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Security
Bush To Get Court's Permission For Domestic Spying
by Andrew Noyes
The Bush administration said Wednesday that it would change how its domestic terrorist monitoring program operates by agreeing to get permission from a secret court charged with handling requests for surveillance warrants on U.S. soil.
The National Security Agency's warrantless electronic eavesdropping program, which received considerable congressional scrutiny last year, must be renewed about every 45 days, but the administration has opted not to continue it as currently structured when it expires in about a month.
The president is "committed to using all lawful tools to protect our nation from the terrorist threat," including making maximum use of the authorities granted under FISA, Attorney General Alberto Gonzales said in a letter Wednesday to congressional leaders.
Any electronic spying that has occurred under the covert program, which was exposed in December 2005 by The New York Times, now will require the blessing of the court created by 1978 Foreign Intelligence Surveillance Act, Gonzales said. FISA orders must be reauthorized every 90 days.
A Foreign Intelligence Surveillance Court judge last week authorized the government "to target for collection of international communications" into or out of the country where investigators believe that a party is connected to al Qaeda or an affiliated terrorist group, the Justice Department said.
The administration secretly launched the anti-terrorism program in 2001 after the Sept. 11 terrorist attacks. The program monitors international phone calls and e-mails. Civil libertarians and privacy advocates repeatedly have challenged the initiative on Capitol Hill and in court.
Gonzales' letter was sent to Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., and ranking Republican Arlen Specter of Pennsylvania. Senate Intelligence Committee Chairman John (Jay) Rockefeller, D-W.Va.; House Intelligence Committee Chairman Silvestre Reyes, D-Texas; and House Judiciary Committee Chairman John Conyers, D-Mich., also received the document.
Rockefeller and Reyes' committees already have been briefed on the decision, and agency officials said they hope to bring Leahy and Specter up to speed before Thursday's Senate Judiciary Committee oversight hearing, where Gonzales is slated to testify.
Reyes called the action "welcome news, if long overdue." It proves that the eavesdropping has always been possible under FISA "and that there was never a good reason to evade the law," he said in a statement. Despite the announcement, he said he still wants to review the court orders and conduct in-depth oversight on the program.
Components of the process approved by the judge are "innovative" and "complex" and took "considerable time and work" by government lawyers, officials said. The Bush administration started exploring options for seeking some sort of court approval before the NSA's spying program was revealed.
Senior agency officials who spoke with reporters on an afternoon conference call said the government "wouldn't ordinarily make public" such an order, but "this is an issue that has been the subject of much public debate and debate on the Hill."
One official said he would not "get into the particulars of the orders" but noted that it was not "some cookie-cutter" decision. He also said he would not talk about the communications with the court or the process by which the government deals with the court.
Caroline Fredrickson, who heads the American Civil Liberties Union's Washington office, said the big question remains: "Why was FISA unworkable and inappropriate for what this president wanted to do just yesterday and today all of a sudden it can work?"
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Security
Agency To Cut Number Of Names On 'No-Fly' List
by Chris Strohm
The chief of the Transportation Security Administration told senators Wednesday that his agency will cut in half the number of names on the government's "no-fly" list but cautioned lawmakers against requiring the inspection of all cargo being put on aircraft.
"To assure the accuracy of the no-fly list itself, we will shortly conclude a case-by-case review of every name on the no-fly list," TSA Administrator Edmund (Kip) Hawley told the Senate Commerce Committee during a hearing. "Working with our partners at the Terrorist Screening Center and in the intelligence community and law enforcement, this effort will effectively cut the no-fly list in half."
A TSA spokesman said the number of people who will be left on the list is classified. The spokesman added that it would be wrong to assume that half the names on the list were wrongly placed there. "TSA has worked with the Terrorist Screening Center to ensure that all the individuals on the list currently pose a threat to aviation," he said.
The no-fly list has drawn public and congressional criticism over the years for containing generic and repetitive names and causing inconvenience for innocent people.
