[Congressional Record (Bound Edition), Volume 145 (1999), Part 7]
[Extensions of Remarks]
[Pages 10524-10527]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 10524]]

 H.R. 1858, THE CONSUMER AND INVESTOR ACCESS TO INFORMATION ACT OF 1999

                                 ______
                                 

                            HON. TOM BLILEY

                              of virginia

                    in the house of representatives

                         Thursday, May 20, 1999

  Mr. BLILEY. Mr. Speaker, we hear the phrase quite often that ``we 
live in the Information Age.'' This is true because of advances in 
technology in recent years. Digital technology--and more specifically, 
the Internet--has brought a world of libraries and magazines and 
newspapers and on-line stock trading to consumers' living rooms.
  And while technology played a critical role in paving the way for the 
Information Age, it's clear that access to the information itself is 
just as important. Consumers use the Internet to price shop, to compare 
mortgage rates, to buy stocks, and for a variety of other commercial 
activities. The underlying ingredient to all of these activities is 
information. Without it, electronic commerce would still be a twinkle 
in Bill Gates' eye.
  It is therefore critical that Congress take great care when it enacts 
laws that relate to consumers' access to information. Along with my 
colleagues on the Committee on Commerce, Messrs. Dingell, Tauzin, 
Markey, Oxley, and Towns, I am introducing legislation that ensures 
that consumers and investors will continue to have full access to 
information when they surf the Web.
  H.R. 1858, the Consumer and Investor Access to Information Act of 
1999, provides new protection to publishers of electronic databases, 
while ensuring that public access to information will not be limited by 
publishers' asserting a proprietary right over facts and information, 
which historically have been part of the public domain. The bill's 
anti-theft protections will also protect institutions like the stock 
exchanges from hackers and pirates seeking to undermine the integrity 
of the data they disseminate to the public.
  Mr. Speaker, we live in the Information Age. We must keep 
information--like stock quotes--readily available to consumers on the 
information superhighway. Millions of Americans depend on information 
they obtain over the Internet to help them make important investment 
decisions. This bill will ensure that consumers and investors continue 
to have access to this information.
  Mr. Speaker, Americans should not have to pay tolls for public 
information obtained on the information superhighway. Facts and 
information should remain toll-free on the information superhighway. 
Facts and information like stock quotes have been, and under H.R. 1858, 
will continue to remain readily available to the public.
  Mr. Speaker, in addition to my statement, I am submitting for the 
Record a background piece on, as well as a section-by-section analysis 
of, H.R. 1858. I urge my colleagues to join me, along with the rest of 
the bipartisan leadership of the Committee on Commerce, in supporting 
this legislation.

