended. A recent sample of the bills we’ve marked up includes 428 bills with authorizations of appropriations. Just over 40 percent of them place no limit on how much money will be spent. They say things like “such sums as may be necessary,” leaving entirely to the appropriations committees how much to spend. (There are many bills with both defined amounts and open-ended spending. To be conservative, we treated any bill having limited spending as not unlimited.)

This leads me to two related conclusions. First, authorizations of appropriations being a potential brake on spending, this surprisingly common practice is part of Congress’s fiscal indiscipline. The members of Congress and Senators who introduce such bills and vote to authorize open-ended spending are avoiding their responsibility to determine how much a program is worth to us, the taxpayers.

Obama Chastises Rogue Trade Agency for iPhone Ban

On Saturday, the president vetoed a decision of the U.S. International Trade Commission for the first time in over 25 years. As a result, the United States will not be imposing an import ban on older iPhones despite the ITC’s finding that Apple infringed certain patents owned by Samsung. This action by the Obama administration is undoubtedly a good development, not just because you will still be able to get a free iPhone 4 when signing a 2-year contract, but because the veto simultaneously disciplines and discredits the ITC’s disruptive role in the U.S. patent system.

The president’s intervention corrects a bad decision by the ITC. The patents that Samsung accused Apple of infringing in the ITC investigation are standard technology required to run phones on a 3G wireless network. Owners of standard-essential patents must agree to license the technology on fair, reasonable, and non-discriminatory (FRAND) terms to anyone who asks. Samsung claimed at the ITC that Apple refused to pay any royalties at all, and Apple claimed that Samsung demanded an unreasonable royalty. The ITC sided with Samsung.

The ITC’s ruling has been controversial not because Samsung won the case, but because the ITC’s remedy—total exclusion of the infringing products from the U.S. market—is excessive.

If Samsung had brought its case in federal district court instead of the ITC, the judge would most likely have ordered Apple to pay the royalties it owed Samsung. An injunction against future sales would not be granted, because Samsung never had the right to keep Apple from using the technology in the first place, only to collect royalties.

As I wrote last month in anticipation of a potential presidential veto, this action by the president has a number of policy implications that go beyond the Apple–Samsung patent dispute. The Obama administration, leaders in Congress, and much of the tech industry have been converging lately on the idea that remedies for patent infringement at the ITC are too strict. The ITC should not be able to ban future sales in a situation where a district court would refuse to do the same thing. As it stands now, the ITC’s excessive remedies allow patent holders to wield more power than they should and exacerbate the ongoing struggle against patent trolls.

Korean press coverage of the issue has implied that the administration’s veto of Samsung’s patent victory against Apple amounts to “flagrant protectionism.” In a separate case, the ITC is set to decide later this week whether Samsung infringed patents owned by Apple. If the administration allows an import ban on Samsung products despite intervening to help Apple, many in Korea will surely cry foul.

A trade conflict would be a fitting consequence of mixing patent litigation with trade policy. It doesn’t make sense for President Obama to have the power to intervene in a patent case simply because he doesn’t approve of the outcome. Section 337 of the Tariff Act of 1930, the law that enables the ITC to litigate patents, was designed as a protectionist trade remedy. The president’s veto power is meant to ensure that the ITC’s decisions don’t impede U.S. foreign or economic policy. If the ITC were a legitimate patent court, its decision would not be subject to executive override. The ITC is simply the wrong place to litigate patents, standard-essential or otherwise.

Perfect Storm for ITC Patent Reform

Seven weeks ago, the International Trade Commission announced its decision to ban the importation of some late model iPhones and iPads after finding that Apple had infringed patents owned by rival Samsung. In today’s Wall Street Journal, Verizon Vice President Randal Milch has publicly implored President Obama to exercise his power to veto the ITC’s decision. Such a move could be just the thing to prompt real reform of the ITC’s disruptive role in the patent system.

The prospect of a presidential veto of an ITC exclusion order is pretty exciting. The statutory power of the president to disapprove a decision by the ITC has only been exercised five times since the ITC was created in 1975 and the last president to use the power was Ronald Reagan. Disapproving this new order would certainly turn some heads, and it’s not as unlikely as you might think.