Senate Commerce Committee ranking Republican Ted Stevens of Alaska said his wife, Catherine, continues to be pulled aside for secondary screening at airports because her name is similar to the folk musician Cat Stevens, who is on the no-fly list. The singer changed his name to Yusuf Islam after becoming a Muslim in the late 1970s.
Hawley said TSA will adjust the list within "the next couple of months" to contain the "bare minimum" of names that pose a threat to aviation. Hawley also said TSA plans to begin a new passenger pre-screening system called Secure Flight sometime in 2008. He said the program has been revamped to satisfy privacy concerns.
But Hawley said TSA does not want Congress to force the agency to scan and inspect all freight cargo being put on passenger planes. The House passed a bill last week to require all air cargo to be inspected within three years.
Hawley said any such requirement would provide "a very small incremental benefit of security" and take away resources that could be used for other layers of defense. "Anything that switches off the brain is a bad thing," he said.
House Democrats said the cost of doing inspections could be borne by the airlines. Hawley said TSA agrees that screening as much air cargo as possible is important, and the agency will work with Congress to achieve that objective.
He added that the total amount of inspected cargo recently tripled but said the exact number is classified. He also said TSA is conducting a test program to examine how best to screen cargo that is bundled on pallets.
Sen. Stevens said he would like to find a way to increase cargo screening without passing the cost onto the airlines. "I think every time we add a burden to the system, we further compress the ability of the American airlines to survive," he said.
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Executive Branch
Martin's Goals At FCC Include Broadband And Video
by Heather Greenfield
FCC Chairman Kevin Martin said Wednesday that his goals for 2007 are to increase wireless, high-speed Internet access and also competition in video services.
In a news conference, he also said broadband deployment will remain a priority. Martin further said the commission will impose safeguards for communications consumers when needed, such as privacy protections, access to 911 emergency service, and limits on the fees that wireless carriers may charge for early termination of cellular contracts.
"I think the commission has a strong track record [of] taking steps to promote consumer interests," Martin said.
The FCC plans to look at the possibility of a broadband public-safety network. "During an emergency, that will be critical," Martin said.
Martin said the commission's goal continues to be a balance as it tries to remove regulatory barriers to spur communications competition. He said competition can address some existing problems but added that "the commission won't be afraid to step in when the market isn't addressing its needs."
Asked whether the FCC is stuck in a time warp for cable policies, Martin said he thinks there are times when the FCC agrees with the cable industry's positions. He mentioned network neutrality, which refers to plans by broadband providers to charge some Web sites more for faster service, creating a tiered Internet.
Martin said the cable industry has opposed network neutrality protections and the FCC supported that view by not imposing those protections for cable customers, while AT&T recently promised to maintain network neutrality voluntarily as part of its merger deal with BellSouth.
"There are obviously a variety of issues and we will take each issue on its merits," Martin said.
The commission plans four meetings on media ownership. Martin said he would like to start those remaining meetings in February. He said diversity of ownership is important. "We also want to make sure the rules are reflective of the changing landscape," Martin said.
As for the universal service fund, which subsidizes the cost of communications systems in rural and underserved areas, Martin said the commission needs to address both the contribution side of the fund and receipt side.
He said it would be helpful, but not necessary, to address inter-carrier compensation at the same time. The phrase refers to the money that service providers pay to use each other's lines in instances like completing long-distance telephone calls.
Martin said the commission will consider any mergers coming before them. Reporters mentioned another merger attempt by DirecTV and EchoStar Communications or a merger between Sirius and XM satellite radio. Martin noted that an XM deal would not be possible because when satellite radio was licensed in 1997, there was a prohibition on one entity owning both those licenses.
The Senate Commerce Committee plans to have all five FCC members testify at an oversight hearing next month. The House also plans FCC oversight hearings.
Martin said the best thing he can do to prepare for what is expected to be grilling at the hands of Democrats is to "focus on our work here."
