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The U.S. House of Representatives is preparing to vote as soon as Thursday on a mammoth higher-education funding bill that contains new antipiracy obligations for most universities.

Only this time around, it appears that an attempt may be made to water down the thorny new requirements included in the College Opportunity and Affordability Act (PDF). It's not clear, however, that such changes, if adopted, would be enough to appease university officials concerned about the measure.

Here's the deal: right now, a small section of the bill, which sailed through the House Education and Labor Committee last fall, dictates that universities participating in federal financial-aid programs "shall" devise plans for "alternative" offerings to unlawful downloading--such as subscription-based services--or "technology-based deterrents to prevent such illegal activity."

That requirement raised serious alarms among some university officials and fair-use advocates, who worried that schools ran the risk of being docked financial aid for their students if they failed to come up with the requisite plans. The bill's sponsors, for their part, have long disputed that interpretation and say carrying out the antipiracy plans has no bearing on a school's financial aid eligibility.

According to the House Rules Committee, Rep. Steve Cohen (D-Tenn.), a member of a House intellectual-property panel, hopes to offer an amendment (PDF) that attempts to confront those concerns. It says no higher-education institution "shall be denied or given reduced federal funding for student loan or other financial-aid programs" because of "noncompliance" with the antipiracy requirements.

The offering of Cohen's amendment is just preliminary, and it will be up to the Rules Committee to decide at a meeting scheduled for later on Wednesday whether the proposal and dozens of other proposed amendments will be cleared for a vote on the House floor.

The amendment's introduction drew positive first impressions from the fair-use advocacy group Public Knowledge. "We're pleased that Congressman Cohen brought this to the Rules Committee," said Art Brodsky, the organization's communications director. "It would be to the benefit of the membership and the university community if the Rules Committee lets it go to the floor."

But Educause, a group that advocates for the information technology interests of schools, wasn't convinced. Vice President Mark Luker said the Cohen amendment doesn't change his organization's staunch opposition to the antipiracy requirements, which the higher-education community continues to view as "unacceptable," and Educause still wants that provision completely eliminated.

It wasn't immediately clear whether there is any connection between the new amendment and recent reports that the Motion Picture Association of America had significantly overstated the damage caused by piracy at the nation's universities. Cohen's office didn't immediately respond to requests for comment.

But MPAA spokeswoman Angela Martinez said her organization believes that there's no need for any changes to the bill text.

"The language in this provision of the bill should remain as it is because universities are accustomed to the reporting requirements of the HEA (Higher Education Act), and this provision is not unlike reporting on binge drinking or campus safety, and this new provision simply adds digital theft to that reporting list," Martinez said. "Universities will have many opportunities to meet the requirements before a loss of financial aid would occur."

If last year's action on a companion bill in the Senate is any indicator, though, universities may have a good chance of getting their way in this situation.

Under siege by universities, Senate Majority Leader Harry Reid ultimately yanked a proposal that would have required colleges and universities--in exchange for federal funding--to use technology to "prevent the illegal downloading or peer-to-peer distribution of intellectual property." The final funding bill in that chamber merely instructs colleges to advise their students not to commit copyright infringement and to inform students of what they're doing to prevent "unauthorized distribution of copyrighted material" through campus networks.

The House bill's sponsors, for their part, have also stated publicly in the past that it's a "myth" that schools will lose their financial aid if illegal file sharing occurs on their networks or will be forced into using "alternative" file-sharing programs that cost them millions of dollars.

In a fact sheet distributed last year, they wrote, "The bill does not mandate the use of any programs by colleges. Colleges and universities are simply required to report their campus policies on intellectual-property theft, including their penalties, and to develop plans for addressing illegal file sharing. For schools that want additional assistance in stopping illegal file sharing, the bill creates a voluntary grant program."

WASHINGTON--What's wrong with Congress being a little stingy about doling out taxpayer dollars to universities if they let peer-to-peer file-sharing pirates run amok on campus networks?

Not a thing, says the Motion Picture Association of America's top lawyer in the nation's capital.

