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States Claim Victory in Toysmart Ruling
Lawyers representing Massachusetts, Texas and New York said in U.S. Bankruptcy Court Wednesday that the Federal Trade Commission's decision earlier this month to let online toy retailer Toysmart.com sell some of its consumer information would establish a dangerous precedent for future privacy issues. But they hailed the decision by Judge Carol Kenner to let the company remove the list from the auction arena as a victory for consumers.
"We were actually very pleased — it was actually a great day for the states," said Pamela Kogat, a lawyer with the Massachusetts Attorney General's Office.
Kogat said that with all the publicity surrounding the objections to Toysmart selling its customer list, the debtor felt like the bids had been falling in value. After hearing the states' objections, Kenner agreed to let Toysmart withdraw the list — temporarily — until action is taken on the FTC's proposed settlement to allow the sale under certain restrictions. Kogat said the judge implied that if she had to rule that day, she would not be inclined to approve the FTC settlement and likely would sustain the states' arguments.
Kogat said regardless of what comes out of the FTC settlement, Toysmart must come back to bankruptcy court for approval of its next action. She said the court has yet to set a hearing date for when the FTC settlement case will be heard and possibly could be in a few weeks.
Toysmart has been looking to sell its holdings after it closed down in May and filed for protection under Chapter 11 of U.S. bankruptcy law. It solicited bids for about 250,000 customer names and personal information to get out of debt, but came under fire by state lawmakers and privacy groups such as TRUSTe — which gave the e-retailer its privacy seal of approval. Those protesting the information sale say Toysmart is doing exactly what it said it wouldn't — selling personal information to a third party. The company Wednesday withdrew its auction list from the bidding arena, saying it hasn't received a good enough offer. The highest bidder so far has been Walt-Disney, majority owner of Toysmart. Disney had said it would destroy the list if purchased.
Privacy advocates say the Toysmart case is a test as to whether dot-com companies will be held responsible for promises made to keep customer data private regardless of a company's bankruptcy status.
States Try To Keep Ahead Of High-Tech Curve
Pennsylvania Gov. Tom Ridge, R, is using the Republican National Convention in Philadelphia to his state's advantage to boost Pennsylvania's image as a high-tech mecca.
The state administration launched a huge advertising campaign Monday to urge new businesses and professionals to "Come Invent The Future" in Pennsylvania. Ads will air on six major TV networks during convention time, and they have appeared in print publications like USA Today and The Wall Street Journal.
"It just made sense, with the attention the convention is going to get," said Ridge spokesman Steve Aaron. "It was certainly done intentionally to coincide with the convention. This was an administrative initiative to promote Pennsylvania as a dynamic place to do business."
A main component of the campaign, www.inventpa.com, also was launched Monday. The new Web site will serve as a clearinghouse for all information related to economic development initiatives directed by the state's Department of Community and Economic Development.
"Never before has Pennsylvania pursued such a bold, comprehensive effort to lure more of the 'best and the brightest' economic starts to the Commonwealth," Ridge said in a statement. "And never has such an event as the Republican National Convention provided us with such an opportunity to showcase Pennsylvania to a worldwide audience."
Some of these initiatives include the Sony-partnered Pittsburgh Digital Greenhouse, Lightning Manufacturing, the PA PowerPort, PA Open For Business, CyberStart, Link-to-Learn, "Tax-Free PC" weeks, Keystone Opportunity Zones and CareerLink.
Aaron said Ridge has taken numerous steps to make Pennsylvania more "business friendly."
"'Come Invent Pennsylvania' is the next step in our effort to invent jobs," Aaron said. "We're always working, not only to keep the jobs we have here, but to create new ones."
Delaware Launches E-initiative
Pennsylvania isn't alone in trying to recruit more high-tech businesses and professionals. Delaware also has been putting out the call, not for just dot-com workers, but for any tech-related workers that would help the state administration advance three main technology sectors: advanced materials, information technology and life sciences.
"It's a very proactive marketing strategy to recruit" IT employees, said Michelle Reardon, spokeswoman for the state's Public Economic Development office. "They've been very successful. In the past year alone, it's been amazing."
Last week, Gov. Tom Carper, D, announced plans for two new buildings in the state's first public-private research complex, Delaware Technology Park. By the end of the year, the four buildings in total will host about 30 tech start-ups, the Delaware Biotechnology Institute and more than 300 high-tech jobs. The business park is currently home to more than 30 high-tech businesses, including NETeXc Information Services, Quantum Leap Innovations and Quest Pharmaceuticals. German-based research hub Fraunhofer also will move into the center, most likely in the fall, to establish the United States' first Fraunhofer biotech center.
Carper spokesman Jim Smith said the state's move to give IT a greater presence in Delaware hopefully will attract more highly trained workers. The Delaware Information Technology Association was formed last year to promote and look for IT companies and consists of representatives from companies such as J.P. Morgan and Andersen Consulting.
"It's been a really good public, private type of initative, basically to advance the IT industry in the state," Smith said. "Delaware's just trying to stay ahead of the curve.
In February, the Delaware IT Association launched ithinkdelaware.com to address the IT worker shortage. The site allows users to network by getting connected to state IT companies' human resources departments, job surf, receive updated state industry information, and find out about entertainment around the state, as well.
In related news, Carper also signed SB 412 Monday, which created a technology fund through a combination of state and local school district contributions to fund high-tech initiatives in the state's schools. Delaware was also the first state to wire every classroom in its 181 schools with Internet access, a project completed in 1998, and can boast a 5.3-to-1 ratio of students per computer &151; better than the national average, according to state data.
Texas Rolls In The Big Guns
Texas' Advisory Council on the Digital Economy hosted an array of tech industry and federal agency representatives Tuesday to discuss issues like online privacy, the digital divide, telemedicine and online democracy.
Texas Lt. Gov. Rick Perry, R, opened the meeting, which featured Federal Trade Commissioner Orson Swindle, Telecommunications and Information Policy Institute Director Sharon Strover, Dell Computer Vice Chairman Kevin Rollins, Senior Vice President of E-Solutions John McCain, Senior Vice President of America's Promise — The Alliance Gregg Petersmeyer, and Vice President and Assistant Director of Digital DNA, Motorola Padmasree Warrier.
Council clerk Shawnna Matthews said no specific conclusions were reached, but that the group would make its recommendations to the state legislature in early October.
In other Texas news, NIC Technologies — the world's largest e-government solutions provider — last week implemented the state's first e-government campaign finance and elections filing solution for the Texas Ethics Commission.
Help For Small Businesses
The National Institute of Standards and Technology has published A Guide To State Business Assistant Programs for New Technology Creation and Commercialization as a roadmap to help small technology-oriented companies find the resources they need to serve their customers. The publication is the first of two volumes being produced on reinforcing interactions between different levels of technology programs. It discusses how different types of business support programs are targeted at different phases of the tech development cycle.
DLC's 'Blueprint' for the New Economy
The Democratic Leadership Council's summer edition of Blueprint, The New Economy — How Working Americans Can Take Control, features Rob Atkinson, director of the New Economy and Technology Project at the Progressive Policy Institute, proposing ways states can better develop their economies in the country's overall new economy. Atkinson writes "compared to the federal government, states are better positioned to foster regional clusters of innovation, to promote industry-university partnerships, to reform education, and to engage in industry in skill-development efforts." Atkinson suggests the new economy should rest on five pillars: co-invest in the skills of the workforce; co-invest in an infrastructure for innovation; create customer-oriented government; and foster the transformation to a digital economy.
- by Liza Porteus
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