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EPIC Alert 6.02 [1999] EPICAlert 2


Volume 6.02 February 3, 1999

Published by the Electronic Privacy Information Center (EPIC)
Washington, D.C.

Table of Contents

[1] Federal Judge Blocks New Internet Censorship Law
[2] Excerpts from the Internet Censorship Decision
[3] The Intel Controversy: Big Brother Inside
[4] Clinton Announces Info-Warfare Plans
[5] States Back Down From Plans to Sell Drivers' Photos
[6] Know Your Customer? The Customers Say "No!"

[7] EPIC Bill-Track: New Bills in Congress
[8] Upcoming Conferences and Events

[1] Federal Judge Blocks New Internet Censorship Law

Finding that a new Internet censorship law would restrict free speechin the "marketplace of ideas," a federal judge in Philadelphia blockedCongress' second attempt to regulate Internet content on February 1.
The ruling enjoins enforcement of the Child Online Protection Act(COPA), the statutory successor to the Communications Decency Act(CDA), which the Supreme Court struck down in June 1997. The legalchallenge to COPA was filed by the American Civil Liberties Union,
the Electronic Privacy Information Center and the Electronic FrontierFoundation as co-counsel on behalf of 17 organizations publishinginformation on the World Wide Web.

In granting a preliminary injunction against COPA, Judge Lowell A.
Reed, Jr., held that the plaintiffs are likely to succeed on theirclaim that the law "imposes a burden on speech that is protected foradults." The ruling came after a six-day hearing which featuredtestimony from website operators who provide free information aboutfine art, news, gay and lesbian issues and sexual health for women andthe disabled, and who all fear that COPA would force them to shut downtheir websites.

In his 49-page opinion, Judge Reed listed 68 separate "findings offact" to support his decision. The judge considered evidence thatCOPA imposed technological and economic burdens on speakers, butconcluded that ultimately the relevant inquiry is the "burden imposedon the protected speech, not the pressure placed on the pocketbooksor bottom lines of the plaintiffs."

On November 19 of last year, Judge Reed issued a temporary restrainingorder (TRO) against enforcement of COPA, which imposes criminalpenalties against any "commercial" website that makes material that is"harmful to minors" available to anyone under 17 years of age. TheTRO was set to expire on February 1. Within 60 days, the JusticeDepartment must decide whether to proceed with a full trial or appealthe preliminary injunction. Any appeal would be heard by the ThirdCircuit Court of Appeals.

Excerpts from the opinion are provided below. The full text of thecourt's decision, and complete information on the legal challenge, isavailable at:

[2] Excerpts from the Internet Censorship Decision

American Civil Liberties Union, et al. v. Reno, Civil Action No.
98-5591, (E.D. Pa., February 1, 1999):

The First Amendment to the United States Constitution provides that"Congress shall make no law . . . abridging the freedom of speech."
Although there is no complete consensus on the issue, most courts andcommentators theorize that the importance of protecting freedom ofspeech is to foster the marketplace of ideas. If speech, evenunconventional speech that some find lacking in substance oroffensive, is allowed to compete unrestricted in the marketplace ofideas, truth will be discovered. Indeed, the First Amendment wasdesigned to prevent the majority, through acts of Congress, fromsilencing those who would express unpopular or unconventional views.

. . . In the medium of cyberspace . . . anyone can build a soap boxout of web pages and speak her mind in the virtual village green toan audience larger and more diverse than any the Framers could haveimagined. In many respects, unconventional messages compete equallywith the speech of mainstream speakers in the marketplace of ideasthat is the Internet, certainly more than in most other media.

. . . The plaintiffs are likely to establish at trial that under COPA,
Web site operators and content providers may feel an economicdisincentive to engage in communications that are or may be consideredto be harmful to minors and thus, may self-censor the content of theirsites. Further, the uncontroverted evidence showed that there is noway to restrict the access of minors to harmful materials in chatrooms and discussion groups, which the plaintiffs assert draw trafficto their sites, without screening all users before accessing anycontent, even that which is not harmful to minors, or editing allcontent before it is posted to exclude material that is harmful tominors. This has the effect of burdening speech in these fora thatis not covered by the statute. I conclude that based on the evidencepresented to date, the plaintiffs have established a substantiallikelihood that they will be able to show that COPA imposes a burdenon speech that is protected for adults.