MPAA Washington general counsel Fritz Attaway

(Credit: Declan McCullagh/mccullagh.org)

On the heels of a House of Representatives committee's passage of a higher-education funding bill that includes new antipiracy obligations for universities that participate in federal financial aid programs, MPAA Washington general counsel Fritz Attaway suggested it's reasonable to condition federal education funding on copyright enforcement efforts.

"When the government is subsidizing universities...and it discovers that those universities are spending a lot of taxpayers' money to build digital networks that are being used primarily to allow college students to traffic in infringing content, I think it's perfectly legitimate for Congress to say, wait a minute, if we're giving you money, we don't want it to be used to help college kids infringe copyright," Attaway said during a panel discussion here Monday that was organized by the Federal Communications Bar Association.

At the same time, Attaway attempted to diffuse alarms universities and fair-use advocates are sounding about the House's higher-education bill. Embedded in the more-than-700-page bill is a requirement that universities devise plans for providing their students alternatives to illegal downloading and developing technology-based filters to keep offending content out of students' hands in the first place.

The MPAA vice president emphasized that there's technically no requirement under the bill that universities actually sign up for such "alternatives," namely subscription-based music services like Ruckus.com and Napster, nor that they actually activate the filters they're planning to develop. Committee aides close to the bill-drafting process have denied that schools would see their funding yanked if they didn't come up with satisfactory plans, even if Attaway seemed to suggest that wouldn't be a bad idea.

University representatives who oppose the provision have acknowledged, too, that they're not sure what exactly the punishment would be for failing to craft such plans, although some have read the bill to say their schools would no longer be eligible for at least some student financial aid programs.

Attaway's defense of the bill drew a sharp rebuke, however, from Gigi Sohn, president of the digital-rights advocacy group Public Knowledge. "Why do you put things in bills that you don't want to enforce at some point?" she asked. "Even if I agree, and I don't, that it's toothless, I don't want that language in there for some other Congress to give it some teeth."

There's still a chance that the Hollywood-backed provision won't survive any final version of the legislation. That's what happened when a similar proposal came before the U.S. Senate this summer. The full House is expected to debate the broader higher-education funding bill soon after it returns from its Thanksgiving recess in early December.

Eds. note: This story was updated at 8:07 p.m. PST to give an update on the expected committee vote time.

WASHINGTON--So far, a U.S. House of Representatives panel hasn't done anything to alter part of a bill that would deprive colleges and universities of financial aid for their students unless they make a plan to provide "alternatives" and deterrents to illicit peer-to-peer downloading.

Debate on a massive Democratic-sponsored higher education spending bill (PDF) began around 1:30 a.m. ET and continued late into the evening on Wednesday. But no amendments were expected to be introduced to change the antipiracy sections embedded in the 747-page text.

House Education and Labor Committee aides said final votes on the amendments and the entire bill are expected to begin at 9:45 a.m. ET Thursday.

Stay tuned to CNET News.com for the latest on this proposal, whose peer-to-peer requirements have raised concerns among the university community but are enthusiastically supported by Hollywood. For more coverage of the bill, check out our story from Friday evening.

WASHINGTON--A U.S. House of Representatives committee plans to vote Wednesday afternoon on a Hollywood-backed higher education bill that would deprive colleges and universities of their financial aid funding if they don't agree to provide deterrents and "alternatives" to peer-to-peer piracy.

A provision buried in the 747-page College Opportunity and Affordability Act (PDF) requires schools to devise a plan for providing "alternatives" to unlawful downloading--as well as "a plan to explore technology-based deterrents to prevent such illegal activity." Those requirements would be added to an existing list of conditions for receiving federal student financial aid.

A final vote in the House Education and Labor Committee could occur late Wednesday, but because of the bill's massive size, the meeting may continue into Thursday, committee aides said.

In effect, the bill as-is could pressure schools into signing up for monthly subscription services such as Ruckus and Napster. (Ruckus.com's chief executive, for his part, has endorsed the effort.)

