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News from the StatesThis online newsletter is a product of NCSL's Communications, Technology and Interstate Commerce CommitteeFall EditionIn this Issue:
COMMITTEE UPDATE Communications, Technology and Interstate Commerce Committee Begins New Year The newly installed officers of the Communications, Technology and Interstate Commerce Committee have identified a variety of emerging information technology and telecommunications issues to address during the 2003 - 2004 Committee year. See Committee Focus on the Committee web page for details. At the NCSL Fall Forum, December 9-12th in Washington, DC, the Committee will hold programs on interstate taxation, E-911, telemarketing, spam, local competition, and streamlining IT operations to save dollars. Updates on the meeting will be added to the Committee web page. Registration and housing information is available through the NCSL web site. If you have questions about the Committee, contact NCSL Committee staff Jo Anne Bourquard jo.anne.bourquard@ncsl.org (Denver) or Neal Osten neal.osten@ncsl.org (Washhington, DC).
COMPUTER CRIME & SECURITY Since this spring, two more states--Arkansas and Florida--have enacted legislation broadening the Digital Millennium Copyright Act (DMCA), bringing the total number of states with similar laws to nine. These measures, dubbed "Super DMCA" laws, make it a crime to possess "unlawful communication and access devices." Super DMCA laws expand the provisions of the federal Digital Millennium Copyright Act and allow communication service providers to limit connections to the Internet, cable or satellite television lines. The bills forbid four general categories of activity:
Supporters of Super DMCA laws maintain that they update cable and satellite
protection acts by keeping pace with today's hacking technologies. They
see the proposed acts as a way to stop theft of cable and cellular phone
service. Supporters also maintain that the measures would apply only to
services that require payment. Thus, pirated movies on free file-sharing
networks wouldn't be covered. And violations of service agreements would
remain contractual breaches.
- Submitted by Janna Goodwin 
Identity Theft: The Numbers In a recent survey of over 4,000 people, conducted by Synovate, 4.6 percent of respondents reported being a victim of identity theft in the last year. This percentage suggests that almost 10 million Americans have discovered they were victimized in the last year. Almost 13 percent discovered that they were victimized in the last five years. The Federal Trade Commission (FTC) reports that identity theft is the fastest growing white-collar crime. The survey categorized identity theft into three types. The most serious, New Accounts and Other Frauds, involved misusing personal information to open new credit accounts or new loans and misusing identifying information when charged with a crime, renting an apartment or obtaining medical care. The second category addressed the misuse of an existing credit card account or credit card number. The final category involved the misuse of an existing non-credit card account, such as a checking or savings account. More than half of those individuals who fall into the first category, New Accounts and Other Frauds, also experienced the misuse of existing credit card or non-credit card accounts. Interestingly, only 22 percent of victims contacted one or more credit bureaus once they discovered their information had been misused. And of those, 62 percent reported that one or more of the credit bureaus placed a fraud alert on their credit report. Only a slightly higher percentage, 26 percent, reported the misuse to their local law enforcement agency. The study also found that the sooner the theft was discovered, the less time it took to resolve the problem. Victims in the more serious category required significantly more time for resolution - nearly half used 10 hours or more to resolve the problems. To speed up resolution, victims indicated a need for more information about preventing and responding to identity theft and improvements in law enforcement investigations. In addition, many victims recommended stiffer penalties for identity theft offenders. The text of the survey can be found at: http://www.ftc.gov/os/2003/09/synovatereport.pdf - Submitted by Heather Morton
Identity Security: How Do We Know You Are Who You Claim to Be? Citizens, governments and businesses count on the validity of identification systems as the cornerstone of the economy and the provision of government services. Having reliable laws, processes and systems for verifying the identity of individuals is an essential requirement for government and commercial transactions. When ID authentication systems don't work, it provides the opportunity for ID theft, invasion of privacy and other forms of crime. According to a Federal Trade Commission survey, one in four U.S. households has been a victim of identity theft, costing individuals $5 billion, an average of 30 hours resolving the problem, and substantial damage to their credit. Financial institutions lost nearly $48 billion last year, which pushes credit card interest rates higher for all customers. Faulty authentication systems also thwart public policy when, for example, background checks of prospective employees for nursing homes or day care centers aren't effective enough in weeding out undesirable individuals. In addition, when ID authentication systems don't work, it can lead to more serious kinds of crime. NCSL will hold a Special Briefing on Identity (ID) Security on Friday, December 12, 2003 at the Fall Forum in Washington, DC. - Submitted by Blake Harrison, Pam Greenberg and Jo Anne Bourquard