 H.R. 1858, The Consumer and Investor Access to Information Act of 1999


          The Importance of Information to Electronic Commerce

       Economists have long recognized that one of the great 
     obstacles to the efficient operation of markets is imperfect 
     information. A consumer might pay too much for an item 
     because he or she was unaware of the lower price being 
     charged for the item at another store, and the transaction 
     cost of visiting all the stores to determine which charged 
     the least exceeded the savings of buying at the least 
     expensive store. This problem has become more significant as 
     markets have become more complex. The need for information on 
     which to base economic decisions is greater now than ever 
     before.
       One of the great virtues of electronic commerce is that it 
     has the potential to provide its participants with much more 
     information at much lower cost than is available in more 
     traditional forms of commerce. This additional information 
     will allow for the much more efficient operation of markets 
     for capital, labor, and goods. If a small businessman is 
     seeking a loan, the Internet will allow him to learn the 
     terms offered by banks all over the country. If a computer 
     programmer is looking for a job, the Internet will allow him 
     to learn about opportunities in distant cities. And if a 
     homeowner needs to buy a new refrigerator, the Internet will 
     provide him with the prices in stores throughout the region. 
     This information will obviously benefit both the purchaser 
     and the seller of goods and services. We have seen some of 
     these benefits in the last five years, and they will only 
     accelerate in the years to come.
       One of the most explosive areas of growth that consumers 
     have benefitted from through the Internet is in the area of 
     securities investing. According to a recent study, the number 
     of households with people trading on the Internet has nearly 
     tripled, to 6.3 million in the last 16 months. And the same 
     study reported that 20 million households use the Internet 
     for investment news, quotes and ideas. This access to 
     information about the stock market has empowered investors 
     and given them greater control over their finances. Studies 
     have reported that investors feel increasingly secure about 
     their investment decisions as they use the Internet to 
     monitor their portfolios, follow news about their holdings 
     and obtain other information about their investments.
       Indeed, the Internet will make it so much easier for people 
     to access information that they will be confronted with a new 
     problem--too much information. Accordingly, people will need 
     tools for locating and organizing the information into useful 
     forms. Otherwise, the information will be overwhelming. Such 
     tools already exist in the form of databases, search engines, 
     and webcrawlers, and these tools are becoming more 
     sophisticated to keep up the information that is flooding the 
     Internet.
       The basic information policy of this country--a policy that 
     has existed since the writing of the Constitution--has served 
     many communities, including the Internet and electronic 
     commerce, extremely well. Our long-standing policy says that 
     facts cannot be ``owned.'' Instead, they are in the public 
     domain. Accordingly, a database publisher can visit the site 
     of every bank in a state, extract data concerning each bank's 
     loan programs, and construct a larger database with loan 
     information for all the banks. Another database publisher can 
     then extract some of that information, and combine it with 
     other information--for example, loan programs from out-of-
     state banks, or customer service ratings of the banks)--to 
     create a new, more useful database which promotes commerce.
       This information policy facilitates electronic commerce at 
     an even more fundamental level. The culture of science 
     involves combining new data with existing databases to create 
     more powerful research tools. Allowing scientists to reuse 
     facts, rather than requiring them to ``reinvent the wheel,'' 
     ensures that research moves forward. Research and development 
     is the foundation of all commercial activity.


                    The Need for Limited Legislation

       Although the existing information policy generally 
     functions well in the context of the Internet and electronic 
     commerce, there is one potential problem. Digital technology, 
     which makes the Internet and electronic commerce possible, 
     also increases the likelihood of unfair competition in the 
     database publishing marketplace. Current law provides some 
     protection against unfair competition. For example, the 
     selection, coordination, and arrangement of facts in a 
     database are often protected by copyright. In addition, 
     databases may be protected by license, technological measures 
     (e.g., encryption and watermarks), the state common law of 
     misappropriation, trademark, and trade secret.
       But notwithstanding these many legal remedies, there are 
     complaints that systematic unauthorized commercial copying of 
     databases, particularly comprehensive databases stored in 
     digital form, may sometimes go unremedied because of gaps in 
     current law. H.R. 1858, the Consumer and Investor Access to 
     Information (CIAI) Act of 1999, is designed to plug a hole 
     that exists in current law.
       Because databases are items of commerce in their own right, 
     and are critical tools for facilitating electronic commerce--
     indeed, in all commerce--Congress must assure that database 
     publishers have sufficient protection against unfair 
     competition. At the same time, the protection for databases 
     must not go so far as to protect the individual facts 
     contained in the database. These must be available for a 
     variety of second generation uses. Otherwise, those engaged 
     in second generation uses--from a value-added publisher, to a 
     research scientist, to the consumer who compiles his own 
     database when comparing characteristics of different cars--
     would have to either pay a license fee, or somehow ``re-
     discover'' the facts themselves. This would amount to ``a tax 
     on information.'' Moreover, it would represent a radical 
     departure from our information policy that has made us the 
     most technologically advanced nation in world history.
       Accordingly, Title I of H.R. 1858 prohibits a person from 
     selling or distributing a duplicate of a database collected 
     and organized by another person that competes in commerce 
     with the original database. The legislation defines a 
     duplicate of a database as a database which is substantially 
     the same as the first database. Further, a discrete section 
     of a database may also be treated as a database. Thus, H.R. 
     1858 prevents the distribution of pirated databases which 
     could threaten investment in database creation. At the same 
     time, it does not prevent reuse of information for purposes 
     of creating a new database.
       The issue of protecting databases is especially significant 
     to the securities markets, an issue that is addressed in 
     Title II of H.R. 1858. This is because of the proliferation 
     and growing importance of on-line investing. Recent 
     statistics have shown that on-line trading now accounts for 
     nearly 1 out of every 7