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Health
Confidentiality Of E-Health Records Is Examined
by Aliya Sternstein
The nation's health insurers and a government-sponsored standards committee are reviewing the confidentiality aspects of new draft requirements for electronic health records that are designed to detect potential billing fraud and errors.
On Jan. 12, researchers tapped by the Health and Human Services Department released anti-fraud proposals with basic requirements, such as standardized audit logs, plus more forward-looking recommendations, including the ability to support biometrics for e-authentication by 2010.
The fraud-prevention task force, composed of experts from health information technology and related fields, also recommended a number of standards that would require the use of personal identification to protect patient privacy and insurance money.
To combat identity theft, the experts suggested that the software have the ability to capture and validate physical proof of identity -- such as a photo or biometric -- for patients who want to view their records. The rationale, they stated, is that "patients commit fraud by masquerading as another individual in order to obtain medical services."
The team recommended that the system print unique document-identification tracking numbers on each hard copy of electronic health records to deter unauthorized printing of patient records.
Upon issuing the proposals, the panel's organizer, RTI International, requested comments from the public. "Some of the proposed requirements will be difficult to implement, costly and perhaps even controversial or unpopular," according to RTI's project management.
The standards allude to coding the health records in such a way that the data could be analyzed -- or mined -- to detect patterns that suggest fraud. "Use of advanced analytics and pattern detection is one of the strongest tools to prevent fraudulent behavior," the written explanation states.
Susan Pisano, a spokeswoman for America's Health Insurance Plans, said several of the association's member companies were represented on the committee, including Kaiser Permanente and United HealthCare Group/Ingenix. She said her group is still deciding whether to comment on the draft rules.
"It seems to me that there is an overriding principle: Everyone pretty much agrees that electronic health records are an important tool" to increase efficiencies, reduce healthcare costs and improve patient safety, Pisano said. She added that her group believes "we can both take advantage of all the benefits of electronic health records and protect privacy."
John Halamka, chairman of a government-contracted health IT panel that is selecting compatible data standards that can exchange patient information to work across jurisdictions for the nation's health information network, said he is digesting the report for suggestions.
As for mining claims data to find errant behavior, he said, "Patient de-identified data can be used for much of this work" to protect people's privacy.
"Privacy is foundational to healthcare IT," Halamka added. "Best practices which protect privacy include de-identification of data, sharing the minimal amount of data needed for each purpose with the minimum number of people who need to know it, and providing an audit trail of all data access."
The country's privacy policies, best practices and the anti-fraud committee's work "will inform all our standards efforts," he said.
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Business
IT Contractors Prep For New Small-Business Rule
by Heather Greenfield
TYSONS CORNER, Va. -- Government information technology contractors are scrambling to learn more about new re-certification rules set to go in place later this year for small businesses working with the government.
The Information Technology Association of America hosted a breakfast on the topic here Wednesday with attorneys, consultants and a representative from the Small Business Administration, which is imposing the regulation that goes in effect in June.
Under the new rule, all small businesses receiving contracts through preference awards will have 30 days to report any mergers or acquisitions that affect the size of their business. In the fifth year of any long-term contracts with federal agencies, they also will have to report any updates on the size of their business.
"The agency always had the option to ask you to re-certify. Now it's a much more formal process," said Valerie Perlowitz, president and CEO of Reliable Integration Services, which manages large networks for the Defense Department and other agencies.
The rule proposed in 2003 was designed to fix a perceived loophole. SBA estimates that in its first year, the rule will impact 2,300 small businesses that may no longer be so small.
Dean Koppel, the assistant administrator of SBA's office of research and policy, said agencies do not necessarily have to search for new contractors if companies are found to no longer qualify for special treatment as small businesses, but he said that is likely to happen.
Todd Overman, an attorney at Hogan & Hartson, said the impact likely will be less business "flowing to companies that can't define that they're small and a decrease in the acquisition value of a small business." Overman said an interested buyer of a firm likely will think twice because the future revenue stream of that small company will be more uncertain.
