OVERNIGHT TECH: Piracy, radio royalty fees on Nadler's radar

THE LEDE: Rep. Jerrold Nadler (D-N.Y.) said he took the opportunity to be ranking member on the House Judiciary subcommittee on the Internet because he sees a rare chance to make bipartisan progress, including on intellectual property issues such as Internet piracy and radio royalty fees.

“The area of intellectual property law is one of the few areas in this Congress where divisions don’t seem to go along party lines" and “there’s the possibility of passing substantive legislation," Nadler told The Hill.

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The House Judiciary Committee is in the middle of examining copyright law, an effort led by Chairman Bob Goodlatte (R-Va.). Nadler has been an active member on the debate over compensating musical artists for their work and said he anticipates pressing the issue as ranking member.

Currently, AM/FM radio stations do not pay royalty fees to musicians when the radio stations play songs. Nadler — like his predecessor on the subcommittee, Rep. Mel Watt (D-N.C.), who left Congress to lead the Federal Housing Finance Agency — has floated legislation that would change the royalty fee system.

Nadler said he is circulating a draft bill similar to a previous version that would require radio stations to pay increased royalty fees if they maintain Internet radio stations.

“I may introduce Mel’s bill," he said, referring to Watt's bill that would require all radio stations to pay royalty fees. "Those are complimentary approaches, really.”

Nadler also said he anticipates discussing attempts to curb online piracy and protect copyright holders. 

“We have to find a different approach then the one that exploded a couple of years ago," he said, referring to the Stop Online Piracy Act (SOPA) debate. “It is conceivable we may make some progress."

Patents make for another issue that is likely to resurface, Nadler said. Earlier this year, the House passed a patent reform bill authored by Goodlatte. The Senate Judiciary Committee is now considering a companion patent reform bill from its chairman, Sen. Patrick Leahy (D-Vt.).

“It’s going to come back up at some point," he said. "Whether this Congress, I don’t know."

Neiman Marcus lobbying on data breach: Upscale retailer Neiman Marcus has hired a lobbying firm to help it discuss a data breach that affected as many as 1.1 million people last year. The Texas-based store has hired the law firm of Brownstein Hyatt Farber Schreck to represent it on a “data security incident,” according to a lobbying disclosure report released on Tuesday.

This month, the store notified the public that more than a million people may have had their credit or debit card data stolen during a three-month breach last year. Target and the craft store Michaels have also warned people that some of their customers’ data may have been stolen in similar hacks last year.

The revelations have raised concern on Capitol Hill and at regulatory agencies, and calls have mounted for a new data security law to protect shoppers after their personal information is stolen.    

Rockefeller scolds Target: Sen. Jay Rockefeller (D-W.Va.) is “puzzled” why Target has not reported its holiday shopping season data breach to the Securities and Exchange Commission (SEC). In a letter to the retailer on Tuesday, the Senate Commerce Committee chairman wrote that the company’s apparent decision not to tell its investors how the hack affected its business “does not seem consistent with the spirit or the letter of the SEC’s financial disclosure rules.”

Under 2011 guidance issued by the SEC, companies are required to disclose details about data breaches “that a reasonable investor would consider important to an investment decision.” An SEC example of what type of breaches might warrant public disclosure “appears to precisely describe” the hack that affected Target, Rockefeller wrote.

Rockefeller has previously pressed Target on details of the hack, which jeopardized the personal and financial details of as many as 110 million people.

Embattled bitcoin operator resigns: Charlie Shrem, who was arrested over the weekend for helping to launder money to buy drugs, resigned from his post as vice chairman of the advocacy group Bitcoin Foundation on Tuesday.

“While Charlie has contributed a great deal of personal effort and resources to enhance the adoption of Bitcoin worldwide, a prolonged legal dispute would inevitably detract from advancing that core mission,” Executive Director Jon Matonis said in a post on the organization’s blog.

On Monday, the Justice Department announced that Shrem, 24, had helped to exchange $1 million in bitcoins so that people could buy drugs on the illicit online marketplace Silk Road. Advocates of bitcoin said on Tuesday that Shrem’s arrest should not reflect poorly on the virtual currency as a whole.

Early adopters of bitcoins were “hobbyists and enthusiasts” who may not have understood their regulatory responsibilities, said Jerry Brito, a senior researcher at George Mason University’s Mercatus Center, during a panel discussion at the State of the Net conference.

“I hope we don’t judge the second generation based on some of the actions of the first generation businesses,” he said. “Certainly we shouldn’t be judging the technology itself, because the technology is neutral.”

Bitcoins only exist online but can be exchanged for cash or used to buy goods and services at some retailers. Shrem ran a bitcoin exchange, BitInstant, that he used to help another man obtain bitcoins for drug deals online.

SpyEye creator pleads guilty: A Russian man pleaded guilty to having created malicious software that infected more than 1.4 million computers around the globe, the Justice Department announced. Aleksandr Panin admitted to creating the SpyEye malware, which was built to allow thieves to steal online banking and credit card information, among other sensitive data.

“As several recent and widely reported data breaches have shown, cyber-attacks pose a critical threat to our nation’s economic security,” U.S. Attorney Sally Yates said in a statement. “Today’s plea is a great leap forward in our campaign against those attacks.”

Panin was arrested in July while transferring through Atlanta’s Hartsfield-Jackson International Airport.

FTC updates online guide for kids: The Federal Trade Commission (FTC) has a new version of its consumer guide for parents looking to talk with their children about what to do on the Internet. The free booklet, first published in 2009, includes tips on using mobile applications, text messages and public wireless Internet.

The FTC is giving the guide away at its bulk order site

 

ON TAP

The U.S. Chamber of Commerce is holding an event with Sen. Orrin Hatch (R-Utah) Wednesday morning to unveil its 2014 International Intellectual Property Index. 

At 10:00 a.m., the Senate Intelligence Committee will hold an open hearing on worldwide threats featuring the heads of the FBI, CIA, the director of national intelligence and other leaders of the intelligence community.

Privacy and Civil Liberties Oversight Board Chairman David Medine will discuss “privacy and civil liberties in the post-Snowden era” in a 6:00 p.m. event at George Washington University.

 

IN CASE YOU MISSED IT

Rep. Jerrold Nadler (D-N.Y.) has been selected as the new ranking member of the House Judiciary subcommittee on Courts, Intellectual Property and the Internet. 

Privacy concerns top President Obama’s full plate of tech issues, as he prepares to deliver his State of the Union address. 

Federal regulations threaten to strangle the growth of the Internet economy, Republican lawmakers warned. 

Sen. Rand Paul (R-Ky.) will file his class-action lawsuit against the National Security Agency “hopefully within the next week," he said.

FCC Chairman Tom Wheeler pledged to take a “dynamic” approach to regulating the way that Internet service providers treat different websites. 

 

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