[[Page 10525]]

     equity trades (about 14%) and is growing rapidly, with an 
     increase of over 34% in on-line activity in the last quarter 
     over the previous quarter.
       Having access to real-time stock quotes is essential to on-
     line investors. Investors cannot make informed buy-and-sell 
     decisions without knowing the price of the stock they are 
     trying to buy or sell. The way on-line investors get this 
     information is generally through the website of their on-line 
     broker. Investors typically do not pay for this service. The 
     brokers who provide this information to their on-line 
     investing customers, however, do pay a fee. They pay the 
     stock exchanges for access to the ``feed'' of real-time stock 
     quotes. (``Real-time'' stock quotes are to be distinguished 
     from those provided on a delayed basis, for which stock 
     exchanges typically do not charge a fee.)
       While the Federal securities laws provide the regulatory 
     structure under which the dissemination of securities 
     transaction data to the public is governed, they do not 
     provide protection for the exchanges or other market 
     information processors against pirates of that market data. 
     In order to protect the exchanges and other market 
     information processors against hackers or others who would 
     undermine the integrity of the data they disseminate or 
     threaten their ability to disseminate that data, Title II of 
     H.R. 1858 provides a limited cause of action that enables 
     market information processors to stop, and collect damages 
     from, a person who disseminates data that he has obtained 
     from a market information processor without that market 
     information processor's authorization.
       Because market information processors provide market data 
     to parties by means of contractual arrangements, and thus 
     have the ability to seek redress under contract law in the 
     event that a contracting party disseminates the market data 
     in a manner that is noncompliant with the contract, the cause 
     of action that the bill provides is limited to actions 
     against parties with whom the market information processors 
     do not have a contract or other agreement (such as hackers). 
     Title II of H.R. 1858 also ensures that independently 
     gathered real-time market data can be disseminated without 
     triggering the bill's protections--thus ensuring that 
     individuals who develop a new database that they have not 
     gleaned from a market information processor will be free to 
     disseminate that database.
       Title II's limited scope provides necessary protection to 
     market information processors, without creating a new 
     property right over market data that would enable market 
     information processors to inappropriately limit the 
     dissemination of market data to public investors, such as on-
     line investors. These investors need market data, such as 
     real-time stock prices, in order to make their investment 
     decisions.

                Section-by-Section Analysis of H.R. 1858

       Section 1: Short Title. The short title of H.R. 1858 is the 
     ``Consumer and Investor Access to Information Act of 1999.''