. . . The protection of children from access to harmful to minorsmaterials on the Web, the compelling interest sought to be furtheredby Congress in COPA, particularly resonates with the Court. ThisCourt and many parents and grandparents would like to see the effortsof Congress to protect children from harmful materials on the Internetto ultimately succeed and the will of the majority of citizens in thiscountry to be realized through the enforcement of an act of Congress.
However, the Court is acutely cognizant of its charge under the law ofthis country not to protect the majoritarian will at the expense ofstifling the rights embodied in the Constitution.

. . . Despite the Court's personal regret that this preliminaryinjunction will delay once again the careful protection of ourchildren, I without hesitation acknowledge the duty imposed on theCourt and the greater good such duty serves. Indeed, perhaps we dothe minors of this country harm if First Amendment protections, whichthey will with age inherit fully, are chipped away in the name oftheir protection.

[3] The Intel Controversy: Big Brother Inside

Privacy groups are calling on computer users to boycott IntelCorporation products after the company announced last week that itplanned to introduce a new function in its Pentium III chips that willidentify users.

Intel announced on January 20 that it was planning to include a uniqueID number in each of its new Pentium III chips. The number, called aProcessor Serial Number (PSN), would be accessible via software and isdesigned for use by software programs and web-based services toidentify users.

Privacy groups were critical of the announcement. If widely adopted,
the identifier would facilitate tracking of web users for marketing,
law enforcement and other purposes. Intel has already announced that30 software vendors and web service providers are planning to use thePSN. EPIC, Junkbusters and Privacy International called for a boycottof Intel products until the company disables the PSN and recallsexisting chips.

Following the boycott announcement, Intel announced that it wouldoffer a software patch to "turn off" the PSN. According to U.S. Newsand World Report, Intel officials admitted that "the concession wasprepackaged -- a move that the company had held in readiness, in caseof the very sort of protest that occurred." Security experts notethat the patch must be installed by PC makers or users and can bedisabled by other programs. Users can also be forced to turn off thepatch as a condition of running particular software or accessingcertain web sites.

More information on the PSN and the Intel boycott is available at:

[4] Clinton Announces Info-Warfare Plans

President Clinton announced on January 22 a new initiative oninformation warfare. The new program proposes expenditures of $1.46billion to protect critical systems from cyber and other attacks -- anincrease of 40 percent from two years ago. Of that amount, $500million is slated for cyber-protections.

The President announced a four-part plan including increased researchto detect intruders; alerts to other agencies when a "criticalcomputer system is invaded;" the creation of information centers inthe private sector to encourage government-private sector cooperation;
and a "Cyber Corps program" to train and recruit more people incomputer security.

In his speech announcing the proposal, Clinton said, "We already areseeing the first wave of deliberate cyber attacks -- hackers breakinto government and business computers, stealing and destroyinginformation, raiding bank accounts, running up credit card charges,
extorting money by threats to unleash computer viruses." But whenasked later about those claims, Attorney General Reno downplayed thethreat, stating, "I think it's a problem that we deal with and wetrace and we, again, take appropriate action as based on prosecutionsthat have been successful to date." When asked about the civilliberties issues relating to the proposal, Reno noted that JusticeDepartment lawyers have been consulted but admitted that they havenot completed their work.

More information on infowar, including EPIC's report on the civilliberties implications, is available at:

[5] States Back Down From Plans to Sell Drivers' Photos

Heeding an outcry from citizens concerned about their privacy,
officials in three states are now seeking to prevent disclosure anduse of digital drivers license photos by a private company. Thegovernors of South Carolina, Florida and Colorado have reacted tocitizens' complaints about a small New Hampshire company's efforts tobuild a national database of drivers photos and personal images foruse in a new anti-fraud service for retailers.

In Florida, Governor Jeb Bush canceled the sale of the photos andordered the company to destroy the photos it had received. In SouthCarolina, where the first tests of the system are underway,
authorities filed suit to halt the project and to retrieve the imagesand legislators submitted proposals to prohibit such sales in thefuture. In Colorado, the governor condemned the sale of driverslicense photos and said he would to do whatever he could to stop theplanned transfer. Other states such as New Hampshire rejected sellingthe photos to the company.

