Security
Homeland Security Unveils Grants To Aid States, Localities
     The Homeland Security Department announced the recipients of a multibillion dollar grant program to enhance the ability of state and local governments to tackle various threats. The department will dole out $1.7 billion in fiscal 2006 as part of the plan. The grant money is directed toward helping responders cover a wide range of costs, including training personnel, purchasing equipment and building critical infrastructure. The Urban Areas Security Initiative will receive the largest portion of the pot at $757.3 million. The New York City area is slated for $124.4 million, more than any other urban area in the country, but a steep decrease from $207 million last year. House Homeland Security Committee Chairman Peter King, R-N.Y., said the department and the administration have "declared war on New York" for its decision. Los Angeles, Chicago and Washington are the next largest beneficiaries of the initiative, which covers 46 urban areas. Washington also is marked for a decrease in grant funding. The area is slated to receive $46 million, down from $77.5 in fiscal 2005.

Taxes
IRS To Stop Collecting Phone Tax
     Treasury Secretary John Snow announced the IRS will stop collecting the 3 percent federal telephone excise tax on long-distance calls on July 31, and will refund to businesses and individual taxpayers all taxes collected during the past three years. Treasury estimates taxpayers will receive refunds totaling about $13 billion. Taxpayers will be able to apply for those refunds next year when they file returns for 2006, Snow said. Treasury reached the decision to discontinue the tax after long-distance phone customers successfully challenged the tax in several different federal appeals courts. The IRS has been under pressure to repeal the tax. Five U.S. Circuit Courts of Appeals had found the 3 percent surcharge on phone and cellular bills illegal.

Lobbying
Telecom Firms Fork Over Funds For Cable Campaign
     Telecom companies are spending serious green on advertising. They've been alerting Congress and their staffers to what they call a serious cause -- a grassroots campaign for lower cable and broadband rates. Arlen Communications estimates the costs of local TV ads at nearly $1 million per week. Arlen released a study estimating that the U.S. Telecom Association spent $250,000 a week over six weeks. The association represents most of the Bell telecom firms. Arlen believes AT&T spent $600,000 per week. TV4US, which bills itself as a grassroots coalition funded by a half-dozen corporate sponsors, spent $75,000 per week. The ads against net neutrality are more recent. These efforts are targeting proposed legislation that would block telecom and cable companies from charging preferred customers higher rates for high-speed Internet access. Telecom firms also have bought ads on blogs. Some bloggers allowed the ad -- and attacked it. One blogger wrote he was happy to take their money but told readers they could "ignore the telco ad to the right."

Lobbying
EBay Urges Users To Lobby On Network Neutrality
     The CEO of online auction powerhouse eBay turned to its members for help. EBay executive Meg Whitman issued a "call to action" in an e-mail to many of the service's registered users. She urged them to "personally get involved in a debate in the U.S. Congress" over network neutrality. Whitman said, "It might be hard to believe, but lawmakers in Washington are seriously debating whether consumers should be free to use the Internet as they want in the future." EBay is one of seven big technology companies pushing for strong network neutrality language to be added to the bill updating video franchising rules being considered by Congress. The other companies are Amazon.com, Google, InterActive, Microsoft, Yahoo and more recently Intel. The technology companies seek to bar Bell and cable companies from the currently legal practice of charging preferred companies for faster Internet delivery. The House is expected to vote on telecommunications legislation next week. The Senate Commerce Committee is considering similar legislation.

Business
U.S. Firms Lag In Adoption Of Financial Filing System
     Securities and Exchange Commission Chairman Christopher Cox repeatedly has encouraged the financial community to embrace an interactive filing system. The response has been lackluster. So far, about 21 U.S. firms are using the system, known as Extensible Business Reporting Language, or XBRL. Peter Wallison with the American Enterprise Institute said the European Union already has completed developing such a system. He noted that financial statements prepared with international financial reporting standards will be searchable in a way that U.S. financial systems are not. That lag could place U.S. companies at a further disadvantage in competing for capital with foreign companies. It also could compromise U.S. financial markets seeking the business of foreign issuers who can choose where they will list for trading. But Cox predicted there will be a significant jump in the number of firms adopting the system. He called the current low-tech system error-prone and time consuming.

Cyber Security
Government Reform Panel To Examine VA Breach
     The committee that gave the Veterans Administration an "F" for its computer security practices plans a hearing June 8 to ask for an update on the department's reforms. House Government Reform Committee Staff Director Dave Marin said the focus of the hearing will be whether tighter laws are needed to prevent another incident like the security breach in which personal data on 26.5 million veterans was stolen from a department employee's home. Since another hearing last week in the House Judiciary Committee, Congress has updated a data protection bill, H.R. 4127, to include federal agencies, not just private companies. The provision would require written notification of security breaches, but would not subject the feds to same regulations companies could face.

Education
Asian High School Students Beat U.S. In Math, Science
     The performance of U.S. high school students on math and science assessment tests lag behind those in Asia, according to a congressionally mandated report released by the Education Department. The report found that U.S. high school students also fare worse than many of their European counterparts. "U.S. 15 year olds had lower average scores in mathematics and science literacy compared with most of their peers from Organization for Economic Cooperation and Development member countries," states a research summary. However, fourth graders scored as well or above the majority of their international peers, concluded the Condition of Education 2006 study.

Courts
High Court Declines Yahoo Nazi Case
     The Supreme Court declined to hear a case concerning whether Internet giant Yahoo could use U.S. courts to resolve disputes originating in other countries. In 2000, a French judge ordered Yahoo to eliminate French citizens' access to material on the Yahoo auction site offering Nazi paraphernalia. The French judge suggested a fine of about $15 million. Yahoo contested that order in U.S. courts, but lost. The Sunnyvale, Calif., firm said its free speech rights were being violated. The 9th U.S. Circuit Court of Appeals dismissed the company's lawsuit earlier this year. However, it did not resolve whether U.S.-based Internet companies are liable for damages in foreign courts for displaying content that is unlawful overseas -- but protected in the United States. Two French nonprofit groups, however, asked the Supreme Court to consider whether Yahoo could have the case heard in U.S. courts, given that the original order came from a French court. The case is The League Against Racism and Anti-Semitism v. Yahoo.