          Title I--Commerce in Duplicated Databases Prohibited

       Section 101: Definitions. Section 101(1) defines a 
     ``database'' as a collection of discrete items of information 
     (information is defined in Section 101(3)) that have been 
     collected and organized in a single place, or in such a way 
     as to be accessible through a single source. The collection 
     and organization must have required investment of substantial 
     monetary or other resources, and it must have been performed 
     for the purpose of providing access to those discrete items 
     of information by users of the database. The term database 
     does not include textbooks, articles, biographies, histories, 
     scientific articles, other works of narrative prose, 
     specifications, and other works that include items of 
     information combined and ordered in a logical progression or 
     other meaningful way in order to tell a story, communicate a 
     message, represent something or achieve a result.
       Section 101(1) also makes clear that a discrete section of 
     a database may also be treated as a database. For example, if 
     a directory of restaurants in the District of Columbia is 
     organized by type of food, the section comprising Italian 
     restaurants could constitute a database within the meaning of 
     the statute, even though it is part of a larger database 
     (i.e., the D.C. restaurant directory).
       Section 101(2) defines ``a duplicate'' of a database as a 
     database which is substantially the same as the original 
     database, and was made by extracting information from the 
     original database. A database need not be identical to 
     another database in order to be considered ``substantially 
     the same as'' the original database.
       Section 101(3) defines ``information'' as facts, data, or 
     other intangible material capable of being collected and 
     organized in a systematic way. Works of authorship are 
     excluded from the definition of information. Such works--both 
     individually and collectively--are adequately protected by 
     copyright. Section 101(4) defines ``commerce'' to mean all 
     commerce which may be lawfully regulated by the Congress.
       The definition of ``in competition with'' in Section 101(5) 
     has two components. First, the database must displace 
     substantial sales of the database of which it is a duplicate. 
     Second, the database must significantly threaten the 
     opportunity to recover a return on the investment in the 
     collecting or organizing of the duplicated database. Thus, 
     a duplicate of a database uploaded onto the Internet 
     without authorization could be in competition with the 
     underlying database (even if the Internet duplicate is 
     available without charge) if it displaces substantial 
     sales and threatens the opportunity to recover a return on 
     the investment in the first database.
       Section 101(6) defines two types of ``government 
     databases.'' First, the term includes databases collected and 
     maintained by the United States of America, or any agency or 
     instrumentality thereof. Second, the term also includes a 
     database that is required by Federal statute or regulation to 
     be collected or maintained, to the extent so required.
       Section 102: Prohibition Against Distribution of 
     Duplicates. Section 102 sets forth the core prohibition 
     against the sale or distribution to the public of duplicated 
     databases. Under Section 102, it is unlawful for any person, 
     by any instrumentality or means of interstate or foreign 
     commerce or communications, to sell or distribute a database 
     that is a duplicate of a database collected and organized by 
     another person, and that is sold or distributed in commerce 
     in competition with that other database. Section 102 is 
     intended to achieve a necessary balance between (1) promoting 
     fair competition in the database publishing market, and (2) 
     ensuring consumers have unfettered access to facts and 
     information.
       Section 103: Permitted Acts. Section 103 sets forth a 
     variety of permitted acts. Section 103(a) clarifies that 
     nothing in Title 1 of the DFCA restricts a person from 
     selling or distributing to the public a database consisting 
     of information obtained by means other than by extracting it 
     from a database collected and organized by another person.
       Subsection 103(b) limits the application of this title to 
     news reporting. It provides that nothing in the title shall 
     restrict any person from selling or distributing to the 
     public a duplicate of a database for the sole purpose of news 
     reporting, including news gathering and dissemination, or 
     comment, unless the information duplicated in time sensitive 
     and has been collected by a news reporting entity, and the 
     sale or distribution is part of a consistent pattern engaged 
     in for the purpose of direct competition.
       Subsection 103(c) specified that nothing in Title I shall 
     prohibit an officer, agent, or employee of the United States, 
     a state, or a political subdivision of a State, or a person 
     acting under contract of such officers, agents, or employees, 
     from selling or distributing to the public a duplicate 
     database as part of lawfully authorized investigative, 
     protective, or intelligence activities.
       Subsection 103(d) provides that no person or entity who, 
     for scientific, educational, or research purposes, sells or 
     distributes to the public a duplicate of a database, shall 
     incur liability under this title so long as the conduct is 
     not part of a consistent pattern engaged in for the purpose 
     of direct commercial competition.
       Section 104: Exclusions. Section 104 provides for 
     exclusions to Section 102's prohibition. Subsection 104(a)(1) 
     provides that protection for databases under Section 102 does 
     not extend to government databases, as such databases are 
     defined in Section 101(6). Subsection 104(a)(2) clarifies 
     that the incorporation of all or part of a government 
     database into a non-government database does not preclude 
     protection for the portions of the non-government database 
     which came from a source other than the government database. 
     Section 104(a)(3) provides that Title I does not prevent 
     Federal, state, or local government from establishing by law 
     or contract that a database funded by Federal, state, or 
     local government shall not be subject to the protections of 
     this title.
       Subsection 104(b) excludes databases related to Internet 
     communications. In particular, under Subsection 104(b), 
     protection does not extend to a database incorporating 
     information collected or organized to perform (1) the 
     function of addressing, routing, forwarding, transmitting or 
     storing Internet communications, or (2) the function of 
     providing or receiving connections for telecommunications.
       Most databases stored in digital form require computer 
     programs for their use. Paragraph 104(c)(1) therefore 
     provides that protection for databases under Section 102 
     shall not extend to computer programs (as defined in 17 
     U.S.C. Sec. 101), including computer programs used in the 
     manufacture, production, operation or maintenance of a 
     database. Further, any element of a computer program 
     necessary for its operation is not protected.
       At the same time, Paragraph 104(c)(2) explains that a 
     database that is otherwise subject to protection under 
     Section 102 does not lose that protection solely because it 
     resides in a computer program. However, the incorporated 
     database receives protection only so long as it functions as 
     a database within the meaning of Title I (i.e., a collection 
     of discrete items of information collected for the purpose of 
     providing access to those discrete items by users), and not 
     as an element necessary to the operation of the computer 
     program.
       Subsection 104(d) provides that protection for databases 
     under Section 102 does not prohibit the sale or distribution 
     to the public of

