International
U.S., China Agreements Praised; Industry Remains Watchful
     U.S. industry sources expressed optimism about relations with China after a high-level meeting of U.S. and Chinese officials that included agreements by China to address digital piracy and postpone an exclusionary wireless encryption standard. The industry sources also vowed to monitor China's progress carefully. The agreement was announced after the Joint Commission on Commerce and Trade, which involved Chinese Foreign Commerce Minister Wu Yi, Commerce Secretary Donald Evans and U.S. Trade Representative Robert Zoellick. The deal commits China to "major steps" to reduce copyright piracy, according to industry sources. "China has committed to tangible, specific steps to address the rampant piracy of copyrighted works," Mitch Bainwol, RIAA chairman and CEO, said. "If fully implemented, this will be a landmark announcement and a real victory for composers, record companies, artists and other copyright owners in China. We look to the Chinese government to ensure that future deeds match present words and commitments."

White House
Science Adviser Defends Policies As Sen. Daschle Attacks
     White House science adviser John Marburger defended the Bush administration's record on science and technology policy at a science policy conference, highlighting budget increases for research and technology and rejecting recent charges that administration science policy is politically motivated. But Senate Minority Leader Thomas Daschle, D-S.D., attacked the administration's record on science policy -- from its specific positions on global warming and stem-cell research to what Daschle called a neglect of general research and development funding at the expense of increased defense spending and tax cuts for the wealthy. Marburger, head of the Office of Science and Technology Policy, noted that under the Bush administration, R&D budgets have risen 44 percent over four years. Daschle delivered a lengthy and partisan attack on the Bush administration and what he called an overall failure to articulate the importance of science to the everyday lives of Americans.

Digital Television
FCC Members Air Digital TV Differences In Rare Exchange
     The FCC has not been able to make decisions in the transition to digital television because the commissioners disagree about which of the two remaining disputes they need to resolve first. Broadcasters want cable and satellite companies to show multiple digital programs and not just the single analog program required under a 1992 law upheld by the high court. Cable and satellite companies oppose the requirement that they carry more than one program. Commissioner Kevin Martin said the agency must decide now to require that cable and satellite systems carry all of the broadcasters' "multicast" signals, a technology that permits about six digital programs instead of one analog program. Commissioner Jonathan Adelstein disagreed, insisting that the FCC first decide the "public interest" obligations of broadcasters, such as whether they must air civic and political programs. The other two FCC commissioners, Kathleen Abernathy and Michael Copps, said both matters must be tackled jointly.

Security
Two Cabinet Secretaries Seek Delay Of Passport Deadline
     Secretary of State Colin Powell and Homeland Security Secretary Tom Ridge argued that for diplomatic and economic reasons, lawmakers must extend a deadline for requiring citizens from key foreign allies traveling to the United States to carry passports with advanced technology imbedded into them. "What I am requesting of you today is that you and the members of your committee recognize that the deadline of Oct. 26, 2004, is not only unrealistic, it is counterproductive," Powell told House Judiciary Committee Chairman James Sensenbrenner, R-Wis., and other panel members at a hearing that featured rare, joint testimony of two Cabinet officials. Powell said the Judiciary panel should revise a 2002 law by extending the deadline from this fall to November 2006. The statute requires that passports from "visa waiver" countries include embedded chips with biographical information and photographs designed to confirm the identities of travelers.

On The Hill
Greenspan Urges Congress Not To Interfere In Stocks Debate
     Federal Reserve Board Chairman Alan Greenspan said it would be a "bad mistake" for Congress to impede efforts by the Financial Accounting Standards Board (FASB) to require public companies to report the value of employee stock options. His testimony underscored a sharp difference of opinion with lawmakers who favor legislation that would block FASB's expensing proposal. "As best I can judge, the FASB changes in recommendations with respect to accounting procedures strike me as correct, and it's not clear to me what the purpose of Congress is in this procedure," Greenspan said during a Joint Economic Committee hearing. But in a separate hearing, Louisiana Republican Richard Baker, chairman of the House Financial Services Capital Markets Subcommittee offered "no apologies" for his legislation to prohibit the Securities and Exchange Commission from recognizing FASB's proposed stock-options rule unless an economic impact study is completed. "I happen to personally believe it is the right thing to do," Baker said of his legislation, which is similar to a Senate bill.

Antitrust
Microsoft Hints At Possible Appeal Points For European Ruling
     Microsoft has shed light on the potential direction of its coming appeal of a European antitrust decision against the software firm. A new brief from the company argues that the decision will hinder innovation and create new laws and precedents. "The [European] decision creates new law in an effort to justify unprecedented regulatory intervention with respect to the integration of new functionality into finished products by a dominant firm," Microsoft said in the brief. "The decision opens the door to intrusive regulation of product design -- not to mention a record fine -- based on a complaint by a single component supplier, even when this integration is the market norm and other suppliers continue to grow," the company wrote. "Such a result, if allowed to stand, would almost certainly spell bad news for the European and global economies." The company's analysis -- sent to legal analysts, elected officials and other interested parties -- came as the European Commission competition directorate prepared to publicly release its 300-page decision this week.