He said the re-certification rule also applies to joint ventures that some small companies have with larger companies, but so far it does not apply to subcontractors.
"It could potentially have an impact on stock valuations," Perlowitz said of the reporting rule.
Dennis Roberts, chairman of The McLean Group, a private investment bank specializing in mergers and acquisitions, added: "It is serious. It is certainly not deadly. It will make merger and acquisition transactions certainly more difficult and done with greater pondering."
Olga Grkavac, who handles small-business issues for ITAA, said part of the reason the rule "was so controversial was because it was a surprise." She told Koppel that ITAA commented on it and asked repeatedly for updates, and then it was suddenly enacted.
"Because of this, businesses that had bought other companies recently realized they overpaid and those small businesses thinking of selling were caught short," Grkavac explained during a question to Koppel.
Koppel said the process took a long time behind the scenes to go through both the White House Office of Management and Budget and comments from other agencies on both the proposed and final rules.
Overman said he hopes Congress does not try to impose an annual review of all small-business contracts because of the reporting burden for both companies and the agencies processing all of the information.
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Telecom
Verizon's Divestiture In New England Sparks Complaint
by David Hatch
Communications Workers of America President Larry Cohen on Wednesday harshly criticized Verizon Communications for spinning off its wireline operations in Maine, New Hampshire and Vermont and selling them to Charlotte, N.C.-based FairPoint Communications.
"They're really relegating those states to the basement in terms of the Internet," he told reporters during a teleconference. CWA is worried that FairPoint, which mostly serves rural areas, does not have the capital for large-scale investment in high-speed bandwidth. Verizon announced the deal with FairPoint on Tuesday.
Cohen complained that there is no public policy to prevent Verizon and other large players from essentially abandoning high-cost telecom lines in rural areas that are expensive to upgrade. As a result, Verizon is sending the message that it's "only about markets," he said, adding that the carrier is exploiting the opportunity to "dump the lines, dump the customers" and rid itself of rural obligations.
CWA's members include employees at Verizon, which Cohen acknowledged is "probably not going to be delighted by our position." He made his remarks as Democratic lawmakers prepare to boost FCC oversight with hearings next month in both chambers. Congress also plans to take a fresh stab at overhauling the nation's telecommunications laws later this year.
Despite CWA's assertions, Verizon said in a Tuesday release that "FairPoint plans to significantly increase broadband availability in the region within the first 12 months after the merger is completed." In a separate statement, FairPoint said its broadband offerings in the three states would exceed Verizon's.
"The ability to integrate and serve these northern New England operations will establish FairPoint as one of the pre-eminent telecommunications operators in the region," FairPoint Chairman and CEO Gene Johnson said in a statement. He added, "We are confident that our experience as a national operator will enable us to provide high levels of service and innovative new products."
The North Carolina firm noted that it is developing a strategic plan with Verizon to ensure a smooth transition and continue "support services." Under the deal, FairPoint shareholders will own 40 percent of the combined company, and Verizon shareholders will control the remaining 60 percent.
Also during the briefing, Cohen complained that the United States is still using what he dubbed a "20th-century Internet" compared to several other countries, including Japan, South Korea and Taiwan, which are deploying faster Internet service. Cohen urged lawmakers to adopt policies that would promote higher-speed broadband.
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Intellectual Property
Trooper Says He Owns Ticketing Program He Wrote
by Michael Martinez
A Wisconsin state trooper who less than two years ago was praised for "going above and beyond his normal duties" in helping develop software to streamline a traffic-ticketing system has filed a lawsuit claiming ownership over the source code of the program.
David Meredith, a seven-year veteran of the patrol, has sued state Transportation Secretary Frank Busalacchi and State Patrol Superintendent David Collins because he planned to market the source code to other police officials. The program allows officers to import driver information and criminal histories into the department's traffic and criminal software system, or TraCS, without having to do manual data entry.