[[Page 10526]]

     any individual idea, fact, procedure, system, method of 
     operation, concept, principle, or discovery. Finally, under 
     subsection 104(e), provides that protection for databases 
     under Section 102 does not extend to subscriber list 
     information.
       Section 105: Relationship to Other Laws. Section 105 
     explains the relationship of the DFCA to other laws. 
     Subsection 105(a) makes clear that, subject to the preemption 
     under Subsection 105(b), nothing in Title I affects a 
     person's rights under the laws of copyright, patent, 
     trademark, design rights, antitrust, trade secrets, privacy, 
     access to public documents, misuse, and contracts. Subsection 
     105(b) preempts state laws inconsistent with the DFCA's 
     prohibition in Section 102.
       Section 105(c) provides that, subject to the provisions on 
     misuse in Subsection 106(b), nothing in Title I shall 
     restrict the rights of parties freely to enter into licenses 
     or any other contracts with respect to the use of 
     information. Subsection 105(d) makes clear that Title I of 
     the DFCA does not affect the operation of the 
     Communications Act of 1934, or the authority of the 
     Federal Communications Commission.
       Section 106: Limitations on Liability. Section 106 sets 
     forth limitations on liability for violations of Section 102. 
     Subsection 106(a) provides that a provider of 
     telecommunications or information services (within the 
     meaning of Section 3 of the Communications Act of 1934 (47 
     U.S.C. 153)), or the operator of facilities therefore, shall 
     not be liable for a violation of Section 102 if such provider 
     or operator did not initially place the database that is the 
     subject of the violation on a system or network controlled by 
     the provider or operator.
       Subsection 106(b) limits the liability of a person for a 
     violation of Section 102 if the person benefiting from the 
     protection afforded by Section 102 misused that protection. 
     Subsection 106(b) sets forth six nonexclusive factors a court 
     should consider in determining whether a person has misused 
     the protection provided by Section 102.
       Section 107: Enforcement. Section 107 authorizes the 
     Federal Trade Commission to take appropriate actions under 
     the Federal Trade Commission Act to prevent violations of 
     Section 102.
       Section 108: Report to Congress. Section 108 directs the 
     Federal Trade Commission to report to Congress within 36 
     months of enactment on the effect Title I has had on 
     electronic commerce and the domestic database industry.
       Section 109: Effective Date. Section 109 provides that 
     Title I of H.R. 1858 shall take effect on the date of 
     enactment of this Act, and shall apply only to the sale or 
     distribution after that date of a database that was collected 
     and organized after that date.