Anti-ITC sentiment has been growing steadily in recent years. In 2006, the Supreme Court made it more difficult for U.S. courts to issue injunctive relief in patent cases, dealing a major blow to patent trolls who buy-up patents for the sole purpose of litigating them. The Court’s holding did not apply to the ITC, making the trade agency a more attractive venue for those unsavory litigants. Now the ITC has decided that it can issue injunctions (as it has in the Apple-Samsung dispute) even when the patent owner previously agreed to license the technology to all who offer a reasonable royalty. More and more observers are coming to recognize that the ITC’s powers are inappropriate and need to be reined in.

A presidential veto of the Apple ban could be just the right thing to push Congress or the agency itself to implement real reform. The House has held a number of committee hearings on the topic in the last two years, and bringing ITC remedies in line with district court practices is included in the Obama Administration’s newest outline for patent reform

Even the ITC’s staunchest advocates would rather have transparent and predictable limits than face the specter of ad hoc nullification of orders resulting from expensive litigation.  As Verizon’s Milch explains in his closing paragraph:

If the administration signaled that it would veto ITC relief orders in instances where courts would have found such orders inequitable, it could discourage parties from clogging the ITC’s docket with such cases in the first place. Then the White House could, mercifully, find it unnecessary to veto ITC decisions, perhaps for another 25 years.

Aligning ITC and district court remedies will do a lot to reduce the disruptive impact of having two venues for patent litigation, but a better policy would be to end the agency’s patent jurisdiction entirely. There is simply no need for an import-only specialized patent court. The law the ITC uses to litigate patents was devised in 1922 to prevent “unfair methods of competition” by foreigner manufacturers.  It is a protectionist relic that should be repealed. 

Unless we abolish the institution now, at some point—maybe in 25 years, probably sooner—the ITC will be messing things up again. 

The Talking Points for NSA’s Dragnet Don’t Hold Up

A bipartisan group of legislators in the House—spearheaded by Rep. Justin Amash (R-Mich) and John Conyers (D-Mich)—is bucking both the Obama administration and Republican party leadership to push an appropriations measure defunding the National Security Agency’s dragnet phone records programs. The measure would forbid the government from using any resources to execute a Patriot Act §215 “business records” order unless it is limited to the specific targets of specific investigations—effectively barring use of that authority to vacuum up the phone records of millions of innocent Americans. Predictably, the intelligence community and its proxies in Congress are pushing back ferociously, circulating an “Open Letter of Support” for the dragnet program from former intelligence officials. It’s worth surveying their main talking points to see just why they aren’t persuasive. Note that they begin, as many defenders of the phone dragnet do, by lumping it together with the very different PRISM program, which involves monitoring of international e-mail and Internet traffic:

We are convinced that both programs are vitally important to our national security. The Director of the NSA, Gen. Keith Alexander, has publicly attested that these programs have been instrumental in helping to prevent attacks on the United States and its allies, including the plot to bomb the New York City subway.

The bundling here is important. Alexander did, at a June 18 hearing, assert that PRISM had been “critical” in disrupting a number of “terror events,” mostly overseas.  But when pressed specifically by Rep. Jim Himes (D-Conn.) on whether the §215 call records program had been “essential” in any cases, Alexander conspicuously dodged the question. He would not identify even a single case in which the bulk phone records collection had been “essential,” or even claim that there was such a case that he couldn’t discuss specifically. 

As for the plot to bomb New York’s subway system, the Atlantic convincingly marshalls evidence from the public record showing that the key initial leads in that case did not come from either PRISM or the §215 program. And with those leads, traditional intelligence authorities would have allowed the investigation to proceed more or less as it did. In particular, there is no indication whatever that the use of phone records to identify associates of plotter Najibullah Zazi required a massive database of all Americans’ calls: Ordinary police, after all, do similar detective work all the time, but with targeted orders based on particularized suspicion.

The crucial general point to understand about these claims for the efficacy of these programs is that if you have unlimited authority, then that will be what you end up using even if more limited authority would have sufficed. If we had never passed the Fourth Amendment, and the government could get “general warrants,” allowing police to search any home at will, they would never bother getting specific warrants based on probable cause. Then, every time police solved a crime through a search, they could accurately say “You see, we used a general warrant!”  But that would be no argument for general warrants. The question to ask is: “Why couldn’t you have done it with a specific warrant instead?”  We haven’t heard, at least publicly, any very good answers to that question when it comes to the NSA call dragnet.