A series of investigative reports in the Washington Post alertedresidents that state motor vehicle officials sold the images withoutthe permission of drivers. The newspaper reported that South Carolinaand Florida officials had already sold license information and photosto the private firm, in some cases for a penny apiece. South Carolinahad transferred 3.5 million digital photographs, while Florida hadalready sent 35,000 out of a total of 14 million. Colorado planned tosell 5 million photos.

The company, Image Data LLC of Nashua, New Hampshire, planned to usethe information to create an anti-fraud system for stores. Under theplan, a retail clerk could key in a person's driver license number andthat person's picture would flash up on a small screen at the clerk'sregister for a few seconds. As the plan became known, Image Data wasso swamped with calls that it added extra lines and hired temporaryworkers and still found lines busy and its voice-mail system full.
Class action suits are being planned in South Carolina and Florida.

[6] Know Your Customer? The Customers Say "No!"

The Federal Deposit Insurance Corporation's (FDIC) is backing awayfrom its proposed "Know Your Customer" regulations after coming underheavy criticism from citizens and bankers. "It's evident to mepersonally that we are going to have to do something different thanwhat was proposed," FDIC Chairman Donna A. Tanoue told the "AmericanBanker" magazine.

The proposed regulations would require banks to monitor customeraccounts and report "suspicious" transactions to federal authorities.
The rules were issued December 7, 1998, by the FDIC, Federal ReserveBoard, Office of the Comptroller of the Currency, and Office of ThriftSupervision. (See EPIC Alert 5.20).

Citizens concerned about their privacy have sent more that 14,000e-mail messages and letters to the FDIC and several thousand more tothe Office of Comptroller of the Currency and the Office of ThriftSupervision. The FDIC has received only about a dozen messagessupporting the proposed rules.

The American Bankers Association, reversing its previous support, hasasked the FDIC to kill the controversial plan, stating, "given thewidespread and growing negative perception, we are concerned about theprospect of having the public lose confidence in the bankingindustry." Smaller banks, led by the Independent Bankers Associationof America, and America's Community Bankers have long opposed therules, citing privacy concerns and the burdensome requirements.

Congress is also stepping in. Several Republicans, including MajorityWhip Tom DeLay (R-TX) introduced the "American Financial InstitutionsPrivacy Act" on February 2. The bill would require a study of therules' impact on privacy. Implementation of the rules would bedelayed for a year after the study was delivered to Congress. Rep.
Ron Paul (R-TX) is scheduled to introduce new legislation today thatwould prohibit the rules completely and repeal the Bank Secrecy Act.
The House Banking Committee is planning to hold a hearing on April 15.

Comments on the proposed rules may be sent to Thecomment period ends on March 8. Keep those e-mails coming in! Thetext of the FDIC proposal is available at:

[7] EPIC Bill-Track: New Bills in Congress

* House Bills *

H.R. 220. Freedom and Privacy Restoration Act of 1999. Limits use ofSSN, prohibits creation of gov't IDs. Referred to the Committee onWays and Means, and in addition to the Committee on Government Reform.
Sponsor: Ron Paul (R-TX).

H.R. 354. Collections of Information Antipiracy Act. Creates newproperty rights for owners of databases of public information. Sponsor:
Howard Coble (R-NC). Referred to the Committee on the Judiciary.

H.R. 358. Patients' Bill of Rights Act of 1999. Requires health plansand insurers to protect confidentiality of medical records and allowpatient access. Sponsor: John Dingell (D-MI). Referred to theCommittee on Commerce, and in addition to the Committees on Ways andMeans, and Education and the Workforce.

H.R. 367. Social Security On-line Privacy Protection Act of 1999.
Limits disclosure of SSNs by interactive computer services. Sponsor:
Rep Franks, Bob (R-NJ). Referred to the Committee on Commerce.

H.R. 368. Safe Schools Internet Act of 1999. Required schools andlibraries to install filters on Internet connected computers. SponsorBob Franks (R-NJ). Referred to the Committee on Commerce.