The state said that given that Meredith, a former computer programmer, wrote the source code on state time while using state-owned computers, his work should be considered state property. The state also paid to have Meredith trained on the TraCS system, which was developed by the Iowa Transportation Department and given to Wisconsin.
According to Wisconsin Transportation Department General Counsel Mike Kernats, Iowa officials gave it to Wisconsin under the condition that it would not be developed commercially.
Glen Jones, the president of the Wisconsin Law Enforcement Association, said in a telephone interview that Meredith volunteered his skills as a computer programmer so the Iowa TraCS system could be adapted for use in his state. In a press release issued in May 2005, the department boasted that Meredith was able to accomplish more in one year working on the system than software companies were able to do in five.
Meredith was ordered to provide the source code for the program last fall after he requested permission to modify it and offer it to other agencies. The source code is now being held by a county court until its rightful owner is determined.
Kernats said that the TraCS program was made available to Wisconsin by Iowa free of charge and that all of Meredith's work is based on Iowa's work. He said it is irrelevant that Meredith worked on his own time.
"The dispute here isn't about the job he did," Kernats said. "Because the job he did was excellent. But we gave him the equipment. We gave him a dedicated computer. We sent him to training. We gave him access to confidential proprietary information. We think that we, the taxpayers of the state, own that program."
Calls to Meredith and his attorney were not returned before deadline Wednesday. He said in an e-mail to The Milwaukee Journal Sentinel earlier this week that "it is probably in my best interest not to give an interview since 'they' can make my life even more miserable than it already is."
Jones said he is particularly irked that the state is claiming ownership over the source code because it sent Meredith to be trained on the TraCS system before he wrote it.
"That's like your employer sending you to a continuing education class and then saying it has ownership of your bachelor's degree," he said. "Dave left behind his computer career, but he didn't leave behind what he learned."
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Television
India Bans Channel For 'Indecent' Programming
by Winter Casey
The Indian government announced that it has banned the transmission or re-transmission of a satellite channel for allegedly "indecent" programming.
Programs from the station are "against good taste or decency and are likely to adversely affect public morality," according to a statement Wednesday from India's Ministry of Information and Broadcasting.
AXN, the self-described action-and-adventure network under fire, is owned by Sony Pictures Entertainment. The ban was set to take effect immediately and last until March 15. The government specifically said the channel's "World's Sexiest Advertisements" were inappropriate.
A Google search revealed an AXN Web page titled "The World's Sexiest Commercials," a "compilation of the best and the raunchiest television ads from the international arena." It also said it included "how sheep, a cross-dresser and a flasher can sell various products in a hilarious mix of sex and humor."
The decision to ban the channel is based on a 1995 law known as the Cable Television Networks Regulation Act, which outlaws the transmission or re-transmission of programs the government deems against public decency.
In 2000, BBC reported that India banned tobacco and alcohol advertisements and adult shows from the country's cable networks. The decision was made to ensure that all programs conformed with "norms of decency, morality and national security."
Philip Oldenburg, an adjunct research scholar at Columbia University's Southern Asian Institute, said in some ways, India's culture, especially at the local level, always has been very open toward the body and sex. The government, however, has regulated indecency in a "spotty" manner.
Nudity seems to be acceptable for traditional art and religious purposes because it is not intended for arousal, but India does seem to object to content intended to arouse, Oldenburg said. In recent years, however, he said the government has changed its idea of morality and seems to be more open about showing skin.
Neither Sony nor AXN representatives responded to e-mail and telephone inquiries by press time.
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Today's Feature:
International Roundup
One of the world's most popular Web sites for illegally downloading films has proposed buying its own nation to avoid copyright laws.
