On the Hill
House Passes Bill To Block New Rules On Stock Options
     The House passed legislation that would overturn a proposed change in the accounting rules that govern the corporate treatment of employee stock options. The 312-111 vote came after lawmakers rejected three amendments introduced by critics of the measure. But House leaders addressed one criticism of the bill, H.R. 3574, when House Financial Services Committee Chairman Michael Oxley, R-Ohio, introduced a "manager's amendment" to continue letting companies itemize and estimate the value of all stock-option grants. The underlying legislation targets a proposal of the body that oversees the nation's accounting standards requiring all public companies to treat stock options as expenses on their balance sheets. The bill would overturn the proposal and instead mandate the expensing of options granted only to companies' top five officers.

Trade
Senate Passes U.S.-Morocco Free-Trade Agreement
     The Senate passed the U.S.-Morocco free-trade agreement by a margin of 85-13. Industry groups hailed the wide margin as an indication of congressional support for trade agreements as a benefit for the U.S. economy. The Morocco agreement also is viewed as a building block toward a Middle East regional trade agreement. Melika Carroll, the trade policy director at Intel, said Morocco is ahead of other North African countries on high-tech deployment because of deregulation of telecommunications licenses and tech programs involving Intel and other companies. The pact also would take steps to further open the telecom services market, expand the standards for e-commerce and reduce technical barriers to trade. Last week, the Senate passed a trade agreement with Australia.

Health
Secretary Sets Groundwork For Computerizing Records
     Tommy Thompson, the head of the Health and Human Services Department, unveiled a report designed to lay the groundwork to move the healthcare system "out of manila folders and into computers." The report, called a "framework for strategic action" to develop electronic medical records, outlines a series of goals to realize President Bush's call earlier this year for every American to have e-health records within the next decade. Also on the health front, a Government Accountability Office report has found that the volume of pharmaceuticals that pass through U.S. borders make it impossible for officials to inspect each package that contains controlled substances. And at a National Governors Association forum, Leon Panetta, the former chief of staff to President Clinton, said the Bush administration's mishandling of the budget has wreaked havoc on the ability to reform the U.S. healthcare system, jeopardizing the effort to get health records online.

On The Hill
House, Senate Approve FY05 Defense Appropriations
     The House and Senate approved the fiscal 2005 $417.5 billion Defense appropriations conference bill, sending it to President Bush for his signature. The House passed it on a voice vote and the Senate approved it 96-0. The bill, which represents a funding cut of $1.6 billion from Bush's budget request, includes $25 billion in emergency funding for troops and equipment in Iraq and Afghanistan. It also initiates a major recapitalization of Army and Marine Corps ground forces, providing $1.5 billion above the president's budget request for combat and tactical vehicles, helicopters, and ammunition production. Of this amount, $235.8 million is intended to pay for National Guard and reserve equipment.

Security
Improved Info Sharing A Must According To Report
     The independent commission investigating the Sept. 11, 2001, terrorist attacks issued a 585-page report that recommends a "sweeping overhaul of intelligence services." The panel proposed the implementation of a National Counter-terrorism Center and the appointment of a national intelligence director to help streamline productivity and accountability in the intelligence community. "We need changes in information sharing," Commission Vice Chairman Lee Hamilton said. The report also addressed the need for improved information sharing among government agencies, biometric and scanning technologies, and the completion of a visitor tracking program.

Telecom
Senate Panel Votes To Limit State Rules On Net Phones
     The Senate Commerce Committee approved a narrower version of legislation designed to pre-empt states from regulating Internet telephone calls, but the sponsor said the primary change "effectively guts the bill." The approved measure is a substitute version of a bill, S. 2281, authored by John Sununu, R-N.H. The altered version would limit the pre-emption of state rules on voice-over-Internet protocol (VoIP) to three years. Sununu introduced the substitute with the support of Ted Stevens, R-Alaska, and Maria Cantwell, D-Wash. The new measure says that for three years, states may not regulate VoIP services. It includes an exception permitting states to enforce consumer-protection laws. And thanks to the adoption of two amendments, states also could require that VoIP subscribers be able to place emergency 911 calls, and states could continue to impose taxes and tariffs on VoIP providers.

Digital Television
Senate Commerce Passes Satellite Measure
     The Senate Commerce Committee unanimously passed legislation renewing satellite companies' ability to transmit distant television broadcasts, and granting a new right to beam high-definition digital television (HDTV) signals when they offer local digital shows and broadcasters do not. Spearheaded by Sen. John Ensign, R-Nev., and introduced with the support of committee Chairman John McCain, R-Ariz., S. 2644 is the first of the four satellite bills this session that include the "digital white areas" provision sought by satellite company Echostar. Ensign's revised version of the bill, which passed on a voice vote, also included a provision calling for 18-month phase-out of Echostar's practice of using two satellite dishes to retransmit local signals. The House version of the bill would end that practice within one year. Under the revised version introduced at the markup after negotiations with Sen. Ted Stevens, R-Alaska, and others, satellite companies would only obtain this right to transmit in the digital white areas when they retransmit local broadcasters' signals.

Digital Television
Lawmakers Back Firm Deadline For Digital Transition
     Completing America's slow-motion transition to digital television may require a firm deadline for broadcasters to vacate the frequencies they currently use to send analog TV signals, leaders of the House Energy and Commerce Committee said. Their statements came in a subcommittee hearing that examined how Berlin made the transition to digital TV in 18 months, versus 17 years and counting for the United States. And they accompanied the release of a Government Accountability Office report on the German transition that underscored the need for a firm deadline. Committee Chairman Joe Barton, R-Texas, restated his preference that Dec. 31, 2006, become a "hard" deadline for broadcasters to stop transmitting in analog and send only digital signals. Barton specifically criticized language in the 1997 law establishing 2006 as a target date that said broadcasters need not vacate electromagnetic spectrum unless 85 percent of a city's households view digital broadcast signals. Less than 2 percent of Americans currently do.

Telecom
AT&T Withdraw From Some Telecom Markets Concerns Coalition
     AT&T's withdrawal from some telephone markets will hurt small businesses and residential consumers nationwide, according to the Promoting Active Competition Everywhere (PACE) Coalition. PACE Chairman Peter Karoczkai said if the 1996 Telecommunications Act is not moderated soon, the impact on the telecom industry will be "devastating," a word also used in a release by Gene Kimmelman, a senior director at Consumers Union. Kimmelman said the Bush administration's refusal to appeal a court case on telecom rules could result in local phone monopolies. Karoczkai said his fundamental concern is the success of smaller competitors in the telecom market. The PACE Coalition consists of competitors to the Bells. Also this week, the FCC said it is considering temporary telecommunications rules that would let the dominant Bell telephone companies raise the rates they charge competitors to share the Bell networks for offering local phone service.