H.R. 369. Children's Privacy Protection and Parental Empowerment Actof 1999. Prohibits the sale of personal information about childrenwithout their parents' consent. Sponsor: Bob Franks (R-NJ).
Referred to the Committee on Judiciary.

* Senate Bills *

S. 6. Patients' Bill of Rights Act of 1999. Requires health plans andinsurers to protect confidentiality of medical records and allowpatient access. Sponsor: Tom Daschle (D-SD). Referred to theCommittee on Health, Education, Labor, and Pensions.

S. 22. Government Secrecy Reform Act of 1999. Sets new rules onclassification. Sponsor: Daniel Patrick Moynihan (D-NY).

S. 187. Financial Information Privacy Act of 1999. Requires FDIC toset privacy rules. Sponsor: Paul Sarbanes (D-MD).

S. 300. Patients' Bill of Rights Plus Act. Sets privacy protections.
Prohibits genetic discrimination. Sponsor: Trent Lott (R-MS). Referredto the Committee on Finance.

S. 326. Patients' Bill of Rights Act. Sets privacy protections.
Prohibits genetic discrimination. Sponsor: James Jeffords (R-VT).
Referred to the Committee on Finance.

[8] Upcoming Conferences and Events

Encryption Controls Workshop. February 8, 1999. San Jose, CA.
Sponsored by the U.S. Dep't of Commerce. Contact: (202) 482-6031
FC '99: Third Annual Conference on Financial Cryptography. February22-25, 1999. Anguilla, B.W.I. Contact:

Electronic Commerce and Privacy Legislation -- Building Trust andConfidence. February 23, 1999. Ottawa, Canada. Sponsored by RileyInformation Services.

Communitarian Summit. February 27-28, 1999. Arlington, Virginia.
1999 ASAP Western Regional FOIA and Privacy Training Conference.
February 28 - March 3, 1999. Portland, Oregon. Contact:

CYBERSPACE 1999: Crime, Criminal Justice and the Internet. March 29& 30, 1999. York, UK. Sponsored by the British and Irish LegalEducation Technology Association (BILETA).

Computers, Freedom and Privacy (CFP) '99. April 6-8, 1999. Washington,
DC. Sponsored by ACM. Call for proposals available. Contact:

Encryption Controls Workshop. May 13, 1999. Raleigh, NC.
Sponsored by the US Dept of Commerce. Contact: (202) 482-6031
1999 EPIC Cryptography and Privacy Conference. June 14, 1999.
Washington, DC. Sponsored by EPIC. Contact:
Cryptography & International Protection of Human Rights (CIPHR'99).
August 9-13, 1999. Lake Balaton, Hungary. Contact:

Subscription Information

The EPIC Alert is a free biweekly publication of the ElectronicPrivacy Information Center. To subscribe or unsubscribe, send emailto with the subject: "subscribe" (no quotes) or"unsubscribe". A Web-based form is available at:
Back issues are available at:

About EPIC

The Electronic Privacy Information Center is a public interest researchcenter in Washington, DC. It was established in 1994 to focus publicattention on emerging privacy issues such as the Clipper Chip, theDigital Telephony proposal, national ID cards, medical record privacy,
and the collection and sale of personal information. EPIC is sponsoredby the Fund for Constitutional Government, a non-profit organizationestablished in 1974 to protect civil liberties and constitutionalrights. EPIC publishes the EPIC Alert, pursues Freedom of InformationAct litigation, and conducts policy research. For more information,
e-mail, or write EPIC, 666Pennsylvania Ave., SE, Suite 301, Washington, DC 20003. +1 202 544 9240(tel), +1 202 547 5482 (fax).

If you'd like to support the work of the Electronic Privacy InformationCenter, contributions are welcome and fully tax-deductible. Checksshould be made out to "The Fund for Constitutional Government" and sentto EPIC, 666 Pennsylvania Ave., SE, Suite 301, Washington, DC 20003.

Your contributions will help support Freedom of Information Act andFirst Amendment litigation, strong and effective advocacy for the rightof privacy and efforts to oppose government regulation of encryptionand expanding wiretapping powers.

Thank you for your support.

END EPIC Alert 6.02


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