INFORMATION TECHNOLOGY & INTERNET Pennsylvania Child Pornography Law Challenged A Pennsylvania law enacted in 2002 has been challenged as unconstitutional in a suit filed by the Center for Democracy and Technology (CDT), the ACLU of Pennsylvania and a Pennsylvania Internet service provider. The Pennsylvania law requires Internet service providers (ISPs) to remove or disable access to child pornography when notified by the Commonwealth Attorney General that such materials have been identified on their networks. The challenge, filed in the U.S. District Court of the Eastern District of Pennsylvania, and summarized on the CDT Web site, argues that the Pennsylvania law violates constitutional principles of free speech and due process and the U.S. Commerce Clause. Requiring ISPs to block such sites may result in blocking web sites completely unrelated to child pornography sites, because many Internet web sites share their Internet Protocol (or "IP") addresses with many other unrelated web sites. A temporary restraining order has been issued preventing the Pennsylvania Attorney General from imposing additional blocking orders on Internet Service Providers until final disposition of the case. In a denial to an administrative appeal requesting disclosure of the Internet web sites blocked, the Pennsylvania Attorney General noted that the law was enacted specifically to address the difficulty of identifying and prosecuting a child pornography Web site and its operators, since the web site can be located anywhere in the world and can change computers and locations anytime. - Submitted by Pam Greenberg
Is State Government Next To Be Shipped Overseas? Have you telephoned your Internet service provider lately? If you have, chances are the person on the other line was based in India. Food stamp recipients and other users of state services are finding themselves in contact with overseas call centers as well. A side effect of globalization is the offshoring of jobs to cheaper labor markets. The manufacturing sector was the first to experience this phenomenon, but the improvement in communication technologies has made it easier for companies to ship service sector jobs abroad as well. Companies are setting up call centers overseas staffed with young professionals who demand a fraction of what their American counterparts are paid. State governments have also participated in this trend to lower costs, a situation that is augmented by the fact that all but three states are suffering from budget shortfalls. This is a classic policy dilemma for state government-cut state agency overhead costs or protect tax payer funded jobs. Seven states have introduced legislation prohibiting agencies from outsourcing to companies that use non-American citizens or non-legal workers. The states are Connecticut, Florida, Maryland, Michigan, North Carolina, New Jersey and New York. - Submitted by Justin Marks
New NASCIO Report to Aid IT Funding The National Association of State Chief Information Officers (NASCIO) has released Innovative Funding for Innovative State IT: New Trends and Approaches for State IT Funding to assist states in finding new ways to fund Information Technology (IT) projects. NASCIO surveyed the states on the types of funding models they are currently using; this report includes results from the twenty-three states that responded. It provides details about eleven innovative funding models and case studies on how each model has been implemented by a state. The states that provided case studies for this publication are Massachusetts, Texas, Minnesota, Tennessee, Ohio, Missouri, Delaware, Arizona and Hawaii. The appendices include checklists to give states a starting point for implementing each funding model. To obtain a copy, contact Mary Gay Whitmer at NASCIO, mwhitmer@amrinc.net or (859) 514-9209. - Submitted by Jo Anne Bourquard
INTERSTATE TAXATION Sales Tax Collection Simplification Senate Majority Leader Bill Frist assured NCSL that consideration of S.1736 would occur early in 2004. S.1736, sponsored by Wyoming Senator Mike Enzi and North Dakota Senator Byron Dorgan, authorizes states that have passed implementing legislation to collect state sales and use taxes from remote sellers. - Submitted by Neal Osten
Internet Tax Moratorium Expires The current moratorium on state and local government taxation of Internet access was due to expire November 1st. Bipartisan legislation, S.150, sponsored by Senators George Allen, R-Virginia and Ron Wyden, D-Oregon, would redefine Internet access and make the moratorium permanent. Sponsors of S. 150 were forced to pull their bill from floor consideration as differences over the definition of Internet access, neutral treatment of all Internet access providers, and the length of a moratorium (permanent vs. a two to five year long temporary) halted floor debate on Nov. 10th. If the Senate fails to adopt S. 150, many fear the less state-friendly House version, H.R.49, will be attached to an omnibus spending bill. H.R. 49 repeals the grandfather clause that protects the 10 states that currently tax access, and it broadly redefines Internet access to address DSL and wireless Web access to the Internet. - Submitted by Neal Osten
California Enacts Online Privacy Protection Act California is the first state to require commercial Web sites to post and follow privacy policies. A.B. 68, enacted in September 2003, affects Web site operators who collect personally identifiable information about California consumers. The law requires that the policies: 1) identify the types of information the site collects, 2) describe the process for consumers to review and request changes to information collected, if they have such a process, 3) describe how the Web site will notify consumers of changes to the privacy policy, and 4) identify the effective date of the policy. The law defines "personally identifiable information" as:
Opponents of the law argue against state regulation of the Internet, maintaining that the California law could lead to online privacy laws in other states, making it difficult or impossible for Web site operators to comply with inconsistent or contradictory laws. In addition, the law could open the door to frequent or frivolous lawsuits. - Submitted by Pam Greenberg