                Title II--Securities Market Information

       Section 201: Misappropriation of Real-Time Market 
     Information. Section 201 of H.R. 1858 amends Section 11A of 
     the Securities Exchange Act of 1934 by adding a new 
     Subsection 11A(e), entitled ``Misappropriation of Real-Time 
     Market Information.'' Subsection 11A(e) prohibits the 
     misappropriation of real-time market information from a 
     market information processor, establishes liability on the 
     part of any person who violates the prohibition, and provides 
     a market information processor with a variety of remedies 
     against the violator. This provision expressly permits 
     certain acts that are not included in the prohibition, namely 
     independent gathering of market information and news 
     reporting of market information. The subsection also limits 
     the cause of action provided by the bill to apply only to 
     parties with whom the market information processor does not 
     have a contract regarding the real-time market information or 
     other right the market information processor is seeking to 
     protect.
       Paragraph 11A(e)(1) imposes liability on any person who 
     obtains, directly or indirectly, real time market information 
     from a market information processor, and directly or 
     indirectly extracts, sells, distributes or redistributes, or 
     otherwise disseminates such real-time market data without 
     the authorization of the market information processor. The 
     prohibition in Paragraph 11A(e)(1) would not apply to a 
     person who merely obtained, directly or indirectly, real-
     time market information from a market information 
     processor, but did not disseminate the information in any 
     way.
       Paragraph 11A(e)(2) sets forth the remedies that a market 
     information processor is authorized to assert against any 
     person who misappropriates real-time market information in 
     violation of Paragraph (1). In particular, under Subparagraph 
     11A(e)(2)(A), an injured person would be authorized to bring 
     a civil action in an appropriate United States district 
     court, except that any action against a State governmental 
     entity may be brought in any court that has jurisdiction over 
     claims against such entity. Subparagraph 11A(e)(2)(B) 
     authorizes any court having jurisdiction of a civil action 
     under Section 11A(e) to grant temporary and permanent 
     injunctions, according to principles of equity and upon such 
     terms as the court may deem reasonable, to prevent a 
     violation of Paragraph 11A(e)(1). Under Subparagraph 
     11A(e)(2)(C), a plaintiff would be permitted to recover money 
     damages sustained by the plaintiff when a violation of 
     Paragraph (1) was established in a civil action. And under 
     Subparagraph 11A(e)(2)(D), a court, in its equitable 
     discretion, would be authorized to order disgorgement of the 
     amount of defendant's monetary gain directly attributable to 
     a violation of Paragraph (1) if the plaintiff is not able to 
     prove recoverable damages to the full extent of the 
     defendant's monetary gain.
       Paragraph 11A(e)(3) would exclude two types of legitimate 
     activity from the scope of the bill--the independent 
     gathering of real-time market information and news reporting. 
     Under Subparagraph 11A(e)(3)(A), no person would be 
     restricted from independently gathering real-time market 
     information, or from redistributing or disseminating such 
     independently gathered information. A person would be 
     considered to obtain real-time market information 
     ``independently'' only to the extent that such information 
     was not obtained, directly or indirectly, from a market 
     information processor. In addition, under Subparagraph 
     11A(e)(3)(B), no news reporting entity would be restricted 
     from extracting real-time market information for the sole 
     purpose of news reporting, including news gathering, 
     dissemination, and comment, unless the extraction was part of 
     a consistent pattern of competing with a market information 
     processor in the distribution of real-time market 
     information. Thus, news organizations that limit their use of 
     real-time market information to legitimate reporting of the 
     news would not be subject to liability.
       Paragraph 11A(e)(4) establishes the relationship of 
     Subsection 11A(e) with a variety of other Federal and State 
     laws that also may address the dissemination of real-time 
     market information. Subparagraph 11A(e)(4)(A) provides that 
     Subsection 11A(e) would exclusively govern the unauthorized 
     extraction, sale, distribution or redistribution, or other 
     dissemination of real-time market information and would 
     supersede any other Federal or State law, whether statutory 
     or common law, to the extent that such other Federal or State 
     law is inconsistent with Subsection 11A(e). This subparagraph 
     would not preempt State law that is not inconsistent with 
     Subsection 11A(e) (e.g., State law governing trademark or 