Every Wednesday, read the International Roundup by Winter Casey
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E-briefs
Privacy: The American Civil Liberties Union on Wednesday threw its support behind a campaign by AT&T shareholders to force the company to disclose details about its role in the National Security Agency domestic surveillance program and to tighten its policies to better protect customer privacy. The investor watchdog group As You Sow is pushing for a resolution to be considered at AT&T's April stockholder meeting that would require executives to issue a report on the issues in question. "In an era when one of the nation's oldest corporate names has begun to collude with the government in an illegal domestic spying program, patriots must seek out every possible avenue for defending the Constitution and our privacy," said Barry Steinhardt, who directs the ACLU's Technology and Liberty Project. AT&T has appealed to the Securities and Exchange Commission for permission to exclude the resolution from its filing.
Porn: Child-safety advocate Ernie Allen briefed royalty and first ladies from eight nations on the issue of missing, abducted and sexually exploited children on Wednesday, giving special attention to Internet's role in the growing problem. Allen, who heads the National Center for Missing and Exploited Children, said child pornography has become a multibillion-dollar industry in a short time. Allen urged countries to create mechanisms for better reporting child porn to law enforcement and to continue disrupting porn distribution channels. A recent study of the 186 Interpol member-countries revealed that 95 had no child porn laws, and 136 did not make it a crime to possess the material. France's first lady, Bernadette Chirac, hosted the meeting in Paris and issued a declaration calling on European Union members to "unite in the protection of children worldwide." "In a civilized society, if our children are not safe, then nothing else matters," Allen said.
Lobbying: The Business Software Alliance has released a policy wish list with steps it hopes Congress and the Bush administration can take to promote competitiveness, innovation and a robust technology sector. Topping the list is patent reform, and it is followed by copyright enforcement. BSA wants Congress to increase investigative resources and training for the FBI and add resources to prosecute copyright violations. BSA also would like data-security legislation that is technology neutral and sets a national legal standard on consumer notifications after data breaches. BSA hopes to see movement this year on items outlined in the House leadership's innovation agenda and the administration's American competitiveness initiative, including increased federal investment in basic research programs, a permanent research and development tax credit, and an "H1-B visa program that is more responsive to market needs." BSA also favors network neutrality rules to keep the Internet a non-discriminatory avenue of opportunity for both individuals and businesses.
Budget: The Army is planning significant cuts and other changes in its $160 billion Future Combat Systems program to save $3.3 billion through 2013. The cuts, outlined in a recent memorandum from the service's top acquisition official, are an indication that the Army is beginning to sacrifice some of its planned funding for high-tech weapons systems to pay for both increased Iraq war costs and plans to expand the service by thousands of soldiers. The undated memo, signed by Army Acquisition Executive Claude Bolton, said bluntly that cuts and other adjustments to the program are "strictly budget driven" and are not due to the contractors' performance or other issues. The program, the most expansive and expensive technological endeavor in Army history, forms the core of the service's technology transformation. Changes listed in a three-page addendum to Bolton's memo include cancellation of two of the four planned classes of unmanned aerial vehicles.
Trade: The Bush administration will negotiate changes in the labor chapters of free-trade deals with Columbia, Panama and Peru to try to satisfy Democratic concerns, a top U.S. trade official said Wednesday. "We are open to a dialogue with Congress regarding the labor chapter in those agreements," Deputy Trade Representative John Veroneau said. "It is clear that some adjustments to that chapter will be made before Congress takes those up." Veroneau also suggested that new World Trade Organization trade cases against China are on tap. "I expect we'll see more WTO complaints," he said, but he declined to elaborate. The United States has several difficulties on the trade front with China, including growing frustration with China's failure to rein in intellectual property violations.
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President -- John Fox Sullivan, 202-739-8468
Editor in Chief -- Louis Peck, 202-739-8481
Editor -- K. Daniel Glover (bio)
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Senior Writers -- David Hatch (bio), Heather Greenfield (bio), Andrew Noyes (bio) and Aliya Sternstein (bio)
Special Correspondent -- Chris Strohm (bio)
Staff Writer -- Michael Martinez
Senior Business Affairs Manager -- Chris Hamby
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