University officials have voiced alarm at the prospect of losing a combined total of some $100 billion in federal financial aid if their plans don't pass muster. The Association of American Universities has voiced its disapproval to committee leaders through a letter last week, and Educause, a non-profit organization that focuses on technology use in education, has issued an action alert urging the requirements to be dropped.

At the moment, however, it appears the provisions stand a good chance of surviving the scheduled vote Wednesday. A committee aide said approximately 25 amendments are expected to be proposed at the meeting, but to her knowledge, none of them would alter the antipiracy requirements.

The bill's sponsors say it's a "myth" that schools will lose their financial aid if illegal file sharing occurs on their networks or will be forced into using "alternative" file-sharing programs that cost them millions of dollars.

In a fact sheet sent to CNET News.com by a committee aide on Wednesday, they wrote, "The bill does not mandate the use of any programs by colleges. Colleges and universities are simply required to report their campus policies on intellectual property theft, including their penalties, and to develop plans for addressing illegal file-sharing. For schools that want additional assistance in stopping illegal file sharing, the bill creates a voluntary grant program."

Check back with CNET News.com later on Wednesday as we track the bill's path.

Updated at 11:13 a.m. PDT: America's Internet access subscribers can breathe a sigh of relief: Congress isn't planning to allow taxes on your connection for another seven years.

With little debate, the U.S. House of Representatives on Tuesday voted 402-0 to pass an extension of an existing ban on Internet access taxes until 2014. The same proposal received unanimous approval in the Senate late last week.

The move comes just in the nick of time, as current law generally prohibiting state and local governments from levying the taxes was scheduled to expire Thursday.

The bill's next step is the president's desk, where it is expected to be signed swiftly into law. President Bush has long been an advocate of extending--or even making permanent--the ban.

House Speaker Nancy Pelosi (D-Calif.) touted the vote as granting the longest extension of the Internet tax moratorium in history, although just a few weeks ago, she and the bulk of her colleagues backed a four-year extension instead. "Unlike the Republican-controlled Congress, which allowed the moratorium on taxes on Internet access to expire for more than a year, the Democratic Congress voted today to extend the moratorium on time," she said in a statement.

Pelosi was referring to Congress' failure to reach agreement on a Net tax ban renewal bill in time to meet a 2003 expiration date, although it ultimately passed a retroactive four-year extension the next year.

House Republican Whip Roy Blunt (R-Mo.) said he was glad to see the seven-year ban but accused the Democrats of being "inconsistent" in their approach.

"When it comes to taxing the Internet, Republicans have not wavered in our belief that it ought not happen today, tomorrow, four years from now, or any time after that," he said in a statement. "Democrats in Congress have taken a far more 'nuanced' position on the matter, having decided that imposing new taxes on our digital economy right now is unpalatable, but that resurrecting the plan sometime in the future may hold greater promise."

Granted, not everyone is safe from taxes under the bill. States that already had Internet access taxes in place before the ban took effect several years ago would still be allowed to keep them through a grandfather clause in the bill. (Nine states--Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Texas, Washington and Wisconsin--fall into that category, according to the National Conference of State Legislatures.) Officials can also tax Internet services, albeit more indirectly, if they had already enacted broad-based laws on their books that tax the gross income or receipts of a business.

The bill isn't a blanket ban on all Internet-related taxation, either. It bars states from taxing services that provide a connection to the Internet, such as cable, DSL, and wireless-type services. But governments are free to tax "voice, audio, or video programming" that charges consumers a fee--such as IPTV and subscription-based Internet phone services--and basically any other "products and services" delivered over the Internet and not specifically exempted by the bill. (The bill also does not deal with the separate question of sales tax on goods purchased online.)

The politicians did opt to carve out from the possibility of taxing the following services: "home page electronic mail and instant messaging (including voice--and video--capable electronic mail and instant messaging), video clips, and personal electronic storage capacity, that are provided independently or not packaged with Internet access." That section was added at the last minute in response to concerns raised by Sen. Ron Wyden (D-Ore.), the original author of the tax ban, which dates back to 1998.