     trade dress). In addition, under Subparagraph 11A(e)(4)(B), 
     Subsection 11A(e) would not limit or otherwise affect 
     the application of any provision of the federal securities 
     laws or the rules or regulations thereunder, and would not 
     impair or limit the authority of the Securities and 
     Exchange Commission. Thus, the Commission's existing 
     authority over distributors of market information, 
     including its authority over fees charged for market 
     information, would continue unchanged.
       Subparagraph 11A(e)(4)(C) provides that the constraints 
     that are imposed by Federal and State antitrust laws on the 
     manner in which products and services may be provided to the 
     public, including those regarding the single suppliers of 
     products and services, would not be limited in any way by 
     Subsection 11A(e). In addition, under Subparagraph 
     11A(e)(4)(D), the rights of parties to enter freely into 
     licenses or any other contracts with respect to the 
     extraction, sale, distribution or redistribution, or other 
     dissemination of real-time market information would not be 
     restricted. Thus, the bill preserves all rights under state 
     contract law.
       Paragraph 11A(e)(5) limits the actions that may be 
     maintained pursuant to section 11A(e). Pursuant to 
     Subparagraph 11A(e)(5)(A), a civil action under Subsection 
     11A(e) would have to be commenced within one year after the 
     cause of action arises or the claim accrues. And under 
     Subparagraph 11A(e)(5)(B), a civil action for the 
     dissemination of market information would be precluded if 
     such information was not real-time market information. Thus, 
     the bill does not limit in any way, or provide any cause of 
     action regarding, the use and dissemination of delayed market 
     data. Finally, Subparagraph 11A(e)(5)(C) precludes a civil 
     action by a market information processor against any person 
     to whom such processor provides real-time market information 
     pursuant to a contract between the two parties, but only with 
     respect to any real-time information or any right that is 
     provided pursuant to the contract. Market information 
     processors would continue to have available their contractual 
     remedies regarding persons with whom they have a contract, 
     but would not be afforded new remedies under Subsection 
     11A(e) against these persons with respect to rights covered 
     by that contract.
       Paragraph 11A(e)(6) defines several terms used in section 
     11A(e) that are not defined elsewhere in the Exchange Act. 
     The term ``market information'' is defined in Subparagraph 
     11A(e)(6)(A) to mean information with respect to quotations 
     and transactions in any security, the collecting, processing, 
     distribution, and publication of which is subject to the 
     Exchange Act. Under Subparagraph 11A(e)(6)(B), the Securities 
     and Exchange Commission may, consistent with the protection 
     of investors and the public interest, prescribe by rule the 
     extent to which market information shall be considered to be 
     real-time market information for purposes of Subsection 
     11A(e), but in promulgating any such rule, the Commission 
     must take into account the present state of technology, 
     different types of market data, how market participants use 
     market data, and other relevant factors. This requirement is 
     designed

[[Page 10527]]

     to ensure that any rule that the Commission promulgates 
     regarding real-time market data does not hinder access by 
     investors to such data, and maximizes the access by investors 
     to all market data, including real-time and delayed market 
     data. In the absence of Commission action, the determination 
     of whether market information is real-time market information 
     would be left to the courts with jurisdiction over civil 
     actions under Subsection 11A(e) to interpret the plain 
     language of the term ``real-time.''
       Finally, the term ``market information processor'' with 
     respect to any market information is defined in Subparagraph 
     11A(e)(6)(C) to mean the securities exchange, self-regulatory 
     organization, securities information processor, or national 
     market system plan administrator that is responsible under 
     the Exchange Act or the rules or regulations thereunder for 
     the collection, processing, distribution, and publication of, 
     or preparing for distribution or publication, of such market 
     information.
       Section 202: Effective Date. This section provides that the 
     new Subsection 11A(e) shall take effect on the date of the 
     enactment of H.R. 1858, and shall apply to acts committed on 
     or after that date. Furthermore, no person shall be liable 
     under Subsection 11A(e) for the extraction, sale, 
     distribution or redistribution, or other dissemination of 
     real-time market information prior to the date of enactment 
     of this bill, by that person or by that person's predecessor 
     in interest.

     

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