Florida Supreme Court Ruling on E-Mail as Public Record Most state public records laws do not explicitly address whether e-mail belonging to legislators and government employees is considered a public record, so court rulings on this issue are closely watched. In October, the Florida Supreme Court ruled that personal e-mail of government employees using government computers is not a public record. In State of Florida v. City of Clearwater, the justices ruled that only e-mails related to government business are public records. The court noted the "absurd consequences" of applying the public records law to personal business in the workplace: "If a Senator writes a note to herself while speaking with her husband on the phone does it become public record because she used a state note pad and pen?" The decision did not address who should determine which e-mails are public or private, leaving the decision up to the employees themselves or their bosses. The court also cited a February 2003 Florida District Court of Appeals decision, Media General Operation Inc. v. Tom Feeney, Speaker of the House in its ruling. In Media General, a news organization sought the cellular phone records of five employees of the Florida House of Representatives. The phones were used by the staff members for both personal calls and official calls, but the staff turned over only those records related to business calls. The court ruled that the staff were not required to turn over records related to personal calls, given the law's definition of public records as "all documents...made or received ...in connection with the transaction of official business by any agency." - Submitted by Pam Greenberg
Privacy Protections in State Constitutions Congress and the states have enacted laws to protect individuals' privacy in a variety of specific areas, such as medical and financial records, drivers' records, video rental records, and children's activities on the Internet, among others. However, state constitutions that address privacy can provide a greater level of privacy protection for individuals-greater than that provided by the U.S. Constitution. Constitutions in ten states --Alaska, Arizona, California, Florida, Hawaii, Illinois, Louisiana, Montana, South Carolina, and Washington--expressly recognize a right to privacy. - Submitted by Pam Greenberg
The United Way of Connecticut offers an integrated 211 system to help by telephone - a single source for information about community services, referrals to human services and crisis intervention. Aloha United Way 211 offers help finding food, shelter, drug treatment, childcare and job training. And, in October 2003, the Mile High United Way in Colorado kicked off the new 211 non-emergency telephone number for people seeking assistance on utility bills, rent and medical bills. The 211 system is similar to the 911 emergency line. It works from any telephone and sends callers to a central location where they are connected to people who can provide social service information. The number can also direct people who want to volunteer to appropriate agencies. A national 211 bill introduced in the United States Senate in September 2003 would set aside $200 million to make the service available nationwide. Currently, 23 states have limited 211 service and several states are considering ways to expand the service. - Submitted by Bob Boerner
Broadband Deployment and Development -State Update Currently, more than 11 million homes use broadband service. Tax credits and state subsidies have been offered to those companies that provide broadband technology to hospitals, libraries or schools. For example, Idaho offers a tax credit for investment in broadband equipment (Section 63-3029I). And, Michigan provides for a Broadband Development Authority (Section 484.3201). At least seven states including Idaho, Maryland, Mississippi, Nevada,
Oregon, South Carolina, and Virginia passed related broadband legislation
in 2003. The Idaho law (H.B. 225) amends the existing law on tax credits
for investment in broadband equipment. The Maryland law (H.B. 697) provides
for the membership on the task force on broadband communications deployment
in underserved rural areas. The Mississippi law (S.B. 2979) creates the
State Broadband Technology Development Act. And, the Oregon Legislative
Assembly (H.B. 2304) established a state policy for broadband telecommunications
services.
- Submitted by Bob Boerner
Bundled as a package with television programming and Internet access, major cable television companies are now offering Internet telephone service to their residential customers. The cost of the services offered by this emerging technology, called voice over the Internet protocol (VoIP), is less expensive than regular phone service. With VoIP, voices are chopped into digital packets that are sent over the Internet and reassembled at the other end Local telephone companies are at a disadvantage to Internet telephone companies, some industry analysts argue, because they pay tariffs and are regulated as a public service. Internet telephone services are not regulated in the same fashion. For example, Vonage, an Edison, New Jersey company with 56,000 Internet telephone subscribers, recently challenged the Minnesota Public Utilities Commission's right to regulate its technology. The court held that Vonage is an "information service provider" and not a "telecommunications services provider." Therefore, the court determined the state public utilities commission may NOT regulate an information service provider. The Federal Communications Commission (FCC) plans to hold a hearing on Internet telephone services this fall. - Submitted by Bob Boerner |
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