There has been little dispute among members of Congress this year over the need to extend the ban at least temporarily. But the weeks leading up to the bill's passage involved no shortage of largely partisan fighting--with the notable exception of Reps. Anna Eshoo and Zoe Lofgren, Democrats whose districts include Silicon Valley--over how long a renewed ban should last. Republicans continued pushing for a permanent moratorium, while Democrats said only a shorter ban could address concerns raised by state and local officials about the need to assess their tax bases amid changing technologies.

The House originally passed a four-year extension, but in the process, it denied other members the chance to offer amendments that would have made it longer. Republicans, particularly Rep. Bob Goodlatte (R-Va.), continued to grumble about the Democratic leadership's handling of the situation on the House floor. They argued that a permanent ban would have passed, had it been allowed for a vote, because a standalone bill proposing that policy has support from 242 politicians.

Not so simple
It may not have been quite that simple, as a number of the co-sponsors of that permanent ban voted against the proposal when the bill was being considered by the House Judiciary Committee a few weeks ago. In the end, the Democrats who previously put up a fight were willing to accept a longer extension of the ban.

"I am confident that the final product is good legislation that is pro-consumer, pro-innovation, and pro-technology," said Rep. John Conyers (D-Ill.), who led consideration of the House's four-year extension bill and previously resisted attempts by Republicans to make the ban lengthier than that.

Republicans in both chambers have vowed to continue pushing for a permanent ban on Internet access taxes.

"Today's vote is a temporary win for all Americans," said Rep. Lamar Smith (R-Texas). "The taxman has been delayed for seven more years. But he will come again. And when he does, I hope Congress will be prepared to make the Internet tax ban permanent."

The bill's approval drew accolades from telephone, cable, and Internet companies.

"This extension is a great bipartisan victory that will benefit millions of consumers and businesses," said Broderick Johnson, chairman of the Don't Tax Our Web Coalition, whose members range from Amazon.com and Google to Verizon Communications and T-Mobile USA . "Continuing the ban on Internet taxes will ensure that the gateway to the Internet remains tax-free in the vast majority of states and local jurisdictions."

State and local officials also greeted the bill's approval with praise. National Governors Association lobbyist David Quam said his organization would have preferred to see a four-year extension, but he said the bill "reflects a lot of our priorities." Namely, it's temporary, it "modernizes" the definition of what cannot be taxed (a reference to the provisions clarifying that VoIP and TV services transmitted over the Internet can be taxed), and it preserves the protections allowing states to keep their old taxes, he said.

"Overall," Quam told CNET News.com after the vote, "we've got a reasonable compromise."

As expected, the U.S. House of Representatives Judiciary Committee on Wednesday unanimously approved a bill aimed at criminalizing spyware used for malicious purposes.

An identical version of the Internet Spyware Prevention Act, chiefly sponsored by Reps. Zoe Lofgren (D-Calif.) and Bob Goodlatte (R-Va.) passed the full House in the last congressional session by a 395-1 vote.

The bill, which was approved by a House Judiciary subcommittee on Tuesday, proposes punishing those who sneak code onto computers without authorization in an attempt to "impair" the security protections on a machine, transmit personal information about the machine's user, or commit other federal crimes. Violations would carry prison sentences of up to five years.

The bill would also allocate $10 million for the Department of Justice in an effort to help it combat spyware, phishing and other online scams.

Congress has been attempting to pass antispyware bills since 2003. A different, more prescriptive bill--which has drawn opposition from online advertisers and skepticism from Lofgren and Goodlatte--is still pending.

Although high-tech companies like Microsoft, Symantec and Dell have applauded the proposal approved Wednesday, the need for new laws is less apparent.

In the past, the Federal Trade Commission has sued spyware purveyors and has suggested it already has ample authority in that area--although it has also asked Congress for beefed-up fining powers more recently. Justice Department prosecutors have also brought cases against spyware outfits in recent years.

The bill goes next to the full House for approval. It was not immediately clear when that would happen or what the Senate's plans will be. Previous attempts at enacting such legislation have failed because they died before Senate consideration.