Lobbying
Tech Firms Vow To Continue Fight Over Stock Options
     Technology companies opposed to treating employee stock options as expenses say they are not abandoning their efforts to delay, reverse or modify that mandate, which was finalized this week. The final rules from the Financial Accounting Standards Board (FASB) include only a few minor changes from the version promulgated in October. Under the rule, all publicly traded companies must use one of FASB's recommended approaches to valuing options. "FASB's new expensing standard simply will not work," said Rick White, chairman of the International Employee Stock Options Coalition. FASB reports to the Securities and Exchange Commission (SEC), and next year tech groups such as AeA and the Semiconductor Industry Association will press the SEC, the Bush administration and Congress to intervene in the dispute over stock options.

Telecom
FCC's Latest Attempt At Phone Rules Pleases Neither Side
     The FCC decided to phase out a program designed to spur local telephone competition but to preserve core elements of the "unbundling" framework designed to let rivals to the dominant Bell companies compete in business markets for telecommunications services. The regulations, approved on a 3-2 vote, are the agency's fourth attempt to govern competition under the 1996 Telecommunications Act. The federal D.C. Circuit Court of Appeals in March overturned prior FCC rules more favorable to Bell competitors. The new order, which satisfied neither the Bell competitors nor consumer groups, eliminates the previous requirement that telecom companies provide local phone circuits to long-distance phone rivals like AT&T and MCI. Sen. John Sununu called the decision "bad news" for competitors to the Bells.

Broadband
FCC Paves Way For High-Speed Web Access On Airplanes
     The FCC adopted new rules for licensing electromagnetic spectrum for communication between aircraft and earth-bound stations, paving the way for airplanes to offer high-speed Internet services to passengers. Under the new spectrum rules, an auction will be held allowing two competitors to offer broadband services to passengers. The agency also examined a separate ban on cellular telephones but did not take formal action. The Federal Aviation Administration has a pre-existing ban on the use of cellular devices that remains in effect. Also this week, Sprint officially announced that it plans to buy the mobile telephone company Nextel Communications for close to $36 billion.

Telecom
BellSouth CEO Urges Largely Deregulatory Environment
     Congress should revise telecommunications law to create an investment-friendly regulatory landscape and to correct flaws in the system that funds universal telephone service "before that mechanism totally unravels," a telecom executive said. Fees tacked onto telephone bills for the universal service fund "should be broadened to include all service providers," including companies that offer Internet telephone service, BellSouth CEO Duane Ackerman said in a keynote speech at a telecom forum. He added that Congress must insist that companies offering Internet telephony comply with "important social responsibilities" like providing emergency 911 service and that they be subject to digital wiretapping capabilities specified by the FBI and FCC. Ackerman's general message was deregulation, and he said telecom policy set in Washington is far removed "from where the business is today and where it's actually going."

On the Hill
Tech Industry Gives Generally High Marks To 108th Congress
     Technology industry experts generally laud lawmakers for meeting some of the industry's greatest demands in the 108th Congress but have a few criticisms, too. Tech pundits found that the industry fared well in key trade agreements and as a result of lawmakers focusing on copyright protection and tax incentives to spur reinvestment in the United States. "We won some important victories" on taxes and trade agreements, said Hank Cox of the National Association of Manufacturers. The United States signed deals with Australia, Chile, Morocco and Singapore. Industry pundits point to other accomplishments, too -- language to spur job creation, extend the research and development tax credit, continue funding for manufacturing assistance centers, blunt certain taxes on the Internet and encourage companies with overseas branches to reinvest profits from those branches in the United States. But they said Congress fell short on cyber security and patent reform.

Intellectual Property
Court Ruling Backs Google In Spat Over Internet Ads
     A U.S. district court judge ruled that the Google search-engine firm may continue to sell Internet advertisements that appear on its site when users search for trademarked company names. Google was up against the Geico auto insurer, which claimed that it should not be legal for Google to publish ads for competing insurance companies on the Google Web site when Geico's name is typed into the Google search box. Geico said Google's AdWords program, which displays the rival ads under a "sponsored links" heading, creates confusion. Brinkema said both parties could still try to settle remaining issues, such as whether ads that pop up and use Geico in their text are a violation of trademark law.

Intellectual Property
Movie Industry Sues Index-Server Operators Over Piracy
     Members of the Motion Picture Association of America (MPAA) launched a round of lawsuits against people who allegedly facilitate copyright infringement on the Internet. The movie studios filed suit against people who operate servers that index millions of copies of pirated films and television programs online, and who use the software programs BitTorrent, eDonkey and DirectConnect to accomplish that task. The suits were filed in multiple jurisdictions in the United States and the United Kingdom. "Today's actions are all aimed at central server operators," said John Malcolm, MPAA's senior vice president and director of worldwide anti-piracy operations.

Lobbying
File-Sharing Group Unveils Consumer Education Plan
     A trade association representing the file-sharing industry unveiled a consumer Web site designed to educate consumers on how to treat images of child pornography should they find them on file-sharing networks. The move is one of several initiatives undertaken by the Distributed Computing Industry Association, (DCIA) and the trade group P2P United. The efforts aim to assuage lawmakers' concerns over the exploitation of file-sharing networks by pirates, pedophiles and child pornographers. The new system enables file-sharing programs to link to the P2P Patrol educational Web page and a system that enables people to report inadvertent porn discoveries to law enforcement authorities. The clearinghouse for the reports will be the National Center for Missing and Exploited Children.

Security
Department Seeks Industry Input On Cargo Security Plan
     The Homeland Security Department called on the cargo industry to help develop a national strategy to protect America's supply chain. "This is a job beyond the scope of one federal department," Homeland Security Secretary Tom Ridge told a group of U.S. owners and operators of cargo and distribution companies. The job also will require the collective efforts of the private sector, local governments and the international community to protect America's economic security, he said. To begin the push for the strategy, Ridge presented a working paper to cargo industry stakeholders during the first of a two-day meeting hosted by the Homeland Security Institute, which provides systems and technological analyses to the department.